Inman

Why the term ‘Realtor’ matters in the real estate profession

By February 17, 2017 No Comments

Marc Davison wrote a piece earlier this week exploring the hypothetical rebranding of the term “Realtor” applied to National Association of Realtors (NAR) members to make the term more relevant to the public.

As a Realtor, broker, owner and English major, I will respectfully suggest that a rebrand is a solution seeking a problem.

The true A/B test

I live in an area — perhaps the only one in the U.S. — where there is a true A/B test of whether there is value to being a Realtor or not, as New York City and the outer boroughs have a rival trade organization (REBNY, the Real Estate Board of New York) in addition to a substantial population of licensees who belong to no trade organization.

Given my experience in this area, I would make the following factual observations:

REBNY, a proud and reputable organization, has nothing that operates like a true MLS, with the RLS being hamstrung by no single platform and one large firm opposing efforts to create one.

An NAR member until 1994, REBNY has a significant membership of landlords, property managers and others who do not practice brokerage duties. That is all fine, and their right, but it’s also a dilution of member mission to a degree.

I would defer to REBNY members to dive deeper into the finer points; the fact is that there is no cohesive Manhattan MLS, and significant numbers of REBNY members do not list or sell real estate as brokers.

Also: I have never in 20 years heard a member of REBNY call himself or herself a “Realtor,” with “broker” being the common nomenclature by both practitioners and the public.

Awkward translation of practice and protocol

Crossing local borders, when a REBNY member works in a Realtor market (such as the neighboring Hudson Valley or Long Island), or when a suburban Hudson Gateway Association of Realtors (HGAR) or Long Island Board of Realtors (LIBOR) member ventures into Manhattan, there is an awkward translation of practice and protocol — even though we are geographic neighbors and operate with identical state licenses.

Davison’s statement that the Realtor brand rests on the sole pillar of ethics misses a few other foundational elements — in addition to the aforementioned MLS, Realtors benefit from educational systems and political lobbying that has, on a national level, kept banks out of the real estate brokerage and preserved the mortgage interest deduction.

Locally, great results have been accomplished with the opposition of onerous laws like municipal transfer taxes in New York. I would defer to my colleagues around the country to offer their own state or municipal examples.

The Wild West on the East Coast

But here is where the rubber meets the road: There are a significant number of licensees in and around New York City who belong to no trade organization at all, especially in the outer boroughs.

This yields a very dicey “Wild West” situation all too often when it comes to cooperation with other real estate professionals and ethical treatment of consumers.

Ask any HGAR or LIBOR member about their level of suspicion of non-members based on real experience, and you’ll start hearing stories.

Licensees who are not members of a trade organization often operate off the grid — for reasons I wouldn’t be proud of, by-and-large — and are viewed with a suspicion that is exceedingly well-earned. I could tell you stories.

Oh.
The.
Stories.
I.
Could.
Tell.

Of course, in fairness, I could tell of bad experiences with NAR members also — but those are the rare exceptions, and in HGAR we run a tight ship in terms of accountability and possessing a venue to police ourselves.

Test results

This is where the true A/B test occurs. In this context, it is clear to me that Realtors do too good a job operating with a set of standards that have made the industry one where mere technology could not disintermediate us, nor any rival model disrupt with any critical mass, no matter how many hundreds of millions have been spent to do so.

NAR, in this sense, is like a duck on a pond. To the naked eye or an outsider like Davison, the organization is just there. But under the surface, the work and systems in place are paddling like hell.

Education. Political advocacy. Ethics, certainly. A functional MLS system wherever Realtors operate.

I could go on, but that is the tip of the iceberg.

At the end of the day, the branding problem isn’t rooted in bad policy; it is a function of the rarity of the transaction.

Quick: Name the best gemologist in town. No? Also, did you know that not all jewelers are gemologists?

Off the top of your head: Who is the best orthopedic surgeon in your market? Anyone? Are all physicians orthopedists? Of course not.

The mispronunciation of the term “Realtor,” a problem we have smirked at for years, is more like the words “nuclear” and “specific.” It is a linguistics issue, not a branding issue.

The fact of the matter is some things occur too rarely for important distinctions to be household lexicon, like Tiffany’s or Apple.

Realtor branding isn’t an ad agency’s job; it is one done daily by our colleagues around the country with each transaction we close.

Want to know the value of a Realtor? Then go to the Bronx or Queens and work with non-members for six months.

You’ll go back to your local associations and kiss your colleagues on the mouth.

J. Philip Faranda is broker and owner of J Philip Real Estate in Westchester County, New York. He is a member of Inman’s Real Estate Influencers of 2017, Zillow’s Agent Advisory Board and the 2014 HGMLS president. Follow him on Twitter @JPhilipFaranda

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