These are complex, bold and very confusing times for the North American real estate industry. On one side we can see the invasive forces and increased influence of engaged consumerism, applied technologies, generational demographics, informational expectations, forced economics and global interdependence that are creating an environment offering a historic level of opportunity for those within the real estate industry who are willing to move forward, but only if they are willing to greet the day with high levels of adaptation, transition and reexamination.
On the other hand we are watching the dauntless efforts of a vested industry majority as they attempt to fight off the forces and influences described above, in favor of continuing the status quo until they can gracefully withdraw into their well-deserved retirements and/or the next chapter of their businesses, careers and lives.
The chemical dynamic of these forces is creating an amazing level of heat within the industry crucible. In turn, this heat is in the process of creating a new industry chemistry. Consider the following examples of the current industry dynamic:
1. Last month the Quebec Federation of Real Estate Boards (Canada’s equivalent of the state REALTOR® association) gave notice to the Canadian Real Estate Association (CREA) (Canada’s equivalent to NAR) that they were withdrawing from CREA effective at the beginning of 2013. There is reason to believe that several other local associations are preparing to follow suit.
CREA and the Toronto REALTOR® association are currently engaged in a serious lawsuit filed by the Canadian Competition Bureau. A move the federal agency hopes will warn other boards against using tactics that limit competition and consumer choice. The bureau said it has been investigating a complaint since 2007 against the Toronto board for restricting how agents provide information to their customers through the association owned Multiple Listing Service — which is used in about 90 per cent of Canadian real estate deals.
“They’re using that monopoly control to deny innovation, deny choice for consumers by imposing these restrictive rules so that’s why it is — in our view — anti-competitive and contrary to the Competition Act,” said Melanie Aitken, the competition commissioner. Canada takes antitrust violations very seriously. The suit has the potential of bankrupting both organizations.
This month CREA is attempting to solicit a massive show of membership support for its Collaborative Strategy: Map for the Future strategic plan. The plan is the latest product of an initiative that started in 2010 when CREA essentially declared that the traditional REALTOR® Association in Canada had become irrelevant and dysfunctional. The upcoming conflict over the national association’s prescription for the rehabilitation of the REALTOR® movement in Canada threatens to further destabilize the REALTOR® movement.
2. In July three members of the Greater Las Vegas Association of Realtors sued the trade association, its board of directors and its immediate past chief executive, Irene Vogel, alleging misappropriation of funds.
Plaintiffs Kevin Child, Honey Borla and Jacqueline Porter are active members of the association and claim that membership dues, which total about $1,700 per member annually, have been misused.
The lawsuit, filed in Clark County District Court, requests that the court order the association to open its audit and employment contracts for inspection by its nearly 11,000 members. Attorney Matthew Callister, representing the three Realtors, said the GLVAR has denied the plaintiffs’ requests to see financial records and audits.
3. In September an internal dispute between the Chicago Association of Realtors and some of its members spilled into Cook County Circuit Court, with the trade group accusing one of its members of defamation.
The association and Virginia Downs, its chief executive, in mid September filed a lawsuit against Andrea Geller, a Chicago real estate agent and member of the group’s finance committee. The suit follows a number of destabilizing events that have occurred over the past year, including the premature departure of the organization’s president.
4. In May the National Association of REALTORS® announced the creation of the Pinnacle Group Project. This initiative, designed to provide state and local REALTOR® associations with an opportunity to rise to the challenges of the current industry environment, arose out of an industry wide concern about the very concept and viability of the traditional REALTOR® trade association and a growing sense that it has become irrelevant to the current industry and marketplace.
Some within the industry are trying to suggest that “These things just happen.” The fact is that they don’t. Others are suggesting that these actions are just a coincidence and that they reflect circumstances that have been around for years. They aren’t.
Each of these events and circumstances are clearly early points of conflagration arising from the chemical dynamic that is overtaking the current industry crucible. They are a natural part of what happens when humans come together to oppose the forces of organic change. Moreover, these events will continue to increase in number and severity until the industry undertakes a more reasoned and sensible approach to the inevitable change and adaptation that must occur if the REALTOR® movement and brokerage is to have any future whatsoever.
While the current circumstances are complex, their origins are quite simple. It is all about leadership, more specifically about leadership awareness. By way of example, the Pinnacle Project is attempting to offer a solution consisting of two elements. The first is a flow of knowledge, strategies and tactics that REALTOR associations can use to customize and re-engineer themselves to meet the new industry challenges. Three of the country’s top REALTOR® organizational design experts are responsible for creating these components. The program is sponsored by no less an entity than the industry’s national association.
The Project’s second element provides a forum through which the issues and challenges of the current industry can be discussed and resolved by some of the brightest and most innovative minds in the industry, consisting of the officers and association executives of the participating associations.
Over 1000 REALTOR® associations were invited to participate in the Pinnacle Project. About 50 accepted the opportunity. The response of the vast majority of those who declined to participate was “we are ok.” Does this mean that they have a plan? Actually they don’t. Does this mean that they have access to some secret solution that they intend to implement during 2013? No it doesn’t. Does this mean that they are actually currently practicing the techniques, strategies, and tactics necessary to become relevant to their members and a part of their market’s future success? Definitely not.
Could this possibly mean that they have chosen to deny the current events of our industry? Do they believe that the events set forth at the beginning of this article don’t really exist? Does it mean that they are rejecting the idea that associations could or should be part of the industry solution? Could it be that while uttering, “What’s best for our members”, they have elected to walk into the greatest challenge our industry has ever faced with no plan, no solution and no responsibility? Only they can answer these questions.
It is obvious that the North American real estate industry and marketplace is experiencing its own “Arab Spring.” The force is rapidly expanding across the industry. Within the next eighteen months it will engulf everyone, every brokerage, every market and every association. Legacies are being created today. What will history have to say about your leadership efforts?