2004 Annual Report: Benefits of Membership--Leadership Initiatives

NATIONAL ASSOCIATION OF REALTORS®
2004 Annual Report: Benefits of Membership

Leadership Initiatives

NAR operates one of the most powerful lobbies on Capitol Hill, but NAR’s leadership is manifest in other arenas as well. In 2004, NAR continued a number of initiatives that further strengthened its position as a national leader within the housing industry, the real estate community at large, and beyond.

Source of Key Economic News for Americans
NAR reported a record year in 2004 for existing single-family home sales, with 6,675,000 units, which was up 9.4 percent from 6,100,000 in 2003. NAR’s existing-home sales number is one of the nation’s key economic indicators, closely tracked by major media organizations throughout the country. But it’s just one of the many ways NAR’s Research Division works on members’ behalf. The group also tracks members’ business confidence; analyzes critical public policy issues; and conducts surveys, including its regular profiles of NAR members, brokerage owners, and recent buyers and sellers. NAR members can gain economic insights through such products as Real Estate Outlook: Market Trends & Insights and regional and local market reports for commercial practitioners.

Communicating the Value of REALTORS®
NAR completed the seventh successful year of its Public Awareness Campaign in 2004. The television and radio advertising campaign helps millions of potential homebuyers and sellers understand the value of using a REALTOR®. With the themes “NAR has 1 million members working for you” and “Ask if your salesperson is a REALTOR®, a member of the NATIONAL ASSOCIATION OF REALTORS®,” the ads build credibility in the REALTOR® name and drive home to consumers the value REALTORS® bring to both residential and commercial transactions.

The campaign relies on rigorous consumer and member research to evaluate performance. The latest survey in 2004 showed continued improvement in important benchmarks. Unaided awareness of the campaign increased to 24 percent in 2004 from 17 percent in 2001. Overall awareness is up 4 percentage points to 71 percent in 2004 since 2001. Members, too, see the value in the program: Ninety-seven percent favor advertising promoting the benefits of using a REALTOR®.

More than 5,000 radio and television commercials aired in 2004. Spots aired on network news and during late-night programming, as well as on cable television and network and Hispanic radio, reaching an estimated 97 percent of the target audience of 25- to 54-year-olds.

Helping REALTORSStay Safe on the Job, at Home, and on the Road
Real estate practitioners face more on-the-job risks than many other business professionals. To focus attention on safety, NAR launched the REALTOR® Safety Week Web site (part of REALTOR.org) in 2003 and officially designated Sept. 11-17, 2004, as the third-annual REALTOR® Safety Week. NAR sends a comprehensive safety kit to association executives before Safety Week to assist them in planning safety-related events for their members.

NAR Brings History to Life Through Multiple Exhibition Sponsorships
As the sole sponsor of the Smithsonian's “Within These Walls …” exhibition, NAR is helping to tell the stories of five families who lived in a historic Ipswich, Mass., home over 200 years. This two-story home, which is one of the most popular exhibitions at Smithsonian’s National Museum of American History, was transported to and reconstructed within the Smithsonian's National Museum of American History. The exhibition is now in the fourth year of its 15-year run. NAR continues its sponsorship through ads in various airline publications, kiosks, and dioramas in Washington, D.C., metro stations, and tail-light displays on area buses.

To celebrate the formal dedication of the National World War II Memorial, NAR co-sponsored a new temporary exhibition titled "So Proudly We Hail,” on display at Smithsonian's National Museum of American History during summer 2004. The exhibition featured four prominent American flags from World War II and paid tribute to those who fought under the stars and stripes. This exhibition, one of several special temporary exhibitions related to WWII, was well-received by museum visitors.

NAR also co-sponsored another temporary exhibition titled “Sept. 11: Bearing Witness to History,” which ran from Sept. 11, 2002, through July 6, 2003, at the Smithsonian's National Museum of American History. This exhibition, which paid tribute to those who perished in New York and Pennsylvania on 9/11, attracted more than 1 million visitors. This historic exhibition is now touring the country through Jan. 1, 2006.

REALTORS® Relief Foundation
The REALTORS® Relief Foundation’s mission is to give money to help organizations provide housing-related relief to victims of a national or state disaster. In 2004 RRF contributed $50,000 to the Florida Association of REALTORS® Disaster Relief Fund to aid victims of Hurricane Charlie; $25,000 to the Alabama REALTOR® Disaster Relief Fund for Hurricane Ivan; and $10,000 to the Illini Valley Association of REALTORS® Tornado Relief Fund for tornadoes that struck Granville and Utica, Ill., in April 2004. NAR contributed an additional $50,000 from its general fund to FAR’s disaster relief fund.

In total, the REALTORS® Relief Foundation received about $50,000 in contributions in 2004.

2004 REALTORS® Conference & Expo: Orlando
More than 25,500 REALTORS® and guests—the largest overall attendance in 25 years—attended the 2004 REALTORS® Conference & Expo in Orlando, Fla. There were 555 exhibiting companies, an all-time record. During the meetings, NAR’s Board of Directors voted to:

Approve updates to the association's voluntary guide to professional courtesies, called Pathways to Professionalism. The guide includes such suggestions as scheduling appointments in advance, calling when you're delayed for an appointment, and promising only what you can deliver. It also recommends that REALTORS® identify their status as REALTORS® in all contacts with other members and the public.
Authorize hearing panels to accept testimony via videoconference or teleconference when the hearing chair determines that such testimony is essential to ensuring a fair hearing. It also approved modifications to expedited hearing procedures. The Standards of Practice changes ensure that respondents in uncontested expedited hearings can offer information to mitigate potential discipline.
Refer a proposed Standard of Practice back to the Professional Standards Committee. The standard would have required REALTORS® to disclose to buyers the possibility that the existence, terms, and conditions of any offer they make could be disclosed to other purchasers by sellers or by sellers' representatives, except where such disclosure is prohibited by law.

Other Board Actions

Membership

Reduced from 50 years to 40 years the membership requirement for eligibility for REALTOR® Emeritus status. There's no minimum-age requirement. Emeritus members are waived from paying national dues. There were slightly less than 700 REALTORS® Emeritus members at the end of 2004.
Renewed the waiver of dues and special assessments for NAR members who are military reservists on active duty.

MLS

Extended the mandatory deadline by six months, to July 1, 2005, for MLSs to adopt the virtual office Web site (VOW) policy approved by the NAR Board of Directors in 2003. The extension was made because of a pending investigation by the U.S. Department of Justice.

The virtual office Web site (VOW) policy, passed by NAR’s Board of Directors in May 2003, establishes policies that MLSs must apply to participants who operate a VOW and, thus, use MLS information in an online brokerage environment. NAR work groups spent more than a year formulating the policy, which ensures that listing brokers and their clients are protected from misuse of their data. The policy covers, among other things, how much MLS information can be posted online and the relationship VOWs need to establish with customers before granting access to the information. In addition, the policy gives MLS members the ability to opt out of having their listings displayed by any or all VOWs of other participants of their MLS.

Passage of the VOW rules came slightly more than a year after the effective date of NAR’s Internet Data Exchange (IDX) policy. That policy—known to some as broker reciprocity—requires REALTOR® MLSs to make a downloadable database of listings available to their participants who want to post the listings at a personal or company Web site.

Although the IDX policy was intended to enable what amounts to cooperative advertising of listings online, the VOW policy is targeted at regulating the evolving practice of conducting brokerage online. Both policies demonstrate NAR’s commitment to having policies that both reflect and enhance members’ opportunity to implement new business practices as well as to protect MLSs, members, and consumers.
Eliminated obsolete and redundant provisions in the association's MLS policy. The revised policy will be made available on REALTOR.org in early 2005.

Legal

Approved $309,000 to fund seven cases. The cases involve disclosure, eminent domain, commission advances, online property marketing, portable signs, property conversion, and economic development. One of the cases (Freeman v. Sandicor, 2003) involves a decision by the U.S. Court of Appeals for the Ninth Circuit, which held that Sandicor's pricing policies for support services amounted to unlawful price fixing. The funding in support of Sandicor is for the MLS’s continued defense of that case; it comes on top of money NAR had previously put into the case and after another plaintiff filed suit, seeking to bring the suit as a class action.
Authorized $100,000 in funding to update NAR antitrust and fair housing educational materials. Each local and state association will receive one copy of the materials, and digital versions will be posted on REALTOR.org.
Renewed the professional liability insurance policy with American International Group for the 2005 policy year.

Federal Legislation and Regulation

Opposed efforts at the federal level to pre-empt state insurance laws. The initiative is under discussion by the leadership of the U.S. House of Representatives Financial Services Committee.
Supported efforts to establish federal guidelines for any wireless directory assistance service developed for cellular subscribers' telephone numbers. De minimis standards should include an opt-in provision and give subscribers the right to opt-out at no cost.
Specified that the process for military base realignment and closure should include research, development, testing, and an analysis of the community impact.

Policies to Maintain Central Position

To help REALTORS® maintain the first point of contact in the transaction, the Board and NAR Delegate Body passed a constitutional amendment to exclude those who exclusively engage in mortgage finance from being able to call themselves a REALTOR®. Other categories of membership, such as affiliate member, would still be available to mortgage professionals.
Keeping REALTORS® at the center of the transaction is the principal objective of the Strategic Planning Committee's new plan . The plan articulates three core objectives that are key to maintaining the first point of contact with consumers: expanding the REALTOR® role in the transaction; supporting member efforts to offer a package of services to consumers; and recognizing the value of specialty groups and the need to provide products and services to those groups. Other strategic objectives include taking the lead on data security; being a strong advocate for property rights and other real estate issues in the federal legislative and regulatory arena; and strengthening NAR's role in promoting diversity in homeownership and in NAR membership.

International

Approved bilateral cooperation agreements with associations in Argentina, China, Japan, Latvia, and Uruguay.

The board heard the following reports:

The association continues to be in a financially strong position, thanks in part to record growth in membership, which is projected to reach 1.1 million in 2005, according to NAR Treasurer Mike Brodie. In 2004, the association had $125 million in revenue and $116 million in expenditures.
NAR holds a strong political position as well after chalking up substantial success in the Nov. 2 election. The association won 27 of 31 primary and general election opportunity races and all six of its Independent Expenditure campaigns. The REALTORS® Political Action Committee ranked No. 1 among all PACs in direct contributions to federal candidates—$4.1 million for the 2003-2004 election cycle. NAR spent a total of nearly $13 million leading up to the November elections, $9 million in RPAC funds and other contributions from members (for direct contributions, Opportunity Races, independent expenditures and direct contributions to targeted candidates), and $4 million in dues-funded political advocacy dollars. Record RPAC contributions fueled NAR's success: more than $5.4 million raised with 41 percent of NAR members contributing.
Homestore CEO Mike Long told board members of the need for the industry to increase the number of salespeople and brokers using REALTOR.com services so that the REALTOR® organization can compete with online intermediaries and interlopers trying to come between salespeople and consumers. Millions of consumers begin their search through just a few portals, Long said. “A weak REALTOR.com can’t compete with [those portals] for consumer traffic. The site must maintain its market value proposition. Only REALTOR.com stands between third-party portals and control of millions of consumers,” he said.
2004 President Walt McDonald reaffirmed NAR's commitment to defend the mortgage interest deduction should legislative proposals be raised in Washington, D.C., to make dramatic changes to the tax code. McDonald said the likelihood of lawmakers introducing proposals for a flat tax or national sales tax, which could threaten the MID, is increasing as President Bush makes tax simplification a priority in his second term.
McDonald announced a partnership with an affiliate of the CALIFORNIA ASSOCIATION OF REALTORS® to introduce a REALTOR®-centric transaction-management platform in 2005. NAR has invested $1.2 million in the initiative.

The following award recipients were honored at the meeting:

For Distinguished Service Award, Stephen A. Hoover, CRB, CRS®, GRI, of Roanoke, Va., and Ronald L. Myles, CCIM, GRI, of Denver.
The William Magel Award was given to Joel Singer, executive vice president of the CALIFORNIA ASSOCIATION OF REALTORS®.

Finally, the board heard the 2006 slate of NAR officers: Thomas M. Stevens, Vienna, Va., president; Pat Vredevoogd, Grand Rapids, Mich., president-elect; Richard Gaylord, Long Beach, Calif., first vice president; and Bruce Wolf, Englewood, Colo., treasurer.