Industry Decoded: NAR must be held accountable for its spending 

Thinking big about residential real estate success requires a big-picture perspective. Industry Decoded features industry experts who can enrich your understanding of issues affecting the industry as a whole.

The views expressed in this column are solely those of the author.

As the New York Times has reported, it is clear that NAR has a gargantuan spending problem. I've written about this before, yet my calls for attention to the matter went unheeded. People, it is time to stop drinking the Kool-Aid and have an honest conversation … while there is still time for reform.

Let's discuss the national association first, which because of the illegitimate but mandatory three-way agreement, all Realtors are required to join. What we all should be educating ourselves on is the grotesque profligacy of the association leadership, a burden borne by the individual members — many of whom are reeling under inflationary pressures with an average income of $56,400.

A humorous claim by NAR is that most of the leadership, elected by the 986 member board of directors, are "volunteers." A quick search of NAR's IRS Form 990 for 2022 (year 2023 has yet to surface) reveals that statement to be mostly a falsehood, despite its continued perpetuation. Many names with six-figure salaries are in "volunteer" positions, and in the runup to a presidency — from first vice president to president-elect to president — the "volunteer" could draw a cool $620,874. All paid for by member dues with zero input from the members paying the bill. No wonder people fight so hard for these positions!

A closer look at where our money has been going

Digging deeper, one should also question why we are paying $556,117 a year for "advisors/consultants" to the CEO, who had a base salary of $2,591,724 and total comp of nearly $2.7 million before his early retirement amid escalating legal issues for the association.

There is also a $10 million line item for travel. That's enough to buy a lot of first-class flights and probably a few private jets. How about traveling Southwest once in a while like the rest of us? Man, those conventions (with a total cost in 2022 of $18 million) must be some real shindigs! Keep in mind, these numbers represent only the NAR expenses. They don't include what the state and local associations spend on the same line items.

Speaking of state associations, in my home state of Tennessee, IRS data for 2023 reveals CEO salaries ranging from $136,650 (Williamson County Association of Realtors) to $368,750 (Tennessee Realtors).

Compared to the average annual income of an agent of just $56,400, even these "moderate" salaries are disproportionately high. Keep in mind, these figures don't include extra benefits that may be received or miscellaneous items that may be charged to association credit cards.

Some of the "extra benefits" reported in the New York Times article include private club memberships, $1,500/month auto allowances, $2,250/month utility and insurance payments for the national association CEO's Chicago residence, and even dog-sitting services. For real … dog-sitting services.

If the hard-working agents and brokers who fund this boondoggle had such poor control over their own expenses, they would have been out of business long ago. Yet we continue to fund it, and any act of questioning the emperor is considered near religious heresy.

Some will say that the size of the NAR overhead expenses is acceptable for an organization of "1.5 million members," if you accept those numbers, which I consider doubtful based on other data the organization has released — or, in the case of past membership numbers — hidden from view. NAR NXT is normally attended by 20,000+ agents. NAR proudly claimed that the most recent event in Boston drew 11,000. However, when the vendors received the final attendance list, it numbered only about 6,700. Figuring 700+/- vendor staff, plus 300+/- NAR staff, that appears to leave an actual agent and broker attendance figure of around 5,700.

Realtors, it's time to insist on accountability

Regardless of the numbers, the problem is that we have overhead stacked on top of overhead stacked on top of overhead.

WE the membership MUST insist on value and accountability from the associations to which we collectively pay millions of dollars in dues every year. If this statement means that I am labeled as a "NAR-hater," then it is a mantle I will endure. Yet nothing could be further from the truth. As I have presented, all these associations have serious issues that demand accountability, and that's not going to happen without the membership demanding it. Yet, there has been very little voice on this subject. Why? 

To those who question my credentials, here are a few of them. I am not an outsider, I've been a Realtor for more than 22 years, maintaining membership in seven local associations AND the Tennessee Association of Realtors AND the National Association of Realtors. I was WCAR Realtor of the year in 2013. I've volunteered thousands of hours of service to the Realtor associations, served on just about every committee that exists, and authored and delivered multiple education classes for the association. Never once have I accepted a single penny in payment for such work.

Clearly, I have invested in these organizations sufficiently to give me the right — and responsibility — to bring the truth to light. My sole desire is to see change at a time when most of what the associations do is no longer helpful, driven by self-aggrandizement, and (in some cases) are a cause of greater harm in the consumer's eyes. Failing to force change will result in the associations collapsing under their own weight. What will we have then?

I am for improvement; I am not for abolishment. I am not a NAR-hater. What I am, now and always, is an advocate of the hard-working real estate agent and the confused consumer. Period.

Readers, what's your take? If you have a different perspective and want to share your thoughts, we'd like to hear from you. Email us at news@realestatenews.com.

Phillip Cantrell is the founder and CEO of Tennessee-based Benchmark Realty LLC, which he has grown from one employee in 2006 to more than 1,500 today, with offices throughout Middle Tennessee, Southern Kentucky and Northern Alabama.

His 42 years of business experience include executive roles in operations and sales, and he has published numerous industry articles.