Propmodo Daily

By Franco Faraudo · Jan. 24, 2024

Greetings!

The National Association of Realtors has been one of the most powerful industry associations in America for over a century. The thought of them being replaced by an upstart trade organization was almost unfathomable. But after the rough few months the organization has had, another organization has emerged, leaving some wondering if it could be a viable competitor to NAR. Today we examine how much of a threat the new American Real Estate Association really is to NAR’s tight hold on the industry.

Propmodo Technology this week is focussed on HVAC and building management technology. The corporate push for net zero carbon has led to a proliferation of renewable power generation, both at the grid and the building level. The intermittent nature of power sources like wind and solar makes it much harder for the building management systems tasked with making buildings run carbon-free.

Now let's dig in!

Is NAR In Danger of Being Replaced?

The National Association of Realtors has been through a lot of turmoil lately. It has been hit with sexual misconduct scandals, lost a multi-billion dollar lawsuit, and had its new president blackmailed into resigning. The 115-year-old trade organization has never been in the news so much, and the press about it has never been so bad.

Sensing that the group might be on the ropes, a competitor has stepped into the spotlight. The organization is called American Real Estate Association or AREA, and its founders, Jason Haber and Mauricio Umansky, have used their notoriety well to get them considered, at least by the New York Times, as a possible alternative to NAR. You may have seen Umansky before, he is a reality TV star that has been on shows like Buying Beverly Hills and The Real Housewives of Beverly Hills. Haber may be less known to the general public, but has been influential in his own way with his organization NAR Accountability Project.

While the prospect of a NAR alternative is interesting, there is little evidence to suggest that AREA could be it. There is almost nothing known about AREA, only that they would be partnering with the listing site theNLS.com as its alternative to NAR’s member multiple listing services. The website has limited listings at the moment and is only available to members willing to pay $40 per month or $199 per year.

A real estate trade organization can serve a lot of functions, but the only reason most brokers pay to be a member is for access to its listing marketplace. Marketplaces, especially real estate marketplaces, are generally a winner-take-all vertical. No one wants to search multiple sites to make sure they have seen all of their options. So for the NLS to win, it couldn’t rely on just the listings that its members upload. It might be able to make agreements with certain area MLS’s and marketplaces like Zillow, Redfin, and Homes.com, but that also seems unlikely, given NAR’s influence over those companies.

What seems more likely is that one or more of the aforementioned marketplaces would find a way to aggregate MLS listings across the country. They have all established themselves as the piping for the way that the general public gets listing data, so it probably wouldn’t take long for one of them to do the same with a real estate broker portal.

Despite everything that NAR has going against it, replacing the organization will not be easy. It earns over $300 million in revenue and is one of the largest lobby groups in the country. Plus, a lot of the real estate community still sees value in the way that NAR protects their interests. On that note, I will leave you with one of the reader comments from the NYT article:

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Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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