National Association of Realtors

This article is about a real estate trade association. For general information about real-estate brokers in the United States, see Real estate broker.
Logo of the National Association of Realtors.

The National Association of Realtors (NAR), whose member brokers are known as Realtors (member agents are known as Realtor associates), is a North American trade association[1] for those who work in the real estate industry. It has over 1.1 million members,[2] including NAR's institutes, societies, and councils, involved in all aspects of the residential and commercial real estate industries. NAR also functions as a self-regulatory organization for real estate brokerage. The organization is headquartered in Chicago.

Overview

National Association of Realtors building on New Jersey Ave, NW, Washington DC

The National Association of Realtors was founded on May 13, 1908 as the National Association of Real Estate Exchanges in Chicago, Illinois. In 1916, the National Association of Real Estate Exchanges changed its name to The National Association of Real Estate Boards. The current name was adopted in 1974.

NAR's members are residential and commercial real estate brokers, real estate salespeople, immovable property managers, appraisers, counselors, and others engaged in all aspects of the real estate (immovable property) industry, where a state license to practice is required. Members belong to one or more of some 1,600 local Realtor boards or associations. They are pledged to a code of ethics and standards of practice, which were adopted in 1913.[3]

The National Association of Realtors is also a member of The Real Estate Roundtable, a lobbying group in Washington, D.C.[4]

Trademark

The use of the term "realtor" was first proposed by Charles N. Chadbourn, in an article in the National Real Estate Journal in March 1916.[5] Chadbourn, then a real estate agent in Minneapolis and vice-president of the National Association of Real Estate Boards,[6] wrote "I propose that the National Association adopt a professional title to be conferred upon its members which they shall use to distinguish them from outsiders. That this title be copyrighted and defended by the National Association against misuse... I therefore, propose that the National Association adopt and confer upon its members, dealers in realty, the title of realtor (accented on the first syllable)."[5] The association adopted the term the following year, at its national convention in New Orleans in April 1916.[6]

In 1949, the National Association of Real Estate Boards obtained U.S. registration no. 515,200[7] for "REALTORS" as a collective trademark for real estate brokerage services. In 1950, it obtained a second registration, registration no. 519,789,[8] for "REALTOR", in the same field.

NAR has since obtained registrations for "REALTOR" in such fields as electronic lock-boxes,[9] clothing,[10] and jewelry.[11]

The 515,200 and 519,789 registrations have been subject to a number of cancellation proceedings.

In June 1998, Arleen Freeman, a real estate agent who had formerly been an NAR member, petitioned the U.S. Patent and Trademark Office (USPTO) to cancel both registrations.[12] In June 2002, the USPTO's Trademark Trial and Appeal Board (TTAB) held that, because Freeman was a former member of NAR and a licensee of the trademarks, she was estopped from bringing a proceeding to cancel them under the doctrine of licensee estoppel.[12]

In November 2001, Jacob Zimmerman, a student who was not a member of NAR, petitioned the USPTO to cancel the registrations, on the ground that "REALTOR" and "REALTORS" were generic terms rather than a trademark.[13] On March 31, 2004, the TTAB denied the petition, finding on the evidence before it that the term was not generic.[13]

In March 2015, Jeffrey Schermerhorn petitioned to cancel the 519,789 registration.[14] Schermerhorn alleged fraud under Torres v. Cantine Torresella S.r.l.[15] as well as genericness, arguing that "Social Media such as Facebook, Twitter, Linkedin, Instagram and Google Plus" provides additional evidence of generic use that was not available at the time of the Zimmerman proceeding.[14] On March 30, 2016, the TTAB granted the NAR's motion to dismiss the petition on the ground that Schermerhorn, who had been a NAR member and licensee at the time he submitted his petition to cancel, was estopped from challenging the mark.[14]

NAR and Multiple Listing Service (MLS) systems

The NAR governs the hundreds of local Multiple Listing Services (MLSs) which are the information exchanges used across the nation by real estate brokers. (However, there are many MLSs that are independent of NAR, although membership is typically limited to licensed brokers and their agents; MLSPIN[16] is an example of one of the larger independent MLSs in North America.)

Through a complicated arrangement, NAR sets the policies for most of the Multiple Listings Services, and in the late 1990s, with the growth of the Internet, NAR evolved regulations allowing Internet Data Exchanges (IDX) whereby brokers would allow a portion of their data to be seen on the Internet via brokers' or agents' websites and Virtual Office Websites (VOW) which required potential buyers to register to obtain information.

These policies allowed participants—whether they were individual one-person brokers or large regional companies—to limit access to some or all of the MLS data by individual brokers (whether they were brokers operating solely on the Internet or local competitors). In 2005, this prompted the Department of Justice to file an antitrust lawsuit against NAR alleging its MLS rules in regard to these types of limitations on the display of data were the product of a conspiracy to restrain trade by excluding brokers who used the Internet to operate differently from traditional brick-and-mortar brokers. (For a description of the DOJ action, see Antitrust Case filings for US v. National Association of Realtors.[17]) Meanwhile, various real estate trends such as expanded consumer access and the Internet are consolidating existing local MLS organizations into larger and more statewide or regional MLS systems, such as in California and Virginia/Maryland/Washington DC's Metropolitan Regional Information Systems.

In response to the case, NAR had proposed setting up a single Internet Listing Display system which would not allow participants to exclude individual brokers (whether of a bricks-and-mortar type or solely internet-based) but require a blanket opting out of display on all other brokers' sites. This system became the IDX system. Although IDX allows the public to view MLS listings, it still requires the listing brokerage information to be placed on the listing every place it appears (brokers legally "own" the listings of their brokerage), to prevent misrepresentation of the listing information, and to place accountability for the information on the broker as the law dictates.

The antitrust lawsuit was settled in May 2008.[18] The agreement mandates that all Multiple Listing Service systems allow access to Internet-based competitors.[18][19] The NAR will be required to treat online brokers the same as traditional brokers and cannot exclude them from membership because they do not have a traditional business model.[20] The NAR admitted no wrongdoing, and it paid neither fines nor damages as part of the deal.[20] The settlement will not be official until a federal judge formally approves it, most likely in 2008.[20] While the general counsel of the NAR believes that the settlement will have no effect on the commission paid by the general public, a business professor at Western Michigan University predicted that the increased competition would cause a 25 to 50 percent decrease in commissions.[20]

Another major anticompetitive practice is supported (indirectly) by various state laws which prohibit the "sharing" of commissions with unlicensed individuals. In broad interpretations, this is deemed to prevent a buyers' agent from providing a credit to his or her buyers from commissions received. Currently, there are 10 states where real estate agents and brokers are barred from offering homebuyers or sellers cash rebates or gifts of any kind with a cash value more than $25. Various Realtors in such states have successfully contested this interpretation in states which now allow the practice (notably, Patrick Lea, a Realtor in Ohio, and numerous agents in Kentucky). The Kentucky case was ultimately tried with the United States Department of Justice as the plaintiff and the Kentucky Real Estate Commission as the defendant.[21]

Lobbying

The NAR wields substantial power as a lobbying organization. Since 1999, the NAR has spent more than $99,384,108,[22] and spent $22,355,463 in 2011 alone.[23] It has consistently ranked among the largest Political Action Committees in the United States. On the total spending, the largest share—46% -- has gone to Republicans, and 30.8% has gone to Democrats. Key political issues for the group revolve around federal de-regulation of the financial services industry.

Enabling the subprime mortgage crisis

U.S. Median Price of Homes Sold

Many experts[24] believe that Brokers and Realtors bear the largest measure of responsibility for the subprime mortgage crisis, purposefully inflating the perceived market values of homes, and subsequently encouraging buyers to take out larger mortgages than needed. Evidence[25] shows that this intentional collusion with mortgage lenders, along with a monopoly on the MLS enabled Realtors to earn high volumes of commission on borrowed money for inflated house values with no risk to the Realtors. Many victims feel that home buyers were hoodwinked into taking out larger loans to pay the Realtors' commissions. Interestingly, this practice is not considered "unethical" by the NAR which claims to be a Self-regulatory organization; however, obvious implications show extensive and substantial harm rendered to the public. Many victims are encouraging the Securities and Exchange Commission to begin aggressively regulating[26] agents and refunding overpayments to homebuyers.

Antitrust lawsuits

In 2005, the United States Department of Justice filed a formal complaint against the National Association of Realtors for violating Section 4 of the Sherman Antitrust Act.[27][28] The complaint sought to enjoin the National Association of Realtors "from maintaining or enforcing a policy that restrains competition from brokers who use the Internet to more efficiently and cost effectively serve home sellers and buyers, and from adopting other related anticompetitive rules.[27]

The DOJ challenged NAR's MLS rules that inhibited competition from Internet-based brokers.[27][29] On November 18, 2008 the Court entered a Final Judgment approving a settlement against NAR.[29] Under the Final Judgment, the NAR agreed to the policies challenged by the United States and replaced those policies with rules that do not discriminate against brokers who use the Internet to provide low-priced brokerage services to consumers.[27][29][30]

In 2012, American Home Realty Network, Inc. the operator of NeighborCity filed antitrust counterclaims in response to a pair of copyright lawsuits, alleging that the "copyright lawsuits filed against it by two multiple listing services with financial backing from the National Association of Realtors are part of a concerted effort by NAR to drive the company out of business and eliminate it as a provider of services to real estate brokers."[31] The counter-claims also allege that the copyrights asserted were never properly registered.[31][32] In the Minnesota case, which recites claims against the NAR but does not directly name the NAR as a counter-defendant, AHRN filed a second amended counter-claim adding Edina Realty and Home Services of America as Counter-Defendants in the anti-trust and unfair competition claims.[33] Edina Realty is a subsidiary of HomeServices of America, Inc., a Berkshire Hathaway company, which owns real estate brokerage firms in states across the country, including Minnesota, Maryland, North Carolina, Georgia, Washington, Oregon, Arizona, Rhode Island, Connecticut, Iowa, Nebraska, Ohio, Illinois, Kansas, South Carolina, Missouri, Pennsylvania, Indiana, Kentucky, Alabama, and California.[31][33][34][35][36] Earlier in 2012, the mid-Atlantic multiple listing service Metropolitan Regional Information Systems, Inc. (MRIS) and St. Paul, MN-based Regional Multiple Listing Service of Minnesota Inc. (NorthstarMLS) filed copyright claims against NeighborCity.[31][32] The National Association of Realtors said it would provide financial support for NorthstarMLS and MRIS legal expenses.[35][37]

Employee misclassification as Independent Contractor Class Action Lawsuit

Bararsani v. Coldwell Banker Residential Brokerage Company and its parent NRT. On November 15, 2012, plaintiff Ali Bararsani filed a putative class action complaint in Los Angeles Superior Court, California, against Coldwell Banker Residential Brokerage Company (“CBRBC”) alleging that CBRBC had misclassified current and former affiliated sales associates as independent contractors when they were actually employees. The complaint, as amended, further alleges that, because of the misclassification, CBRBC has violated several sections of the California Labor Code including Section 2802 for failing to reimburse plaintiff and the purported class for business related expenses and Section 226 for failing to keep proper records. The amended complaint also asserts a Section 17200 Unfair Business Practices claim for misclassifying the sales associates.

In the event the Court of Appeal denies the Petition, the case will proceed and discovery on class and other claims will commence. The case raises significant classification claims that potentially apply to the real estate industry in general. [38]

Specializations

NAR educational requirements and recognized designations

Realtors, as members of NAR, also have the option of studying for additional certifications in a variety of specialties, several of which are backed by NAR with offerings of certification and update courses available nationwide.[39]

The most well known NAR sponsored designations are the following:

Radio

The NAR backs a weekly 2-hour radio program entitled Real Estate Today hosted by Gil Gross. The show includes a 3-minute segment reporting on market conditions at the bottom of each hour, optional for stations to air.[41] The program is produced by Media Syndication Services and distributed by Premiere Radio Networks, and is heard on dozens of affiliates nationwide, and the Talk Radio channel on XM Radio.

Consumer outreach

The NAR launched HouseLogic.com[42] in February 2010 in an attempt to reach consumers directly for the first time.[43] Beyond establishing that bond with consumers, the goal of the site is to provide education—with much commercial interests—to consumers about investing in their homes.

Other national real estate associations

See also

References

  1. ↑ National Trade and Professional Associations (2008), 43rd ed., ISBN 978-1-880873-56-4
  2. ↑ NAR Historic Membership Report
  3. ↑ NAR's 2007 code of ethics and standards of practice
  4. ↑ "Lobbying Spending Database: National Assn of Realtors : 2007". Retrieved 2008-10-25.
  5. 1 2 "Realtor". Oxford English Dictionary (3rd ed.). Oxford University Press. September 2005. (Subscription or UK public library membership required.) Accessed April 3, 2015.
  6. 1 2 "Charles N. Chadbourn, Originator of the word "Realtor"". National Real Estate Journal. 17 (1): 7. January 1918. Retrieved April 3, 2015.
  7. ↑ REALTORS, ser. no. 71/540,015 (filed July 17, 1947), reg. no. 515,200 (September 13, 1949). United States Patent and Trademark Office. Accessed April 3, 2015.
  8. ↑ REALTOR, ser. no. 71/540,013 (filed July 17, 1947), reg. no. 519,789 (January 10, 1950). United States Patent and Trademark Office. Accessed April 3, 2015.
  9. ↑ REALTOR, ser. no. 78/426,864 (filed May 28, 2004), reg. no. 2,983,269 (August 9, 2005). United States Patent and Trademark Office. Accessed April 3, 2015.
  10. ↑ REALTOR, ser. no. 86/074,481 (filed September 25, 2013), reg. no. 4,583,156 (August 12, 2014). United States Patent and Trademark Office. Accessed April 3, 2015.
  11. ↑ REALTOR, ser. no. 86/074,386 (filed September 25, 2013), reg. no. 4,583,155 (August 12, 2014). United States Patent and Trademark Office. Accessed April 3, 2015.
  12. 1 2 Arleen Freeman v. Nat'l Ass'n of Realtors, cancellation nos. 27,885, 27,885, U.S. Patent and Trademark Office, Trademark Trial and Appeal Board 64 U.S.P.Q.2d 1700 (June 18, 2002)
  13. 1 2 Jacob Zimmerman v. Nat'l Ass'n of Realtors, cancellation nos. 92032360, 92040141, U.S. Patent and Trademark Office, Trademark Trial and Appeal Board, 70 U.S.P.Q.2d 1425 (March 31, 2004)
  14. 1 2 3 Jeffrey Schermerhorn v. Nat'l Ass'n of Realtors, cancellation no. 92061031, U.S. Patent and Trademark Office, Trademark Trial and Appeal Board (filed March 9, 2015; decided March 30, 2016)
  15. ↑ Torres v. Cantine Torresella S.r.l., 808 F.2d 46 (Fed. Cir. 1986)
  16. ↑ MLSpin website
  17. ↑ United States v. National Association of Realtors. United States District Court for the Northern District of Illinois, Eastern Division. 2008-05-27. Retrieved 2008-05-27.
  18. 1 2 Bartz, Diane. Realtors to open listings to settle lawsuit. Reuters. 2008-05-27. Retrieved 2008-05-27.
  19. ↑ Jordan, Lara Jakes. Settlement opens listings to online real estate agents. Associated Press. The Mercury News, Silicon Valley. 2008-05-27. Retrieved 2008-05-27.
  20. 1 2 3 4 Lichtblau, Eric. Realtors Agree to Stop Blocking Web Listings. The New York Times. 2008-05-28. Retrieved 2008-05-27.
  21. ↑ "COMPETITIVE IMPACT STATEMENT: U.S. v. KENTUCKY REAL ESTATE COMMISSION". United States District Court for the Western District of Kentucky. 26 July 2005.
  22. ↑ "Noteworthy Contributor Summary". National Institute on Money in State Politics. Retrieved 5 February 2014.
  23. ↑ "National Assn of Realtors". The Center for Responsive Politics. Retrieved 5 February 2014.
  24. ↑ "The Subprime Blame Game: Where Were the Realtors?". Knowledge@Wharton. Wharton University of Pennsylvania. October 17, 2007. Retrieved December 3, 2012.
  25. ↑ "Short Sale Collusion". February 13, 2011.
  26. ↑ "Is it time to regulate real estate agents?". January 12, 2009.
  27. 1 2 3 4 "UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION". US Justice Department. Retrieved 19 April 2013.
  28. ↑ "JUSTICE DEPARTMENT SUES NATIONAL ASSOCIATION OF REALTORS FOR LIMITING COMPETITION AMONG REAL ESTATE BROKERS". US Department of Justice. Retrieved 19 April 2013.
  29. 1 2 3 "United States v. Consolidated Multiple Listing Service, Inc.". US Department of Justice. Retrieved 19 April 2013.
  30. ↑ "UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION". US Department of Justice. Retrieved 19 April 2013.
  31. 1 2 3 4 BRAMBILA, ANDREA. "NAR, MRIS hit with antitrust suit". Inman. Retrieved 19 April 2013.
  32. 1 2 "Fight Over Real Estate Listings Escalates As NeighborCity Counters Copyright Claims With Antitrust Accusations". Techdirt. Retrieved 19 April 2013.
  33. 1 2 "IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND GREENBELT DIVISION" (PDF). Inman. Retrieved 19 April 2013.
  34. ↑ Fuller, Matt. "Neighborcity.com alleges NAR, MRIS, NorthstarMLS violate anti-trust laws: op/ed". AG Beat. Retrieved 19 April 2013.
  35. 1 2 "MLS says no thanks to NAR funds for MRIS v. NeighborCity". Aim Group. Retrieved 19 April 2013.
  36. ↑ "HomeServices of America, Inc. Announces Acquisition of Prudential Georgia Realty". BHHS Georgia. Home Services. March 19, 2013. Retrieved 19 April 2013.
  37. ↑ BRAMBILA, ANDREA. "NAR helping MLSs cover costs of NeighborCity copyright suits". Inman. Retrieved 19 April 2013.
  38. ↑ . The Securities and Exchange Commission
  39. ↑ NAR Accredited Designations & Courses. National Association of Realtors.
  40. 1 2 Membership Stats & Surveys http://www.crs.com/About_CRS/55
  41. ↑ RETRadio.com
  42. ↑ http://www.houselogic.com/
  43. ↑ Scene, Local (2010-02-26). "Realtors looking for special bond with consumers". Chicago Tribune.

External links

Look up Realtor in Wiktionary, the free dictionary.
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