IT WAS THE BEGINNING OF WHAT WOULD BECOME ONE OF THE WORLD'S MOST IMPORTANT ASSOCIATIONS

                                            By Bill Cherry, Dallas Broker-Realtor

                                                  My 43rd Year Selling Texas

While there have been real estate dealers and brokers since the beginning of time, in the United States, at least, it wasn't until after the Brooklyn Bridge was built in 1884 that the legitimate ones in the business realized that licensing laws and a self-governing association were sorely needed.

You see, charlatans had found that they could legally "sell" New York's Brooklyn Bridge through an instrument known as a Quit Claim Deed. Paraphrased, a Quit Claim Deed says the Grantor (the seller) deeds any interest he may have in the property to the Grantee (the buyer). In the instrument, the Grantor doesn't claim to have any ownership in the property. He just says that should it turn out he does, he's selling it to the buyer.

And to make matters worse, common law has always ruled that no matter what someone tells you or to what you may verbally agree to with respect to real estate, if it's not in written contract form, it doesn't exist.

So no matter what the seller promised - "You're going to own the entire bridge and all of the revenue that comes from it'll make you rich" - what the seller actually sold the buyer was nothing.

Millions were being taken as a result of these scams, i.e,, verbally promising one thing, delivering a deed that was silent on most or all of the verbal sales pitch representations.

So in 1891, a group in New York informally met to form a national real estate association. It collapsed nineteen months later because of the lack of interest. Two subsequent attempts failed as well.

Finally, on May 12, 1908, one hundred, twenty real estate dealers from thirteen states met in Chicago to "unite the real estate of America for the purpose of effectively exerting a combined influence upon matters affecting real estate interests."

The new association hired a general counsel, executive secretary, and appointed some standing committees. The overall objectives were to write a code of ethics, encourage states to pass real estate licensing acts, help local areas organize local exchanges, to study how real estate was being taxed, and finally, to investigate whether or not a multiple listing service could work.

California was the first state to adopt a licensing act, and that act became the prototype for other states. The Texas State Realty Association was founded on April 22, 1911, and it set out to get Texas to adopt a licensing act.

In 1913, the national association adopted the first code of ethics, and it was based on the Golden Rule. This was only the second time that a national business group had developed a code for its members.

In 1916, the national association began calling itself the National Association of Real Estate Boards. It was almost thirty-five years before Charles Chadbourne, a Minneapolis broker, made up the word "Realtor," and suggested that the name be changed to National Association of Realtors. That and the R logo became trademarks that could only be used by members. The primary purpose was to help the public distinguish those who were members of the NAR and subscribed to the Code of Ethics over those who only had a state real estate license.

The Texas association was founded in Dallas in 1920. William P. Hobby was the governor then, and Woodrow Wilson the president. Like the national, and the other state associations that had been established by then, the new Texas association set as its goals the establishing and policing of ethics, and the education of its members and the public and to get the state to pass real estate licensing and transaction legislation. Dallasite Lawrence Miller was the fist president.

It wasn't until 1939 that Texas passed a real estate licensing act. No examination was required. An applicant needed only to send in a modest fee (some recall it was $5.00), state that he was over twenty-one years old, and accompany that with three letters of recommendation from friends who would attest that the applicant was of good character.

It took another ten years for the state to establish the Texas Real Estate Commission. Beuford Jester was Texas' governor then. There were thirty-four states that were still not overseeing the real estate brokerage in their states.

That year the Texas association elected as its president, broker Charles "Big Charles" Ladd of San Antonio. Born in Wyoming, he had run a cattle ranch in Colorado. In his acceptance speech, Big Charles said that he had personally moved and sold houses to 100,000 families, spending over $3 million on railroad tickets to get them to Texas.

Even dating back to the first attempt to establish a formal association of people engaged in the real estate business (1891), the idea of a multiple listing service was listed as a priority, however, no concept was more difficult to sell.

A multiple listing service's (MLS) purpose is to have a formal agreement whereby brokers can market the listings of each other. At its root is the concept of having competitors work as one. Heretofore, a broker could only show and sell his own listings. That required a potential client to have to work with more than one broker in order to see what was available for purchase.

The first MLS was tried in 1923, but it failed for lack of participation. It wasn't until 1952 that the idea caught hold and became a standard.

From its beginnings the Realtors members have worked consistently and diligently to make certain that clients receive the total benefits of their Code of Ethics, and that property listed for sale with a Realtor is always accompanied by the listing agent's expertise in the marketplace and the fairness of all.

                                     Copyright 2007 - William S. Cherry, Ph.D.

                                                     All Rights Reserved