Home : Blogs : Lenn Harley, Broker, Maryland and Virginia : Lenn Harley, Broker, Homefinders.com in Maryland and Virginia

GET YOUR MONEY HERE!!! NAR IS GIVING AWAY MONEY.

NATIONAL ASSOCIATION OF REALTORS® LAUNCHES A "VENTURE CAPITAL" PROGRAM.

Yes, folks, you are reading this correctly. In case you haven't heard, the NAR, supported by an increase of $16 to the annual fee of $80, plus $30 for the National "awareness" campaign, "Second Century Ventures", a new company launched by the National Association of Realtors to consider investments in the development real estate technology applications, will formally begin operations in January."

$16 per member comes to about $20,000,000 a year.

See:
FROM THE NAR: NAR CEO Dale Stinton outlined status of initiatives including the establishment of a new company, Second Century Ventures, to consider potential technology initiatives from third parties; establishment of an Internet-based credit union for deposits and loans for members . . . .

FROM INMAN: Second Century Ventures, a new company launched by the National Association of Realtors to consider investments in the development of real estate technology applications, will formally begin operations in January. . . .

Investing carries a significant element of risk. I can't find any details to describe the plan.

Details such as:

How does the NAR plan to weigh the risk of the different proposals?
Will the money be grants or will the NAR retain an equity position in the companies in which it invests?
What are the instruments or programs through which the NAR plans to make these investments?
Who are the advisors to the NAR who select the companies in which to invest?
What elements of fiduciary are involved, to the membership OR to the companies in which NAR invests"
What are the credentials of the group or board that decides who gets the "investment"?
Is RIN involved?
Are any of the NAR executives involved who were instrumental in licensing Realtor.com to HomeStore/MOVE?

If someone can find any details about this program, please post them.

THE PROGRAM BEGINS IN JANUARY 2008.

UPDATE: I just read the by-laws and can't find anything that authorizes the NAR to invest dues in the manner suggested by this "Venture". There is a building fund, but no obvious authorization for investing in "ventures".

Posted by Lenn Harley, Broker, Maryland and Virginia on 12/15/2007 11:37 AM

Comments (71)

71 Comments on GET YOUR MONEY HERE!!! NAR IS GIVING AWAY MONEY.

DEC

2007

wow - interesting - curious how they will manage that! thanks for the heads up!

Courtney. Thanks for commenting. It is curious and I can't find any details beyond what is on Inman.

Lenn - we are members of NAR, but am I mistaken to think that we are not shareholders and therefore neither derive the benefit nor the risk of their investments in the regular sense. Our risk of course is that if their ventures don't pan out, our fees will go up. I will park for more answers.

Faina. Great comment. No, we're not shareholders. I'm sure we don't have any risk for what the NAR execs do or do not do.

We do, however fund their ventures. My post was written partly in a historical sense recalling the NAR actions vis a vis Realtor.com.

I hadn't heard about this until you blogged it! T H A N K Y O U for keeping all of us as well informed as you!

Lenn, you are definitely a constant stream of information for me! Thanks for posing the questions that I was aware of but never really thought about!

This sounds like a wonderful idea if

The grants were only given to members.
The capital was low - interest similar to SBA loans
The capital was to advance many members who are lacking technology.

The reality is that the Capital will probably be used to fund more competition. To enhance Realtor.com to compete with the various websites.

This new venture will be 100% profitable and not for the individual members of NAR.

Lenn, I am not a member of NAR nor am I familiar with their "Mission Statement", but this seems to go beyond what I would einvision as the purpose for an Association of this type. Seems to me that they are taking on an expanded role, much like Government has done through the years. That $16.00 seems more like a TAX than a fee for services received.

Lenn, Just one more reason to clean house at the NAR. Are these ventures going to compete with us? You bet they are. Is that right? Hell no! Do I want my money going for this? No I don't.

Can we do anything about it?

Bill Roberts

Venture Capital firms are usually prety secretive. It will be interesting to see the results of this move.

Lenn- Once again you have brought food for thought to the table.....it will be interesting :)

Lenn, My local dues have about $100 worth of crap including that I will not be paying.

This is very good info Lenn. You know I LOVE being a REALTOR(R) but I haven't been happy with NAR for many years. So of the stuf they come up with is just ming boggling!! And don't get me started on Realtor.com!! I haven't been to that site in years.

Interesting stuff. Do you think there is any chance of our dues being lowered if they make a profit?

Wayne. "Yeah, sure."

Bryant. I objected to RIN. My solution to technology for real estate is let the free enterprise system rule. Folks what to invest in technology to serve the industry, the folks in the industry will buy it or not.

If agents and brokers want to invest in technology either by designing systems to sell to us or by buying system.

The NAR doesn't have a very good record investing in real estate technology. What they provide is largely slush, sort of like a political contribution from a lobbyist.

I'm just too cynical to trust this. There's too much cronyism involved with much of what comes from NAR.

Kathy. Thanks. Keep reading. Maybe I'll find more nuggets.

William. The description "venture capital" is mine. NAR hasn't given us a description yet, just a title. That's one of the reasons there are so many questions.

Bill. We need a LOT more information. Like proposals, budgeting, staffing, mission, etc. I got more from Inman than from the Realtor.org web site.

George.

Mission
The core purpose of the NATIONAL ASSOCIATION OF REALTORS® is to help its members become more profitable and successful.

Especially after the debacle of realtor.com/homestore/move they should have their head examined for going outside their core business - and we should have our heads examined for letting them.

Rebecca

This sounds like a wonderful idea if

The grants were only given to members.
The capital was low - interest similar to SBA loans
The capital was to advance many members who are lacking technology.

REBECCA. I don't believe that the NAR should be giving any grants to any members. Competition is the foundation of the FREE MARKET SYSTEM.

Capital can be obtained by REALTOR members from normal capital sources, savings, banks, family, etc. if the NAR lends to one, they should lend to all.

The NAR should NOT be in the business of davancing any members. Members who are lacking technology should buy it, from their own capital. The NAR should NOT favor one member over another.

The reality is that the Capital will probably be used to fund more competition. To enhance Realtor.com to compete with the various websites.

Realtor. com also competes with Realtors. We should not be in the business of funding our competition. That's not what capitalism is about. Capitalism is about individuals, through their own capital, money and energy and hard work, succeeding and realizing a profit from the investment of that capital.

This new venture will be 100% profitable and not for the individual members of NAR.

Then, whom is it for??? I don't understand the statement.

Lenn, do you know who is advising NAR about what "technology applications" are worthy of receiving these grants?

Regarding technology, NAR has been so far behind the learning curve, for so long, that it seems unlikely they'd make good choices anyway.

That interesting i hope soeone is just not going to get a bif administrative fee.

Sharon. I don't remember being asked.

Does the NAR have a "core business"? I believe that we, the members each, individually, have core businesses. NAR has a mission to serve us. They operate on our money. They aren't in business.

William. The NAR is pretty secretive too.

Thanks for this post. It sounds like something worth paying attention to.

Eric. NO! ! ! I do not and it isn't disclosed any place that I can find. That's one of my questions.

"Who are the advisors to the NAR who select the companies in which to invest?"

E Jeffrey. If it is administrative, that's one thing. If it goes to pay consultants, that's another. The way I read it, the fee is not optional.

Sondra. Thansk for dropping by. We'll keep looking for more information.

Did Jimmy Hoffa found NAR? Sounds fishy to me.

Shouldn't .org be replaced with .biz at the NAR website?

Perhaps all of this new technology WE are investing in could include the ability to vote on-line when it comes to issues such as this being that we are members and all.

I second what Amanda Hall just posted.

Lenn, thanks for keeping us in the loop. It's time for my second Jessica for president of the NAR speech.

Jeff. I'm with you. I just don't get it. After RIN and Realtor.com, you'd think they'd stay out of this stuff and let entrepreneurship work it's magic.

Amanda. You win the comment of the day award.

Lenn, love the title- I can almost see you with a megaphone and tophat, but not quite. Thanks for the info- more to consider before sending the check!

Jeff. I'm still kerschmulked by it.

Laurie. We always send the check. We have to send the check. How else can they tax us for something like this, whatever it is.

Jessica. It's a job keeping up with what goes on but we need to know.

Sure, I'ld like to have Jessica for prez. Someone from the trenches would be welcomed.

Lenn, Wow! This is some really scary crap! You obviously raise some excellent questions. NAR should not be going anywhere near this. Haven't they screwed up enough? Sorry, but I have a lack of trust for their leadership. Like you've pointed out, look at realtor.com. I also see some possibly major conflicts of interest here. Maybe it's just me!

Marc.

Thanks for commenting.

I just can't figure it. They need to get something out. Read the Inman piece. It has more info that the sentance on R.org.

But, I still can't figure it.

Before long, NAR will come on here and say MEETING ADJOURNED to any post that we put on here. I almost feel like we are controlled by the mafia when it comes to NAR

Lenn...

Great discussion in here.

Consider me parked :)

TLW...ROAR!

Jeff. I don't believe that the NAR has any interest in what we think, write or say.

TLW. Come on in a grab a chair.

Huh? Whole thing doesn't make sense.

Lenn:

I appreciate all the effort you do for us! I also really appreciate the advise that you have freely given to me and helping me get my head out of my bottom! You are the best!

Seriously, I have a whole series on campaign speeches. I've only posted one of them though. I think it is time for 2nd!

PLEASE KEEP UP THE GOOD WORK THAT YOU DO! We depend on your leadership and many others around here. You are a GREAT blogger and truly lead by example in all that you do!

Josette. That's what I said.

Jessica. Gee, thanks Jessica. We all help each other out here. Actually, in this tough business, we need all the help we can get.

Lenn- Still reading......where's the dessert :)

The NAR seems to be on the same program as the US Congress. REALTORS(R), by and large, loath the national leadership, just as "the represented" generally loath those in DC that "represent" us. This is just another example of why WE (that means the members of A/R) need to take back the NAR from the politicos.

I don't have a specific issue with the purpose of the company. I have seen in the SCCA (Sports Car Club of America) that these private ventures can be good for the organization. But, I haven't seen that the NAR has the capacity to do well with this.

If the VC were used to help companies that are of benefit to real estate agents at large, and an ownership position were maintained, and the future profits were used to reduce fee to members, it wouldn't be all bad. I recall hearing something about the Realtor Technology Initiative (or something) at some point, that had funded a company that brought something to market. I don't recall the details, but the cost to members for the products ended up being subsidized, and the product was pretty cool... poo on my bad memory...

Lenn, I read the Mission Statement that you provide, and maybe my mind is just to simple to see it, but I fail to see how this fits in or promotes that purposel.

This looks like a bad thing. And I have to pay it, but have no say in where my money goes. This smells foul all around.

lets see, I have to pay for it even if I don't want it and will not use it?? That stinks, since when does NAR know how to invest money?? I though all they new how to do was PI$$ it away fighting the DOJ.

I for one am not going to be happy if they go forward with this. Don't we get a say at all? Isn't NAR suppose to be *representing* us -- how can they do that if we don't have any say? Why don't they get out of *investing* in technology, and invest some time in organizing a good health care program for it's memebers?

Ah....a bunch of comments to read....I have often wondered where our fees go...what say we have in anything ...especially for investing OUR money? Lenn...you always are on it for finding the info to bring to us for perusal and contemplating. Now what?

Lenn, if it is a voluntary org, ( tongue in cheek ) why should we pay anything ? Them upping the dues in a down market was absurb. Most Realtors I spoke with in Ann Arbor were not happy as are people on AR. A trade org should advocate for their members...not with NAR. They always have their hand out and compete against us w r dot com and not the blog thingy.

Lenn,

Dittos to the above comments! I remember when Realtor.com started up that you had to pay to play, and each agent was providing the content for the site. If you didn't pay, you listings showed up then a sundry of different other vendors obscured the content providers!

We're we able to "buy stock" in that venture, but not allow to sell it for a designated time period... but not the "players" at NAR central!! What a rip, and I'm getting that same feeling now! We're in a down market and they say "Stick up your hands"! Do I sound cynical?

Thanks for the post!

Hmm maybe NAR needs to look at the obligations and meaning of a fiduciary -- whose interests are they looking out for?

I must say that I'd be more comfortable if NAR spent their money intelligently promoting real estate and real estate agents instead of becoming venture capitalists. I don't seem to remember stellar results from their past business ventures.

There are plenty of capitalists inventing new real estate products all the time without any help from NAR.

DEC

2007

Makes me think of something Groucho Marx said:

"I don't want to belong to any club that would have me as a member"

Cheers,

David Swierczynski

A non profit organization as a venture capitalist = oxymoron

Lenn, I suppose NAR is looking for more technology to take the data we give to them for FREE, repackage it and SELL it back to us. i.e. Realtor.com

Mitchell. I'm laughing out loud.

David. Some of us have no choice. No membership, no key pad.

Brian. I agree. Let the market place work. Just what proposals for technology do they plan to finance? Seems to me that entrepreneurs do it themselves or get financing.

Joan. My fear is that the ugly head of croneyism has reared it's ugly head.

Rick. I don't know how a non-profit can fund a "for profit" under their by-laws. I need to go back and read the NAR bylaws.

O.K. I just read the by-laws and can't find anything that authorizes the NAR to invest dues in the manner suggested by this "Venture". There is a building fund, but no obvious authorization for investing in "ventures".

Dan. Dang if I can figure it. I fear that there is some cronism involved. Can't be sure because the NAR isn't giving any details and yet, the program begins January 2008.

I just read the by-laws and I can't even find authorization for this type of "venture".

Hi Lenn - this would ba a great post to have Jim Lee chime in on, and any other NAR Directors who are members of AR. Do we have any others in addition to Jim Lee here?

Ann

Lenn, parking to follow additional comments...

Ann. You are absolutely right. Jim has been a stalwart monitor of Realtor.com. He has the background for it. Jim stops by my blog from time to time.

Hey Lenn,

I think NAR would be smart to hire someone like yourself to figure out the best way to invest! I hope they hire a "practicing" Realtor to consult on this.

We are the membership and need to monitor. Each of you need to find out what is going on and ask them to justify it.

Debbie. Thanks for commenting. I believe that they should leave technology to the market. We have a wonderful population of enterpreneurs to innovate, invest, develop and market technology.

Terry. I have tried my best to find something on Realtor.org and cannot.

I will be curious to see where these pilot areas fall first, and how fast they proceed across to all members.

the Credit Union aspect is interesting, as now it sounds as if NAR will become a lender of sorts? All this time we were afraid of lenders getting into the business of selling real estate, now lenders must worry about us getting into the business of lending.

How does this all work now?

Boys & Girls, we need to calm down and take a deep breath.

Your board of directors and your leadership team is still in charge at NAR HQ. We're all Realtors just like you.

All this stuff was disclosed, discussed, and voted on at the the BOD meeting in Las Vegas and the Washington meetings in May.

"A board of directors was approved for Second Century Ventures during the association's conference in Las Vegas in November, said Mark Lesswing, director of the National Association of Realtors' Center for Realtor Technology, an in-house division that supports NAR members, state and local Realtor groups and multiple listing services in the development, selection and use of technologies.

Dale Stinton, CEO for NAR, was named an ex-officio member of the Second Century Ventures board, and other NAR representatives include: Ron Phipps, Jeff Young, Steve Harding, Jim Helsel, Dale Ross, George Stephens and Colleen Badagliacco, according to a report presented at NAR's board of directors meeting in November. The company's board will also include an "outside director to be determined.Helsel, of Lemoyne, Pa., is a member of NAR's leadership team and serves as 2008 treasurer for the trade group. He has been a Realtor for 33 years and is a partner with RSR Realtors, a real estate brokerage company in Harrisburg, Pa.

Phipps, a Realtor since 1978 who served on the national association's 2007 Executive Committee and is broker-president of Phipps Realty Inc. in Warwick, R.I., was among a recommended slate of candidates for NAR officers in 2009.

Young is the incoming president of the Michigan Association of Realtors, Harding is executive vice president of the Tennessee Association of Realtors.

Ross in 1994 co-founded the Washington, D.C.-area Metropolitan Regional Information Systems MLS and served for nine years as its president and CEO.

Stephens is a director for the Houston Association of Realtors, and Badagliacco served as the 2007 president for the California Association of Realtors trade group.

The new company will "pursue the evaluation, investment and monitoring of technological opportunities focused on the real estate industry" and "offer and provide financing and funding for the development of technology applications focused on the real estate industry," according to information presented to NAR's board in May."

Steve Harding is the Executive Officer of my Tennessee Association of Realtors and a great guy. All the rest are Realtors as well or have strong ties to Realtor organizations.

Last May "Directors (that's us, your board of directors, all Realtor members just like you) received a report on the articles of incorporation for a planned new corporation that will "pursue the evaluation, investment and monitoring of technological opportunities focused on the real estate industry," and "offer and provide financing and funding for the development of technology applications focused on the real estate industry."

Read the story at Inman for the proverbial "rest of the story"

The NAR Board of Directors has representatives from every state; we're not hard to find and we spend a lot of volunteer time (as do all the NAR committees and their volunteer leadership and committee members) looking out for your best interests.

"The Board of Directors is the governing body of the Association. Some of the responsibilities of the Board of Directors include:

Approving expenditures of the Association
Setting dues
Setting public policy positions as they pertain to the real estate industry
Establishing governing policies of the Association
Approving member programs, products and services
Approving amendments to the bylaws and recommending to the Delegate Body constitutional and code of ethics amendments
Recognizing members for outstanding services (REALTOR® Emeritus status, DSA, etc.)
Defining local board jurisdictions"

Thanks for keeping us informed!

Jim your comment is very informative as well, glad you contributed! Storms can brew quickly!

Since this is ALL new to me I'll be digging a little more.

This just shows the under currents and skepticism created by NAR directors and leadership over the years. Most areas relating to real estate legal issues have been monitored other informational supported statistical reports caused media programs to gain top ratings at the industries expense. So a wait and see, read and understand attitude is prudent. They say the devil is in the details. Nice post Lenn.

A quote from Jim Lee on this topic:"offer and provide financing and funding for the development of technology applications focused on the real estate industry."

With all due respect, isn't this where the entrepreneurial, capitalistic qualities our economy is based on kick in? No risk, no reward. Easy money = lower efficiency. (I am not suggesting this pertains to NAR, but to whatever firm/s might receive grants). Perhaps the same funds could be used in more of a PR or motivational approach to illustrate how individual firms might financially benefit once their new applications are proved successful. Funds could then be used to filter the access to the new technology applications back to us all...Of course, being that we are mainly tech savvy, the latter would cost little...

I'm sure as more specific information becomes available you will find more support. Perhaps NAR could create a campaign or letter to members better explaining the finite details of the plan and highlight it in their weekly/daily emails...and if they do, surely post a copy of it here as well.

DEC

2007

Jim. Thanks for the information. I have not gotten a word of any of this from my local boards and I belong to three of them. Since it appears that the NAR plans to evaluate proposals beginning in January, a timely specific announcement could have been distributed.

As Natalie says, "offer and provide financing and funding for the development of technology applications focused on the real estate industry." would have gotten my attention as did the Inman article. So, I don't believe that this company is general knowledge in the membership.

I've read every word I can find about Las Vegas and can't find a word about it.

I guess you had to be there.

It will be interesting to see how this one plays out. Don't get your hopes up yet.

This seems like a truly bad time to request more money from members, especially for a venture that has not been explained to us. It does sound like they have gone way beyond their core business and need to refocus.

Not so fast, I AM holding my breath until we know more about this. 1.3 Million Members and only a Vegas handful know about it until Lenn Harley comes along to tell us Inman got the scoop?

$20,000,000 is enough change to buy Realtor.com back into the ranks (WHERE IT BELONGS) and since it should be a fire sale anyway, there's bound to be enough left over to create what it was supposed to be to begin with.

There won't be $20M lying around to play with, though. The bubble in housing led to a bubble in the membership. As the correction in housing continues to take place, there is and will be a correction in the membership roster as well. What will NAR do when membership levels, much like housing, return to pre-boom levels? In 2000, there were 766,560 members. As of November 30, 2007 1,357,993 members exist.

The time to raise dues was when the going was good and so few had enough time on their hands to pay attention. We're blogging now, baby and nothing is getting past us.

NAR should be budgeting for hard times like the rest of us.

Signed,

Blue In The Face

Amanda. Thanks for commenting. I am not comfortable with the NAR engaging in:

"offer and provide financing and funding for the development of technology applications focused on the real estate industry."

It definately bears watching. But, fact is, our hands are tied. It appears that the deed is done.

DEC

2007

Wow! I'd be curious to see how the powers that be at NAR look out for our interests in these new ventures, considering that WE own NAR!

I hope that it's better than how they've done with looking out for our interests with MOVE, Inc.!

Thanks for bringing this to our attention!

Bob Mitchell

ValueList Real Estate Services, Inc.

NOV

At the recently concluded Orlando meetings we were presented our official charter for the "Realtor Federal Credit Union" which is expected to be open for business in May of 2009.

Totally virtual with a 24/7 US BASED call center for your banking convenience.

Realtor Mike Brody led the task force to make it happen.

This is a part of our Second Century Initiative to keep Realtors strong and viable in NAR's Second Century

There are pages of information about this and other Second Century Initiatives at www.Realtor.org for members.

All done by Realtor members of NAR just like you and NAR staff.

Leave a response…

Name:

Email:
(optional)

Comment:

What does the graphic say?