Question #21

NAREP StopSignRob Hahn published a detailed and most entertaining analysis of Texas broker Ben Caballero and the National Association of Real Estate Professionals (narep.NET – not .org or .com) that Ben founded about a year ago. In the post, Rob poses 20 questions to Ben about his real estate business, his business practices, and the current status of the NAREP non-profit organization. But he missed the biggest question that has been in my mind since I first heard about NAREP.

Why?

NAREP was created with the express purpose of stopping “syndication abuse.” Toward that end they created the Real Estate Professional’s Bill of Rights. The document “aims to ensure that proprietary real estate listing data are used in a manner that serve the interests of consumers, real estate professionals, and publishers. This Bill of Rights shall apply to all online and print media that publish listing information, including desktop and mobile applications.”

After a quick read of the ten major bullet points, it becomes evident that the doctrine is aimed squarely at the major national publishers. All but three of the “rights” not only demand changes in display practices by the publishers but actually require that the publishers change or abandon many of the business practices, not just display practices, that made them so successful. Seven out of the ten points contain requirements that if followed by many of the publishers would insure their self-destruction. It’s pretty clear that NAREP isn’t so much concerned about fair display of listing information as it is bent on the elimination of the national portals.

Back to the question of “why”? I don’t ask “why” because I don’t know what the motivation is behind this organization. That is pretty obvious. I ask “why” they chose to use this tack when they know for absolute certainty that no national publisher who wants to stay in business would, or even could, agree to all of the points in the Bill of Rights.

I am reminded of the recent kerfuffle in Washington, the government shutdown of 2013, caused by a small group of elected radical extremists hell bent on destroying the Affordable Care Act of 2010. They launched this crusade and brought the government to a screeching halt while knowing full well (because they were told by the more rational branches of the their own party) that this kind of blackmail or extortion not only wouldn’t work but it would, in the long run, damage the reputation of the party and undermine their attempts to regain the Senate in the 2014 elections.

Yet they persisted. And in the end they lost. Their futile attempts to usurp the authority of the Senate and the executive branch of the government and single-handedly repeal a law, approved by both houses of congress, signed by the president, and that withstood Supreme Court scrutiny was, in the end, a “tale . . . full of sound and fury. Signifying nothing.”

I see the same sort of mentality at play in the NAREP philosophy. Any real estate practitioner with more than a few years experience and some broad exposure to the issues and debates of the day could, if asked, advised NAREP that their demands were impossible for publishers to meet. Indeed, the advice from long-time esteemed advisers at Clareity Consulting, whose similar draft of a Syndication Bill of Rights was used as a basis for the NAREP rewrite, would certainly have been moderation had they been asked.

NAREP published a list of constraints that no publisher could possibly agree to without at the same time throwing in the towel and giving up on their current business model. So if it is that obvious that the Bill of Rights couldn’t succeed, one must question the intent of the organization. Surely it isn’t just to stir the pot and generate a ton of publicity for the organizers. The most successful real estate broker in the nation with over 2,200 closed deals worth $668 million in 2012 doesn’t need the free publicity. Even at a 1% commission rate, that’s nearly $7 million in revenue. If I were drawing down that kind of coin, I’d be sipping umbrella garnished beverages on my sailboat in Margaritaville rather than trying to reform an industry that had been very generous to me.

So my question, #21, is Why?

for this post:
Cause: Obfuscated intent
Effect: Bearding authority

This post appears on Notorious R.O.B. as well.