Cover up, circle the wagons, pounce on critics: NAR’s MO

Publish Date: August 30, 2023

Written by Brad Inman

- Originally published at Inman News - Brad Inman

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A top real estate executive sent an email to a small list on Monday slamming NAR, in the wake of the sexual harassment scandal.

Years ago, the same exec was the topic of a whisper campaign about his own sexual exploits with an agent or two working in his firm. Inman never reported it, because it was unclear what lines were crossed, if any, and difficult to confirm certain details.

Suddenly, the entire industry is on its soapbox, ripping into the National Association of Realtors.

We welcome the company. But the issue is bigger than sexual harassment.

For too long, NAR has stifled dissent. Many critics were unwilling to challenge the trade organization because of how it wielded its power.

In July, I talked with two female real estate executives right after Inman broke the news of the NAR sexual harassment lawsuit.

I asked why they weren’t voicing their concerns publicly.

I heard corporate gobbledygook with words like “inappropriate.”

Anywhere Brands CEO Sue Yannaccone spoke out on Sunday demanding changes at NAR, including president Kenny Parcell’s resignation.

She broke the industry leadership’s code of silence.

The story behind the story is the overall fear culture at NAR.

The sprawling, powerful trade group can be secretive and cultish. If you don’t volunteer, you are shamed. Criticize the beast, and you are ostracized. Leaders and employees who speak out are often isolated and criticized for not following the NAR script. Just ask former reform-minded presidents Leslie Rouda Smith and Elizabeth Mendenhall.

The pattern goes like this: an incident, a firestorm, then coverups, followed by the circling of wagons and the pouncing on critics.

When Inman first reported the sexual harassment lawsuit, we received a demand  letter for a retraction from an unofficial band of association and brokerage leaders.

Our editors asked what was factually wrong with the story and they promised a correction if anything was inaccurate.

We never heard back.

The sin was our audacity of printing embarrassing facts about NAR.

Shenanigans at the National Association of Realtors helped give birth to Inman.

It was launched in 1996 as an independent news service with our very first story on a NAR scandal.

Challenging the trade group became our mark, and we discovered hundreds of thousands of readers wanted sunshine on their trade group.

With many talented staff and volunteers, NAR does much more good than bad, which Inman consistently covers. But like all powerful groups, power can and does corrupt.

Deposed President Kenny Parcell cared about NAR, no doubt, but it appears power went to his head and he swung it around carelessly.

And he got away with it because collective accountability is often absent at the trade group.

Former CEO Dale Stinton often said privately that one threat to the long-term health of the powerful association was the trade group’s sprawling volunteer governance structure.

With a 75-person executive committee, the NAR board of directors has 1,200 members. Many of these elected (anointed) volunteer leaders have created fiefdoms and receive generous perks, including first-class travel. Overseas boondoggles are common, and local associations also pile on the bennies.

No one wants to rock the boat, and protest is frowned upon.

The arcane volunteer structure prevents proactive decision-making and erodes individual accountability.

The handling of the recent sexual harassment charges is evidence of how dysfunctional the system is.

NAR has never faced more tricky market, political and legal issues.

A changing of the guard is a necessary first step to facing these challenges.

Now, tougher reforms are in order, but based on its history, will be much harder for NAR to achieve.

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