By Jeremy Conaway
Many industry participants have now had the chance to hear and learn about the new Pinnacle Group Program. Sponsored by the National Association of REALTORS® and more than 50 state and local REALTOR® associations the Pinnacle Program is focused on reengineering both the state and local REALTOR® association. The goal of this ambitious program is to ensure that, moving forward, state and local associations become a recognized part of the new industry solution.
Given the priority which has been assigned to this goal, it might come as a surprise to many that Pinnacle’s first objective will be to assist participating associations to understand the intricacies of creating and respecting positive relationships with consumers.
In an attempt to head off a massive protest relative to how such a relationship would inappropriately interfere with brokerage operations, the following thoughts are provided.
There are two forms of consumer relationships as they relate to the real estate marketplace: Civic and Transactional. Civic-based consumer relationships is founded upon the common interests of the consumer and another party in the benefits of living in a community that celebrates the values of a quality community including the virtues of private property and homeownership. This relationship does not exclude consumer households that must, or choose to, rent their residential accommodation.
Transaction-based consumer relationships are created around a consumer’s active efforts to qualify for and complete an actual real estate transaction. The Pinnacle program recognizes and honors the fact that the transactional consumer relationship is the exclusive province of the real estate broker and agent. Going one step further, the Pinnacle program also advocates the idea that the existence of a positive civic relationship, indeed a partnership, between the “yet to be transitionally active” consumer and a state or local REALTOR® association will have great value in promoting a positive consumer attitude regarding the role of the REALTOR® in the transaction.
In today’s real estate marketplace, very few brokers and even fewer agents can be classified as being powerful and/or influential in their state or local communities and even less can lay claim to the level of financial and civic power and influence enjoyed by their predecessors. There is just no time for brokers or their managers to become engaged in their communities.
Out of some manner of respect or courtesy, this vacuum has not been either recognized or filled by either REALTORS® or REALTOR® associations. This civic energy vacuum has, on the other hand, been filled by thousands of Generation X and Y consumers whose focus on quality-of-life issues has driven them into volunteer and elected positions of power and influence in their cities, towns, and communities. This situation is made even more difficult by the fact that the REALTOR® movement has, for some good reasons and some not-so-good reasons, elected not to address the continuing “respect” crisis that has seen consumer respect for REALTORS® continue to hover around the bottom of the scale. The industry has adopted an attitude that seems to say “if they don’t respect us, then why do they continue to use us?”
The answer is simple. Consumers like the REALTORS® they know, but disrespect the species at large. Recognizing this new order, alternative brokerages and “non REALTOR®” real estate marketing programs such as Zillow, Trulia, and Redfin are designing websites, tools, mobile apps, and online services to capture this new consumer before they elect to access the “one we know and love” REALTOR®.
In this situation it would appear that REALTOR® associations are the only REALTOR® resource available to bridge both the current power vacuum and respect gap.
For those who still question the need, consider what lies ahead. The stressed economic events of the past several years have placed state and local governments in dire need of raising revenues to fund what some believe are out of control costs.
Increasingly, state and local governments are looking to the taxation (both taxes and fees) of residential properties as their “golden egg.” At some point, these increased burdens upon homeownership will break the younger generations’ ability to meet the financial challenges of owning their own home.
The evidence also suggests that, as the lifestyle preferences of Generation X and especially Generation Y began to play out in communities across the country, those preferences that appear to be different than what is accepted by the “in control” Boomer generation politicians are being blocked and/or frustrated by statutes and ordinances.
In all likelihood, for both financial and cultural reasons, individuals and households from the X and Y generation will not be able to and/or may not elect to enjoy the homeownership experience in the same way as the Boomer Generation did. Most popular among these prefer/ences is the growing idea of “doubling up,” discussed by Stan Humphries of Zillow at the “Gathering, where two or more households share the same property. (11.7% of households at this time).
Accordingly, in order for a new market to form and new lifestyle preferences to be accommodated, many communities will have to alter their current zoning and/or land use regulations. The failure to make these changes could have a devastating effect on both homeownership and private property rights. This is going to require power and influence.
State and local REALTOR® associations should work to create civic relationships with the consumers of their communities. We can do this.
[Editor’s Note: Jeremy Conaway is a keynote speaker, conference facilitator, and consultant to the Real Estate industry. He is President of RECON Intelligence Services, firstname.lastname@example.org,