Is anyone besides me concerned about the NAR and how it appears to be forgetting how to treat its members? The recent purchase of Cendant’s Move.com by Homestore.com for over $800 Million has gotten me thinking about this.

Let's start with some background. NAR pointed out the need for Realtors to control their data – in fear of the “lion coming over the hill” in the form of Microsoft or some other non-real estate entities.

So, NAR created RIN (Realtors Information Network) but failed to the tune of about $15 Million of its members’ money.

NAR then struck a deal with Stuart Wolff to outsource the aggregation of our data. Not a bad idea…and Homestore.com was born.

Homestore.com is a now publicly held company that contracted with NAR to run its Realtor.com, through a subsidiary of Homestore.com called RealSelect.

In theory, having our trade association control and aggregate our data for us makes sense. In fact, we have recommended Realtor.com and its products because we wanted to support the NAR-sanctioned portal. However, in the course of all this, I feel the NAR has forgotten it serves over 780,000 diverse members who compete with one another. Neutrality on NAR’s part is critical.

Large sums of money perhaps have clouded the idealistic vision of what NAR should be. Since the inception of Realtor.com, the NAR has sold some of its Homestore.com stock for almost $53 Million in cash, and still holds almost 5% of the outstanding shares of Homestore.com, worth today around $80 Million.

The NAR and Homestore.com were sued by Cendant shortly after Homstore’s IPO, claiming they did not have the same early stock opportunities as some MLSs, some brokerages and franchises, and as some particular individuals inside the NAR did. That suit asked for more than $600 Million in damages.

Cendant then created Move.com, a real estate portal that included the listings of the Cendant brands, and tried to compete with Realtor.com. It was losing money. NAR’s legal council (L. Janik) and Homestore.com’s officer (S. Ozonian), claim it was a real competitive threat to Realtor.com’s viability. So Homestore.com bought the money-losing company for more than $800 Million! Oh, by the way, that $600 Million lawsuit by Cendant went away.

That purchase gave Cendant over 21 million shares of Homestore.com stock, representing over 21 % ownership of the company, according to Richard Mendenhall, current NAR president. Cendant, one of my company's competitors, now is the single largest shareholder of Homestore.com, the company we rely on to run Realtor.com.

To be fair, there have been significant safeguards built into the deal. According to Homestore.com representatives, Cendant’s stock is restricted in several ways. They cannot buy or sell any stock for a period of years, and their stock must be voted with the majority of other shareholders.

However, this is where I see NAR’s conflict of interest. How can the NAR, with $80 Million worth of Homestore.com stock, without bias, ever question Homestore.com’s performance, or question whether Realtor.com should be operated by some other entity?

Let’s look at what Realtor.com and Homestore.com do.

Homestore.com gets its listing data from NAR members (mostly through MLS systems) to create the real estate portal with the most homes for sale. Homestore.com pays the MLS systems for this data. This content is the main asset of Homestore.com. That is what brings people to the site.

Realtor.com then approaches you and says, “We have the most content and the most eyeballs on our site, so you should buy your webpage from us. Oh, by the way, your name and phone number and email address won’t appear on your listings unless you buy our package.”

So we buy the pages from Realtor.com so our clients can view our data that we gave to Realtor.com. Doesn’t seem quite right coming from our own trade association, does it?

There is a new product being developed by Homestore.com, Realtor.com, the NAR, Cendant, and GMAC called “eRealtor.” This is the Internet-based platform for sharing information among all parties to a transaction. Let me get this straight…my competitors want me to give them all the information about my transactions that will reside on Homestore.com servers. And they will probably want to charge me for each transaction, too.

None of these ideas are bad on the surface. The tools are things we all need and use. Realty Executives International last year contracted for iLead pages for all of our U.S. agents. This made us the largest single-check customer of Realtor.com. Cendant was not the largest shareholder of Homestore.com at that time, either.

What bothers me is that my trade association has partnerships with other members that are my competitors. And they all want to benefit from me paying them. I believe that the NAR must stay neutral and divest itself of these arrangements if they want to maintain the confidence of its members.

We can accelerate this process by being pro-active. Here are some ideas for action. Some are far-fetched; others are pretty realistic.

• Ask your local and state Realtor associations to hold your NAR dues in escrow until this is addressed.
• Get 780,000 Realtors to contribute $500 each to raise $390,000,000 to buy Homestore.com stock and take control of the company.
• Create a neutral co-op of Realtor members that would aggregate the data for its members and sell it to the appropriate portals, and distribute the income back to the creators of the data. I actually thought this was the original intent of Realtor.com.
• Take control of your own data. You control who gets it, who doesn’t, and you get paid for it.

If the NAR were truly OUR trade association with all of its members’ interests in mind, it would help us create that neutral co-op that compensates the members, and it would help develop a standardized software package for brokers to capture their own data first.

So, in order to protect yourselves and your assets, I call upon all of you to take control of your data, and stop giving it away. That is the first step that we all need to take. If Homestore.com doesn’t get your data, or has to pay you dearly for it, you have taken control.

I go back 35 years to one of the principles this company was founded upon: The people who create the income in real estate should receive the highest possible amount of that income.

Let’s get the attention of our trade association and get it working for us. We need the NAR to serve its dues-paying members, rather than view us only as buyers of their products.

Richard A. Rector, is the chairman of Realty Executives, one of the top ten real estate franchise organizations in the nation, and one of the first "100 Percent" commission organizations.