I have never hidden my dislike of the National Association of REALTORs, which is ironic because I am a member. My primary distrust and dislike of NAR stems from them allowing the monetization of its membership by Move, Inc who is the operator of realtor.com and the “membership by force” tactics that NAR uses. I’ve even suggested that the REALTOR brand had become obsolete.
Yesterday, a rumor surfaced that Trulia was potentially looking to acquire Move, Inc. The interwebs went crazy with dissension and complaints, but I think this could be great news for REALTORS.
How Could The Merger Be Great?
The original agreement between NAR and Move, Inc was written back in 1996. The agreement is what is known as “evergreen,” meaning that there is no expiration date. The agreement was also written very specifically with specific metrics that must be met, however those were metrics written in 1996.
I think we can all agree that a LOT has changed on the internet since 1996, right? For example, NAR requires that REALTOR.com have a minimum of 500,000 visitors each month. In 1996, that number was big, but fast forward 18 years and that number is peanuts. Realtor.com had 22.9 million visitors in February of 2014, but was eclipsed by Trulia with 27.4 million visits and Zillow commanding 52.2 million visits.
Under the original guidelines of the agreement, the acquisition of Move, Inc without NAR’s consent is grounds for termination of the agreement. This means that NAR could use this merger as a significant leverage point for negotiating a new, updated agreement that is more beneficial for NAR members. Since this merger is with Trulia, it is conceivable that NAR could push these negotiations to include Trulia.com in addition to Realtor.com.
Imagine if NAR required direct, “follow” links to each listing agent and broker’s website? Removal or limitation of advertising on listings supplied by REALTOR associations? An increase in fees payable to NAR by Trulia and Move?
The options are limitless and the significance cannot be understated.
Starting From Scratch?
What if Trulia and Move just decided to terminate the agreement and go through with the merger anyways? While there would be a transitional phase, NAR would not be starting from scratch. According to Move’s annual filing with the SEC,
If our operating agreement with the NAR was terminated, we would be required to transfer a copy of the software that operates the realtor.com® web site and provide the NAR with copies of our agreements with advertisers and data content providers, such as real estate brokers or MLSs. The NAR would then be able to operate the realtor.com® web site itself or with another third party.
This means that NAR would once again totally control and own Realtor.com without a third party involved. The Trulia and Move Merger has generated some heated discussions, but when you stop to think about the different aspects of it, the Trulia/Move merger could be great for REALTORS.