This article covers the California Association of Realtors® (CAR)’s recent advertising push, an upbeat campaign that’s hard to square with its long history of domineering, monopolistic tendencies.
Getting the word out
In the last few months, the California Association of Realtors® (CAR) has ramped up its outreach into the larger California real estate industry.
The campaign, which includes a TV spot and marketing initiatives on various social media platforms and podcasts, highlights CAR’s brand as “California proud,” as well as the ethical standard allegedly unique to their brand.
While there’s nothing nefarious about an association that collects millions of dollars in member dues each year trying to ingratiate itself to the public at large, what is nefarious is the way CAR misrepresents itself and its ideology.
For starters, CAR’s claim that it as the wing of a national association is particularly “Californian” is a bit rich, especially considering their reliance on out-of-state education — not to mention their lack of a California-specific code of ethical conduct.
Although CAR — or rather, their countrywide manifestation, the National Association of Realtors® (NAR) — does have a code of ethics, it is a generic document that, while useful, is enforceable only by and within the organization itself. Further, this code doesn’t offer any consumer protections in addition to those that already exist in California real estate law.
The larger issue is that while individual Realtors® are obligated by dint of their membership to abide by CAR’s code of ethics, the trade union itself has no such obligation — and fewer scruples.
Starving the competition
The laundry list of CAR’s dodgy behavior is long — and well-trodden — but it’s worth revisiting how the association has actively harmed the California real estate industry.
The problems with CAR arise largely from its monopolistic ambitions. Even though many California real estate agents consider the cost of a CAR membership to outweigh its benefits, the trade union boasts hundreds of thousands of members. The high volume of membership points not to the effectiveness of the organization as a union, but to the culture of necessity it has constructed around itself.
Look no further than multiple listing services (MLSs). An invaluable tool for the business of any broker or salesperson, a surprising number of agents still believe CAR membership is required to place listings in their local MLS. Not so — but the myth has persisted long after it should have died, and all the better for CAR, when that disinformation keeps its members coming back for more.
Real estate forms, too, present an area where CAR has not only cornered the market, but crushed it. While California was once home to a thriving market for independently published real estate forms — including those produced by firsttuesday — CAR’s inclusion of so-called “free” forms as a membership benefit snuffed out any competition and established their generic forms as the de facto standard.
Editor’s note — Forms published by Realty Publications, Inc. (RPI) are legal and 100% free to download for anyone — no membership of any kind required, no strings attached.
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Let no monopoly go unnoticed
CAR’s attitude toward both MLS access and real estate forms have landed the association in hot water.
As far back as the seventies, sales agents struggled to get out from under the thumbs of local associations of Realtors® (AORs) that believed only AOR members were entitled to MLS access. As a result, the California Supreme Court ruled restricting MLS access was a violation of the Sherman Antitrust Act. [Marin County Board of Realtors® v. Palsson (1976) 16 C3rd 920]
Further, the U.S. Department of Justice (DOJ) and NAR butted heads over MLS restrictions as recently as 2020 — also citing Sherman violations. While NAR agreed to modify its practices, including allowing for a greater degree of transparency, history does not provide a kind lens to look at how the association will handle this practice in the future.
As far as the forms market goes, CAR tightened its grip so much that in 2016 it was subject to additional antitrust allegations from PDFfiller, a company CAR targeted for hosting trade association forms on its platform. PDFfiller rightly pointed out that CAR’s hold on the market was near absolute, and the union’s territorial behavior served only to dangerously stifle any competition.
As often as CAR has been accused of monopolistic sentiments, it has seldom changed its behavior in any meaningful way.
All this is to say that when CAR throws around claims of California pride and professed higher ethical standards, the organization turns a blind eye to its own actions. It’s difficult to read this campaign as anything but a push to bring more agents into the flock.
The truth is association members are not any more or less ethical or Californian by dint of being Realtors®. It is not only disingenuous to claim otherwise, but damaging to the many independent California real estate licensees who opt to work outside the reach of CAR’s hungry gravitational pull. At the end of the day, when CAR tells you it’s the pinnacle of ethical conduct, remember: its record speaks for itself.
good article!