Out of state, out of mind
What do these have in common? Each illustrates the need for California-specific treatment and application. Yet the versions of these fundamental materials and topics produced by the California Association of Realtors® (CAR) originate outside the state of California.
What’s the deal with that?
Let’s start with real estate forms. CAR forms software is produced by a Michigan-based company known as zipLogix and formally registered under the name RE FormsNet, LLC. — of which Joel Singer, CEO of CAR, is also the CEO. It’s no secret — Singer is listed prominently (you might even say brazenly) as CEO on both organizations’ websites.
Additionally, CAR continues to shop out renewal courses for licensees to OnlineEd, an education provider based out of Oregon which provides generic continuing education (CE) to California licensees — education that might well be acceptable in any state.
And when it comes to ethics codes, CAR, as we have noted before, doesn’t even have its own — it outsources that responsibility to the code of the National Association of Realtors® (NAR), CAR’s national wing.
And while all of these items have problems beyond being out-of-state, this is the issue we have criticized most frequently and decisively. But why is it so important that all these things come from California? What is about having them originate elsewhere that makes them less valuable?
It’s all about specificity
Take OnlineEd, for example. If we set aside its other problems (it’s purported difficulty , impossible quizzes and poorly designed interface), the fact of it being an out-of-state provider does not make it inherently ineffective as a course in a general sense. But it is ineffective for California licensees who want and need critical insight into California goings-on.
Look, California is the world’s fifth largest economy. Rules governing the ways California real estate agents conduct transactions simply do not parallel such rules and manners of conduct found in other states. Additionally, civil and case law differs vastly from state to state. Why then would we accept CE not written to apply specifically to the California rulebook?
The same principle applies to the code of ethics to which California real estate agents may be expected to adhere — whether CAR members or otherwise.
Because real estate law — and thus real estate procedure in terms of transactions and agency — is unique to each state, the standards imposed with regard to ethical conduct need to be state-specific as well. But this is not the case, at least not for California.
Real estate agents in California who are members of CAR are subject to the code of ethics laid out by NAR. While the NAR code is not inadequate in and of itself, its provisions are vague enough to function in any state in the country. And furthermore, the code is not backed up by California statute, rendering it practically pointless. We are not a one-size-fits all state.
The forms fracas
Forms software is a different beast altogether. Obviously, the state in which a piece of software is used does not determine the effectiveness of that software. That said, zipLogix is the product of an entity that claims to be by and for Californians. This works as a symbolic argument, but in practice, the impact of CAR’s actions is anything but symbolic.
CAR executes a pattern of aggression when it comes to its forms software, going so far as to sue the digital document management company PDFfiller for alleged copyright infringement resulting from the use and distribution of CAR forms. The move was a curious one on CAR’s part, given the aforementioned conflict of interest regarding Joel Singer’s control of both CAR and zipLogix.
Editor’s note – Connor Wallmark, first tuesday President and Production Manager, was subpoenaed by both participants to testify at a full-day deposition on April 23rd, 2018.
first tuesday was not a party to the litigation, but as a competitor, does publish real estate forms used for the same professional purpose as CAR forms.
While CAR’s attack against PDFfiller did not ultimately come to fruition, the conundrum presented by its pursuit of membership dues at all costs makes the idea that it is an organization which cares about the well-being of its Californian members above its own interests laughable.
Again, none of this is to say that the zipLogix software doesn’t work, just that it limits the choices available to its users and puts money directly into the pockets of CAR’s leadership. It also positions the association in such a way as to create a functional monopoly on forms.
The common denominator
The point of rehashing all this is to say that CAR has a habit of taking the easy way out — specifically, one that is expedient and profitable for its ownership, and less beneficial for its members . Instead of ensuring its education and ethical practices are up to snuff, the association farms out the effort involved to out-of-state providers, without regard to California’s distinctive laws and practices.
The irony here is that CAR’s goal seems to be one of domination, not diligence. Many of their actions — from their catastrophic forms takeover to their embrace of OnlineEd — have been undertaken with the implicit purpose of crushing the competitive marketplace in California.
Editor’s note — Where forms are concerned, this was particularly effective — first tuesday was once a competitive participant in the forms marketplace before we began offering them for free as a result of CAR’s actions.
However, the California real estate industry, whether it comes to forms or education, thrives on competition. CAR’s hostility toward any competition in its pursuit of being a one-stop-shop for all things real estate is inherently harmful to the California real estate industry, as it limits choice. This practice goes a long way toward preventing the best real estate products and attitudes from rising to the top and becoming the norm for all California brokers and agents.
In other words, what CAR offers in convenience, it loses in innovation, and therefore in quality.
The most frustrating part of the situation is that CAR members know all this — our readers overwhelmingly agree that CAR’s services are not worth the excessive annual dues.
But if this is true, why does CAR have a membership base at all?
A lot of it is top-down pressure. We have received countless reports of real estate agents who have attempted to use RPI forms in transactions, only to be rebuffed by agents who are told CAR forms are the only acceptable option. And even as the misconception that placing listings in a local MLS is contingent on CAR membership declines, CAR membership makes the listing process convenient — at an exorbitant cost to the licensee, of course.
In addition, brokers who are in bed with CAR require the agents working under them to be CAR members as well, whether they like it or not, expanding CAR’s gravitational pull.
So what can licensees do to combat this pressure?
California real estate for California agents
Convenience over quality is CAR’s modus operandi — but it doesn’t have to be this way for the whole California real estate industry.
In order to ensure a consistent level of quality for real estate services across the board, licensees need to seek out forms and continuing education that are tailored to state law and state practice.
Those CAR products and services that are reliant on one-size-fits-all, out-of-state guidelines are actively detrimental to the overall knowledge and ability of California’s current batch of licensees, particularly when it comes to education. Although education is the worst offender, it isn’t the only one. Farming services out of California is an ongoing pattern, and it says a lot about who CAR holds in higher regard — its members or its bottom line.
CAR may value convenience over quality — why should the rest of us?