Nearly every kind of organization has a board of directors. The general duties of a board of directors remains similar across different industries, but boards may take different forms in some industries than others. The real estate industry is somewhat unique in this regard.
Most real estate brokers are self-employed; they don’t work for a company or another form of employer that sets their hours or provides them with clients. Instead, real estate brokers typically operate independently, developing their own branding, schedules, and client bases. Many real estate agents are attracted to the high degree of flexibility and independence that comes with the job.
However, many real estate agents also recognize the value of sharing resources and maintaining a reliable professional support network. This understanding led to the formation of the first real estate associations. These associations are independent membership-based boards that function as self-governed organizations and provide various benefits to real estate board members. The National Association of Realtors (NAR) is the largest board of realtors in the United States. Most local real estate boards are affiliated with the national association of realtors and abide by their national real estate board regulations.
Board of Realtors Functions
Local boards of realtors serve several important functions:
Training opportunities
Local real estate associations can provide members with access to licensing exams, as well as training materials, prep courses, license renewal resources, and sometimes discounted or even free course packages.
Resources
Membership on your local board of realtors can also help you gain access to other kinds of real estate resources, like information about recent legislation that impacts the real estate industry or help with legal questions. Local real estate associations may also be able to supply members with reports containing local housing market statistics.
National Association of Realtors membership
When you join most local real estate boards, you often have the opportunity to join the National Association of Realtors as well. NAR membership comes with benefits on a national scale. You can take advantage of the association’s extensive network of resources and enjoy the boost in credibility membership brings.
Industry connections
One of the greatest benefits of real estate board membership is the networking opportunities it provides. Joining a local real estate association is a very effective way to connect with other real estate brokers in your immediate area. This gives you convenient access to relevant business connections you might not otherwise have made. Local real estate boards also often host networking events or other gatherings that can help real estate agents make valuable industry connections.
National Association of Realtors
The National Association of Realtors, or NAR, is a nationwide association of real estate agents in the United States. The association’s purpose is to advocate for real estate agents in a variety of ways on both a state and federal level. The National Association of Realtors also maintains connections with the majority of local realtor associations.
The National Association of Realtors is governed by a board of directors. Like a board of directors at any kind of organization, the NAR board of directors is responsible for making strategic decisions regarding the overall direction of the association and ensuring the organization remains on course toward its objectives. The national real estate board composition consists of members of the organization.
The national real estate board’s governance concerns a few key responsibilities:
- Deciding the association’s public positions on policies related to the real estate industry.
- Creating and helping to uphold the association’s governing policies.
- Approving the association’s expenditures.
- Setting membership dues.
- Proposing amendments to the National Association of Realtors Constitution and Code of Ethics and approving amendments to the NAR Bylaws.
Every member who sits on the National Association of Realtors board of directors represents the association’s body of members as a whole. Each individual director on the NAR board of directors must understand and fulfill a few important duties and responsibilities:
- Familiarizing yourself with the issues that matter to the realtors in the area you represent and communicating these issues to the board leadership.
- Familiarizing yourself with important issues the board discusses and/or takes action on and communicating those matters to the realtors in the local area you represent.
- Attending and actively participating in National Association of Realtors board meetings.
Above all, each board of directors member is expected to prioritize the collective good of the National Association of Realtors over their own personal opinions about policy matters.
Real Estate Board Structure
Most local real estate associations in the United States maintain ties with the National Association of Realtors. This creates a structure where national rules and regulations set by the NAR “trickle down” to local board associations. Each of these local real estate boards provides local benefits, resources, and services, but exists under the overarching governance of the national board.
Every local association of realtors must abide by certain board responsibilities created by the national board of directors. Members who hold national board roles are in charge of setting these responsibilities, but it is the collective responsibility of every NAR member to uphold them. These duties and responsibilities often pertain to ethics, advocacy, consumer outreach, legal compliance and professional development, technology, and financial solvency.
Ethics
Each local association must have an official process for ensuring the NAR Code of Ethics is upheld by all members and a dedicated committee for carrying out that process. Local associations must also provide members with training regarding the Code of Ethics.
Advocacy
Local associations are also expected to contribute to political advocacy campaigns that are in the best interests of the National Association of Realtors. There are a few different ways this responsibility can be fulfilled, such as fundraising from local members or a corporate contribution. All local associations are also required to promote certain activities related to diversity and equality. There are many other ways local realtor associations are expected to advocate for NAR members as well.
Consumer outreach
According to the National Association of Realtors, every local association must participate in a minimum of four activities designed for consumer engagement each year. These activities should promote the association as a real estate authority in the local market and demonstrate how the association is positively impacting local communities.
Legal compliance and professional development
Local real estate associations are required by the NAR board of directors to maintain access to legal counsel for all members. Each association must also maintain adequate corporate documentation verifying legal compliance in all applicable areas, and local association executives must meet certain annual legal training and certification requirements.
Technology
Every local association is required to create and maintain a website that provides access to certain resources and services as outlined by the NAR board of directors. Each association must also facilitate email or another internet-based method of communication for its members.
Financial solvency
Individual local associations must each maintain adequate policies to ensure the financial security of their operations. The National Association of Realtors’ financial solvency duties also stipulates fiscal reporting requirements for local associations of various sizes. Local associations faced with the possibility of bankruptcy must first consult the NAR board of directors and receive consent.
Corporate Governance in Real Estate
Corporate governance is the idea of directing an organization by laying out a certain system of regulations, processes, and practices and holding the organization accountable to them. It typically provides the framework that enables an organization to accomplish its goals. Corporate governance is usually carried out by the organization’s board of directors and is not the same thing as managing the company, which is handled by a team of business executives who may or may not sit on the board of directors.
Corporate governance in real estate works the same way, except instead of governing a company, the National Board of Realtors board of directors decides the direction of the association and governs the practices of each local association affiliated with the NAR. The NAR real estate board’s role in governance is significant because the decisions it makes can have industry-wide repercussions. This gives corporate governance and real estate boards a bit of a unique relationship.
Real Estate Boards of the Future
Real estate boards range in size and scope, but all of them have certain obligations, according to the National Association of Realtors. These obligations require boards to equip themselves with the business tools necessary to carry out their local responsibilities. Many real estate associations are joining the next generation of real estate boards by embracing digital transformation. “Digital transformation” is the idea of fully implementing digital tools into your processes and workflows, whatever that may look like for your real estate board.
Board management software is one of the best digital tools you can introduce in order to improve the organization of your real estate association. Boardable is a robust digital board management tool that bridges the divide between document management and communication in many industries, including the real estate industry.
With Boardable, real estate boards can tackle board management with ease and can help you stay organized and run meetings more effectively. Start using Boardable for free today.
