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The National Association of Realtors (NAR) is considering a proposal that would tie its annual membership dues to the Consumer Price Index (CPI), a measure of inflation.
This move comes in response to a predicted decline in membership and an anticipated budget deficit in the coming years. Here's what real estate agents need to know about the potential changes.
Membership Decline and Budget Deficit
NAR ended 2022 with a record high membership of 1,580,971 members. However, according to NAR's Chief Economist Dr. Lawrence Yun, membership is expected to decline by an estimated 15% over the next couple of years. This would result in an estimated $10-$15 million budget deficit beginning in 2024. The trade organization projects membership counts of 1,500,000 in 2023 and 1,380,000 in 2024.
Proposed Changes to Annual Dues
To address the anticipated budget shortfall, NAR's Finance Committee is proposing that annual membership dues be indexed to the annual increase in the comprehensive overall CPI. This change would mean that members' annual dues would likely rise every year, starting in 2024. However, NAR Treasurer Greg Hrabcak has assured that the rise would never exceed 4%, rounded to the nearest whole dollar.
If the proposal is approved, annual dues for 2024 would be $156, a 4% increase from the current dues of $150. The special assessment for NAR's consumer ad campaign would remain at $45.
Efforts to Offset Budget Deficit
Apart from the proposed changes to annual dues, NAR is also working on ways to reduce expenses and increase non-dues revenue. The budget proposal for 2024 accounts for 20% of total revenue and nearly 30% of operating revenue coming from non-dues sources. Specific details on these efforts have not yet been provided.
The proposed increase to NAR dues aims to address the anticipated budget deficit due to a decline in membership numbers. Real estate agents should be aware of the potential changes to annual dues and the impact it may have on their budget. The NAR board of directors will meet this week to vote on the proposal. If approved, members can expect an increase in dues starting in 2024, tied to the annual increase in the comprehensive overall CPI, capped at 4%.
Do you think REALTOR dues should be increased? Let us know in the comments below or share with a colleague in an upcoming CE Class!
References
Brambila, Andrea V. "NAR Membership Dues Would Rise with Inflation Under New Proposal." Inman, 8 May 2023. Accessed 8 May 2023.
Han, Brooklee. "NAR Proposes Indexing Membership Dues with Inflation." RealTrends, 7 May 2023. Accessed 8 May 2023.
Bad idea! Maybe membership is dropping because too many members simply can't afford the ever increasing dues (which are not optional). Drop the ad budget assessment - does little to nothing for the agents. Enough is enough for dues.. up to 4% increase every year? When does it stop? You're just going to have more agents giving up.
Cut back NAR. Don't implement bad management decisions onto your members. Members are caught in a monopoly. If the MLS requires us to be members, it is forced upon us. If the MLS does not require it, if the Real Estate Brokerage Principle Member wishes to join, then it is forced upon all of his/her agents. This is not a voluntary membership.
Bad idea! How about cutting back like your members have to do in these changing market conditions! Maybe membership is declining because real estate licensees no longer see tangible benefits to membership!
Stop the ad budget assessment! The money wasted on the ads I've seen do nothing to promote NAR membership! Hire some marketing folks that have actually been in the real estate business!
My opinion and I've been a REALTOR® since 1981.