Clever acronym aside, AREA is not a place but rather a newly created entity to the real estate industry. It stands for “American Real Estate Association” and its ambition is to offer real estate agents a professional trade organization alternative to NAR (National Association of Realtors®). Officially launched in January 2024 at Inman Connect, AREA offers a choice to brokerages and agents concerned by current legal challenges taking place in the NAR organization. Following is the skinny on who is AREA and what should you know about it:
MEET THE AMERICAN REAL ESTATE ASSOCIATION
AREA is the collaborative brainchild of Mauricio Umansky, founder of the The Agency, and Compass agent and NAR Accountability Project Founder, Jason Haber. One of AREA’s most ambitious goals is to spearhead the development of a national MLS database, coined as “NLS”. As it stands, one must be a licensed agent to gain access to the MLS system. In addition, most brokerages mandate that their agents join NAR. As such, most agents don’t typically gain access to MLS unless they have membership with NAR. NAR is one of the largest professional organizations in America. It collects hundreds of millions of dollars in annual dues from its 1.5 million members. It also owns the trademark to the word “Realtor®.” With NAR membership comes the expectation that certain traditional trade practices–such as the practice of having sellers pay buyers’ agents a commission–will be followed. This “participation rule” has recently led to class-action commission lawsuits by home sellers. Thus far the class-action suits, the first of which originated in Missouri, are gaining momentum in other states.
AREA allows agents to set their own commission rates and doesn’t require cooperation between buyer and seller agents. Founder Mauricio Umansky claims that AREA will be “an association built by agents for agents.” He insists that AREA is not trying to replace NAR. Rather, AREA offers a choice as an updated model. Its goal is to guide agents with the industry’s ever evolving issues.
AREA’S MISSION & THE NLS
AREA’s goal is to focus on three things:
- ADVOCACY: Advocacy and lobbying at the regional level rather than the federal level.
- NATIONAL LISTING SERVICE: Streamlining the Multiple Listing Service by creating a National Listing Service. This would combine hundreds of MLS groups to create the first-ever National MLS system (NLS). Currently agents must maintain membership in other MLS systems to access national listing information. The NLS system proposed by AREA will help agents who work in cross-over areas.This gets unwieldy and expensive. By comparison, NLS.com will offer a centralized database with access to listings across the country.
- EDUCATION: Education for real estate agents that offers “exciting and valuable conferences.” These would address the problems agents face working in today’s real estate environment.
THE STRUCTURE OF AREA
In order to actively lobby, AREA has been created as a non-profit agency. However, its National Listing Service entity (NLS) will be for-profit in order to develop cutting-edge technology for the real estate industry. AREA is still laying the groundwork for how this would function and its goal is to work with local MLS associations currently in place. The details as to whether the NLS will be attached to AREA or be a separate entity are still being worked out.
The hard launch for AREA is tentatively set for the end of May and its founders are currently filing a 501(C)(6) so it can operate. In addition they are filing a trademark and campaigning for seed money to realize its ambitious objectives. AREA is currently privately funded but hopes to raise $50-$100 million through investors. AREA claims that it won’t charge dues for another 6 months. After that, dues are expected to be in the neighborhood of $400-$500 a year (about half of what agents pay NAR and state and local Realtor® organizations.) Possible headquarters for AREA are expected to be Florida or Texas, with a tagline of “Trade Up.” AREA currently has 3500 sign-ups with “lots of interest.” AREA encourages curious agents to submit ideas and questions to americanrea.org, and will use this information to reach out and create polls.