The seemingly boring subject of real estate forms has turned into a hot-button issue in the industry, where the launch of new statewide forms from the Massachusetts Association of Realtors has had some local associations crying foul over diverted revenue, while some Realtors are finding it difficult to get their hands on the new forms.
With great fanfare, MAR unveiled its latest product, MassForms, in late January. The statewide forms, officials said, were created in response to concerns expressed by the organization’s membership about inconsistencies in forms from the local Realtor associations.
Before the advent of MassForms, local associations would either work with legal counsel to come up with their own forms, purchase forms from another organization – mainly the Greater Boston Real Estate Board which has been providing forms for several years – or do both.
When MassForms first hit the street, many thought the biggest rift would be between MAR and GBREB. Until then GBREB had little or no competition in the form business, a major source of non-dues revenue for the Beacon Hill-based organization. Now, however, the clash appears to be between the state and local associations.
According to sources familiar with the controversy, MAR began an aggressive direct-marketing campaign to individual Realtors in early February trying to get them to buy the new MassForms. That move, however, angered local Realtor associations who were also offering forms of their own.
The local boards were really concerned that this was dipping into their revenue streams, a source said. Local associations felt that Realtors choosing to buy their forms directly from MAR would take away from the local boards’ revenue.
About a month after the direct-marketing campaign began, in response to the concerns brought forth by local organizations, MAR’s executive board voted Feb. 24 to discontinue its direct marketing.
Local boards have had their own forms that they have sold, said Fred Meyer, 2000 president of MAR. [Statewide forms] are a good idea in theory, but there are a lot of problems in practice. People don’t want to give up the forms they have been using, and in a way they shouldn’t.
Meyer said in an interview last week that the state association has no intention of stepping on anybody’s toes and is working to smooth out any further concerns about MassForms.
We’re not trying to market these in such a way to tell Realtors to stop using other forms, he said. We don’t want to be competitive that way. Some local boards like the state forms, some like to use other forms. They’re both valid. Now we’re trying to market [MassForms] in a way that is more sensitive.
Though the direct-marketing efforts were put on hiatus in February, tension surrounding the issue continues to remain high. A number of local association executives declined to comment on the matter when contacted last week.
I’m not touching that topic with a 10-foot pole, said one official who asked not to be named. Just keep us out of it.
‘Ambiguous’ Motion
To take action and try to calm some Realtor nerves, Meyer said he called an emergency meeting of the executive board March 24. Though sources say little was resolved in the four- to five-hour meeting, Meyer countered that the board began preparing a letter to be sent out to the MAR membership that would better explain the situation. The board will vote on a final version of that letter at its next meeting April 5.
The Massachusetts Association of Realtors will continue to market its MassForms product through the 15 local associations with which it has non-exclusive marketing agreements, and customers can buy MassForms through those associations, said Robert Nash, executive vice president of MAR. However, MAR will still take orders for its forms directly from individual Realtors as well. If the Realtor who places the direct order is a member of one of the 15 local associations, a rebate from those direct orders will be refunded to the association, Nash said.
Those concerns are unfounded, Nash said referring to local association claims that direct orders would hurt their revenue stream.
Though Meyer said the last piece of direct marketing from MAR would most likely be the explanatory letter, Nash said his association’s days of reaching out to individual Realtors may not be over.
I think the maker of the motion [to stop direct marketing of the forms] left the motion somewhat ambiguous, he said. The intent was not to eliminate all direct marketing, but to allow additional cooperation between the state and local associations. We’ll review the situation again in June.
Though Nash and Meyer both said MassForms is more a benefit to the organization’s members than a revenue source, sales have dwindled since the direct marketing was put on hold.
We continue to have sales, but it has slowed down slightly, Nash reported.
Associations that have been offering MAR forms since February have gotten favorable feedback. Our members love the disks. They’ve gotten rave reviews, said Anne C. Rendle, CEO of the Northeast Association of Realtors. The Berkshire County Board of Realtors is preparing to debut MassForms in the state’s westernmost county on Tuesday. Sandy Carroll, executive officer of the Berkshire board, said her organization has remained out of the marketing fracas of the last few months. Berkshire County is physically isolated from the rest of the state. We’ve stayed out of that big discussion, she said.
While 15 local associations have agreements to market MassForms, three of the state’s larger associations do not, which may account for the decrease in sales once direct marketing stopped. Those groups include the Cape Cod & Islands Associations of Realtors, the Greater Springfield Association of Realtors, and the Residential Association of Realtors division of the Greater Boston Real Estate Board.
Some Realtors in those organizations have complained that they are unable to obtain MassForms because of their affiliation, but Nash said those concerns, too, are unfounded. Though direct marketing has ceased, Realtors from any organization may still order MassForms directly from MAR’s Waltham offices, or may order them through any of the participating local associations.
The Cape Cod & Islands Association of Realtors has had an exclusive marketing agreement for forms since 1996 that expires in November 2001, CCIAR Executive Vice President Henry J. DiGiacomo said. At that time, We’ll consider what the best options are to meet our members’ needs, he said. We’re always open-minded, but our members’ best interest should be the determining factor.
The Greater Springfield association currently uses its own forms. Although Executive Officer Edward Moore is currently looking at entering into a marketing agreement with MAR, he said his board’s membership is satisfied with the current forms.
We have not seen the demand for MAR forms, he said. And some members of the Hampden County Bar Association have seen the forms and given them a less-than-favorable rating.
Edwin J. Shanahan, CEO of the Greater Boston Real Estate Board, said his organization has no plans to carry a competitor’s product. The mission of the Greater Boston Real Estate Board, and all associations for that matter, should be to provide goods and services to protect their members to the maximum level allowable by law. [The MAR forms] do not protect to the maximum level allowable by law, he said.
Regardless, Nash said he plans to pursue marketing agreements with both Springfield and GBREB, and will approach the Cape & Islands association when its current contract runs out.
I always knew [the forms] would be controversial, Meyer said. It’s inherent when people belong to three different entities – the national, state and local associations – that there are going to be misunderstandings between them.
These misunderstandings need to be clarified. That’s my job, and I’m going to do it, Meyer continued. We’re not trying to ram [MassForms] down the throats of people who don’t want it … In fact, I continue to use the Boston board’s forms because they’re well accepted in the marketplace.
