According to various sources there are big difference between the real estate head count of the National Association of Realtors and other credible sources. Recently, RIS media stated total agents to be 291,000, Taro Systems stated 329,000 and NAR claims a whopping 1.1 million. A spread of over 700,000 real estate agents. There could be several motivates why NAR inflates their numbers and several Theories.

Theory 1: NAR has long been the power to thwart off the IRS claim to exempt the Real Estate Agent as an independent contractor and not subject to employer withholding taxes. NAR has been the power behind the lobbying to have a special tax provision for the real estate agent in the IRS tax code. If it was not for this specific exemption, the Real Estate Company would be required to collect withholding taxes. Would the IRS maintain this exemption if NAR agent head count were significantly lower?

Theory 2: In most sales organizations, the rule of thumb is 80% of the business is done by only 20% of the sales agents. This rule has long been accepted in the individual real estate office. That being said, if you take 20% of 1.1 million that equates to only 240,000 agents; certainly a far cry from NAR's claim of 1.1 million agents. So is NAR counting agents that do little or no business or business to an occasional family member to receive commission discounts?

Theory 3: NAR is about power and greed. High numbers bring credibility but often disconnected from the real world. NAR long fought to control the transaction between the buyer and seller. This practice held true until the internet let the cat out of the bag (control of homes for sale information). Through the internet the consumer can get free information from ViewMyListing.com, Realtor.com, Trulia.com, Zillow.com, Century21.com, Coldwellbanker.com, Remax.com and all 850 individual Board of Realtors. Let's face it, NAR has long lost the battle of control of the information, but still have not recognized it yet.

Theory 4: Most Sellers that employed the use a Real estate agent have many things in common. How little we actually saw our agent and when inquiring on the status, only to be told they were working on it. I know there is a vast amount of labor that goes into selling a home but the agents all to often fail to communication their activity. So sellers assume that their agent is lazy and only in it for the commission. Large agent head count can make one think that a single bad experience was an exception and assume with the other 1,099,999 agents they don't have the same problem of lack of communication. Again deception by large numbers!.

Theory 5: A substantial revenue stream to NAR is affiliate memberships, sponsored partnerships and National Trade Show conference revenue. Inflating Head counts misleads advertisers to believe in a higher return on investment and therefore spend more dollars in advertising, booth space and all the ala carte marketing material required from a single source. Is this much different from Bernard Madoff pozie scheme? In either case both are very misleading to all.

So what theories support NAR's motive. How about all five! If NAR maintains such a strict code of ethics, then why did they not rat out the irresponsible lending, appraisal and mortgage practices that has sent this country into turmoil.

Douglas Lee
CEO, Taro System, Inc.
Grand Rapids MI
www.taronetwork.com