Our Merger: How It All Started

Three Texas associations merge to keep regional identity.

Over the course of 20 years, our three associations—New Braunfels/Canyon Lake association (650 members), San Marcos Area board (325 members), and Seguin board (135 members)—talked a lot about merging. We started a regional MLS system in 2000 and collaborated on classes and luncheons occasionally. Our three main Texas communities are only 20 to 30 minutes from one another and many of our members have worked together. Our housing markets are strong and there is a lot
of new development.

The conversation about merging never went anywhere until July 2013, when the presidents of each association met with the idea of merging. They were the initial driving force of the merger.

At one time, our markets were distinct; they were a college community, a rural community, and a tourist community, but rapid development blurred the lines. Our three associations are sandwiched between two large markets, Austin and San Antonio, and although we didn’t live in fear that our associations would be gobbled up by our neighbors, our leadership knew the importance of preserving our identity as one of the fastest-growing areas in the country. We also wanted added benefits for our members while still keeping a local voice. It was the right time, and we had the right leaders in place. Their strength and dedication to success for all propelled the merger forward.

The merger process was successful for us because we had equal say. We all followed the same process from start to finish. Our merger committee was composed of equal representation: eight from each association and the AE. After many meetings, our merger agreement was drafted. Then it was time for the membership vote. Each association had more than 40 percent participation in this vote, and more than 95 percent of the voting members approved the merger, which was authorized and finalized by the National Associa­tion of REALTORS® on Dec. 23, five months after talks started and only a month and a half after our first merger committee meeting.
Our new name, reflecting our distinct area, is pending approval from NAR.

Tear It Down to Build It Up

A merger requires a lot of rebuilding. Even though you may have two or three associations that are already formed and running, it does not mean that you will have all you need for the newly merged association. Piecing together components from each association is helpful but doesn’t give you the end product immediately. Your board of directors and staff need to be accepting of this and allow time for development of new policies, procedures, and structures. NAR has some great tools to help associations through hiring the new AE, structuring governing documents, and creating policies. We took advantage of these and received financial assistance from NAR’s Unify program to hire Jerry Matthews as our merger consultant. Jerry helped us form our merger committee, walked us through NAR’s process, and offered guidance on everything within our merger agreement. Consultants are very helpful, but do not expect them to have all the answers. You need to know your local agents, markets, and structures. Each organization is different, and your newly merged one is no exception.

If we learned one thing from the process, it is that merging three companies into one is extremely hard. Unless you have a seasoned CPA on staff, please do not try to go this alone. I wish we had hired a CPA firm to work with us on building our new accounting system because each association had a different method.

Besides consulting an attorney to receive his or her blessing on your new governing documents, it is also very important to ask what your state requires for a merger. In Texas, we were required to fill out paperwork, send the attorneys our merger agreement, and provide a very detailed account of each vote taken.

From merging our NRDS databases and reconfiguring our association management system to storing tons of membership data from the dissolved associations and renegotiating contracts with vendors, there’s a lot to be done.

Communication with members is very important throughout the process. We took all three membership spreadsheets and put them in the Constant Contact e-mail management system. It wasn’t perfect, but it allowed us to start communicating with our much-larger membership database immediately.

Everything All at Once

We’ve compared going through a merger and simultaneously running an association with having two full-time jobs running in parallel. We are thrilled that the behind-the-scenes challenges were not evident to our members; however, they are aware of increased member benefits with no break in services.
If your association is looking into a merger, it’s important for everyone to have realistic expectations. No, things won’t work as seamlessly as you want. Yes, things will fall through the cracks. The bottom line is the benefit to the member. Don’t be afraid of the merger. We’ve run into our fair share of speed bumps. But when members ask us about the merger, we affirm that it was best for them—that’s what we’re really all here for.

Note: The San Marcos Area Board of REALTORS® now represents more than 1,150 members from five counties between Austin and San Antonio. It is currently going through its second application to change its name. Amy DuBose (amy@smabor.com) is the association executive of the newly merged board. Regina Tubré, former AE from New Braunfels/Canyon Lake, is director of finance and operations; and Laura Harm, former AE from Seguin, is director of education and programs.