Illinois REALTOR® January 2019 by Illinois REALTORS®

THE VOICE FOR REAL ESTATE IN ILLINOIS

JANUARY 2019

STOP THE

SQUEEZE OF

RENT CONTROL Why bad policy won't fix housing affordability

5 OF YOUR TOP LEGAL QUESTIONS

WHO WE ARE

RESEARCH SHOWS WHAT WE MAKE, HOW MUCH WE SELL www.IllinoisRealtors.org

THE OFFICIAL PUBLICATION OF ILLINOIS REALTORSÂ®

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CONTENTS

JANUARY 2019

STOP THE

SQUEEZE OF

RENT CONTROL p11

Departments

ILLINOIS REALTORS®

Advocacy • Education • Ethics • Legal • Outreach

4 What’s Online 5 Leadership Message: Fighting rent control

Features

6 Quick Takes: The case for more open space; Meet the new Illinois REALTORS® Executive Vice President

11 Stop the squeeze of rent control 14 Illinois REALTORS® plays key role in building Ghana’s real estate industry

7 Who we are: Infographic shows what we make, how much we sell

18 Automate and save time

8 Legal Update: Agency, license act scope and more top legal questions

20 YPN tips to boost your business

26 At the Capitol: New laws affecting real estate

22 Commercial outlook: Retelling the retail story

29 RVOICE: Home Rule defeated in five communities

25 LaFargue and Persin are ‘Good Neighbors’ to their communities

30 Market Watch 31 REALTOR® Community

ILLINOIS REALTOR® January 2019

WHAT'S ONLINE REALTORS® AND CONSERVATION

ILLINOIS REALTORS® THE VOICE FOR REAL ESTATE IN ILLINOIS 2019 OFFICERS President-Elect Ed Neaves eneaves@thesnydercompanies.com Treasurer Sue Miller, ABR, BPOR, CRB, CRS, GRI, ePro, PMN, SFR, SRS smiller001@aol.com Immediate Past President Matt Difanis, ABR, CIPS, GRI matt@mattdifanis.com Chief Executive Officer Gary Clayton, CAE, RCE Executive Vice President Kristen Butcher, CMP Vice President, Communications Jon Broadbooks

Illinois REALTORS® is partnering with members of the Prairie State Conservation Coalition to educate Illinois residents about the advantages of preserving and enhancing natural spaces. To help foster that mission, the Illinois REALTORS®’ website now features a conservation section with resources and

news that you can use and share. Spread the eco-friendly message by connecting with conservation foundations in your area. You will find an interactive map that shows Illinois REALTORS® local associations and the conservation foundations that serve their communities. www.IllinoisRealtors.org/conservation

MARK YOUR 2019 CALENDARS The Illinois REALTORS® schedule of events for 2019 is now available on the website. Plan on attending Capitol Conference, the Illinois REALTORS® Conference & Expo and more this year.

Content Marketing Specialist Bill Kozar Graphic Designer David Hine For advertising information contact Advertising & Sponsorship, 217-529-2600, info@IllinoisRealtors.org The ILLINOIS REALTOR® (ISSN 0744-221) is published four times a year during the months of January, April, July, and October by the Illinois REALTORS®, Post Office Box 19451, Springfield, Illinois 62794-9451. Periodical postage paid at Springfield, Illinois and at additional mailing offices. Postmaster : Send address changes to: The ILLINOIS REALTOR®, Post Office Box 19451, Springfield, Illinois 62794-9451, 217-529-2600. Opinions expressed in any signed ar ticles of the ILLINOIS REALTOR ® are those of the author and do not necessarily represent the opinions of the Illinois R EALTORS ®. Adver tising of product or services does not imply endorsement. Advertising rates are available at www.IllinoisRealtors.org or on request. Annual dues of every REALTOR®, REALTORASSOCIATE®, and Affiliate member include $3 for a oneyear subscription to the ILLINOIS REALTOR®.

www.IllinoisRealtors.org/event

FREE FORMS, CONTRACTS AND MANUALS FOR MEMBERS As an Illinois REALTOR®, you have access to a variety of legal forms, contracts and manuals that can help you in your business from property disclosure and agency issues to brokerage agreements. www.IllinoisRealtors.org/legal/forms

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Senior Editor Stephanie Sievers

Like us on Facebook. Join us on LinkedIn. Follow @ILREALTOR on Twitter. Follow @IllinoisRealtors on Instagram. Subscribe to www.youtube.com/IllinoisRealtor

LEADERSHIP MESSAGE Ed Neaves | 2019 President-elect

FIGHT ON RENT CONTROL SHAPING UP FOR 2019 January brings new plans for a new year. The month also brings what is shaping up to be one of the most significant private property rights challenges Illinois REALTORS® has faced in many years in the form of rent control. For the past two election cycles, some Chicago residents have had the opportunity to vote on referenda which ask if they favor restrictions on rents charged by property owners. These measures are non-binding in nature, but high voter support shows frustration with the cost of living in the city. Illinois REALTORS® was instrumental in pushing for a law in the mid-1990s which essentially banned rent control. Then, as now, we saw rent control as a means to undermine private property rights and hurt housing availability. We fully expect that there will be efforts to repeal this longstanding and sensible law in the 2019 legislative session, and for months the association has been aggressively working to make sure lawmakers know what’s at state for the real estate industry and those who rely on it. The unintended consequences of rent control are many. For Illinois residents, adopting this policy would likely reduce available affordable housing, especially at a time when rents are declining. Investors, who form an economic backbone in the housing economy, would

Rent control could have the unintended consequences of stifling real estate investment, driving down property values and reducing available affordable housing. PHOTO BY BIGSTOCKPHOTO.COM

shun buying property in areas with rent control because they could not get a return on their investments. If they stuck with their investments, they would face the prospect of not having the funds necessary to make needed improvements or updates. For policymakers, the decrease in rental property values could wreck state and municipal budgets. This would result in a property tax revenue shortfall at a time when elected officials in the state are struggling to close budget gaps. Illinois REALTORS® is fully

committed to protecting private property rights. In this edition of the magazine, you’ll learn more about why rent control would be bad for Illinois, and why our members must get involved. This isn’t a battle of a few against the forces of many. As Illinois REALTORS® has proven repeatedly, our 50,000 members always get engaged on issues that affect the industry and those who rely on it. Make sure you know the facts about rent control, and help us protect private property rights.

ILLINOIS REALTOR® January 2019

QUICK TAKES MAKING THE CASE FOR MORE OPEN SPACE

Creating well-planned, accessible urban open spaces doesn’t just benefit communities; they also boost the bottom line for developers, according to a new study by the Urban Land Institute. The study, “The Case for Open Space: Why the Real Estate Industry Should Invest in Parks and Open Spaces,” looks at the ways private developers benefit from supporting open public space including: u Improving community health and wellness and boosting economic development u Providing communities with accessible parks enhances long-term real estate value u Supporting community programming in open spaces encourages social interaction and increases the value and marketability of neighborhoods u Creating or funding urban open spaces and parks builds community buy-in and public sector support for developers

The 155 North Wacker Pocket Park in Chicago is an example of a private sector-supported open space.

ILLINOIS REALTORS® NAMES EXECUTIVE VICE PRESIDENT

LGBT HOMEOWNERSHIP RATE IS BELOW NATIONAL AVERAGE Only 49 percent of the LGBT community are homeowners compared to the 64 percent homeownership rate of the overall population, according to a survey by Freddie Mac. Homeownership is still a goal and 72 percent of LGBT renters want to own a home someday. What are the top considerations when buying? Home price, safety and an LGBT-friendly neighborhood.

bit.ly/LGBT_HomeOwnership

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bit.ly/CaseForOpenSpace

Twenty-six percent of REALTORS® are members of a real estate team and the typical team is made up of four people. Source: National Association of REALTORS® 2018 Teams Survey

Kristen Butcher becomes executive vice president of Illinois REALTORS® effective Jan. 1, 2019. Butcher, who joined the association in 2013, will become the number two executive at Illinois REALTORS®. She had been vice president of professional development, a role which placed her in charge of the association’s education programs and events. She has a bachelor’s of science degree in Recreation, Park and Tourism Administration from Western Illinois University and holds the Certified Meeting Planner (CMP) designation.

The typical Illinois REALTOR® is... The typical Illinois REALTOR® is a

Every year Illinois REALTOR® takes part in the NAR survey to get information on members and how they are navigating business.

54-year-old woman

had a transaction involving a foreclosure and 25% handled a short sale.

who owns a home and has

12 years of experience in real estate.

67%

say real estate is their ONLY occupation.

35%

Median gross income is $36,670 but REALTORS® with 16 or more years of experience earned a gross median income of

of REALTORS®' business comes from repeat customers and referrals

$66,300

REALTORS® are using social media for business

69% ARE USING

ARE USING

The typical Illinois REALTOR® had

work for a firm that was bought or merged in the past two years.

12 transactions/year and a typical sales volume of

$2.3 million

87% are independent contractors with a median tenure of 6 years at their firms.

Spent an average of

$1,320/year

on vehicle expenses

their largest single expense category. Find the full 2018 Illinois REALTORS® Member Profile at: www.IllinoisRealtors.org/memberprofile

ILLINOIS REALTOR® January 2019

LEGAL UPDATE Elizabeth A. (Betsy) Urbance | General Counsel and Vice President of Legal Services

TOP 5 LEGAL HOTLINE TOPICS FROM 2018 By early November, the Illinois REALTOR® Legal Hotline had handled 2,617 calls or emails in 2018 (or an average of 262 a month). So, what were the top legal questions members were asking about? Agency, the scope of the Illinois Real Estate License Act, contracts to purchase, business practices under the license act and advertising rounded out the top five categories. This article examines those top categories and offers some sample scenarios and answers to your frequent legal questions.

The “roadshow” features in-house legal counsel Betsy Urbance and Jeff Baker, direct from your location where they will cover the latest license law issues affecting your Illinois real estate business, hot topics from the Legal Hotline and of course answers to your questions. The program is 90 minutes long. In order to schedule, there must be at least 100 attendees expected.

Call 217-529-2600 to schedule the “roadshow” for your group.

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AGENCY

Review of Disclosed Dual Agency Disclosure and Consent Process

Disclosed dual agency is allowed under the Illinois Real Estate License Act (the Act). It is very important to know the disclosed dual agent is limiting her role in the real estate transaction. The disclosed dual agent will become more a messenger and less a counselor to the clients, who are on opposite sides of the transaction. The key concept for the dual agent to abide by is maintaining the confidentiality of the opposing parties. Here is a quick review of disclosure and consent requirements when acting as a dual agent: Step 1 for making the proper disclosure and obtaining informed consent is to disclose to each client (likely at separate times), the potential for dual agency to occur. • The seller might consent to the potential for dual agency within the exclusive listing agreement. The dual agency section of the listing agreement will contain the required language setting forth the do’s and don’ts of the disclosed dual agent. This could be referred to as the “long form” that is the first step in the process. There is a presumption of informed consent when using the language set forth in Section 15-45(a) of the Act. • The buyer might consent to the potential for dual agency either within a buyer brokerage agreement, or if no brokerage agreement is being signed, by signing a standalone “long form.” The buyer needs to sign no later than when the dual agent acts as such. This might occur right before the listing agent shows the buyer her own listing.

Step 2 for completing the required dual agency disclosure is when both clients sign the confirmation of consent to dual agency no later than when a contract is entered. See Section 15-45(c) of the Act. Note: These provisions apply to sales and/or lease transactions which are either residential or commercial. For more on agency, see the Consumer’s Guide to Real Estate Agency in Illinois (logon required) www. IllinoisRealtors.org/legal/forms.

ILLINOIS REAL ESTATE LICENSE ACT – SCOPE

The Act Requirement that Licensees be Sponsored by Only One Sponsoring Broker at Any One Time (Section 10-20(a)) The Illinois REALTORS® Legal Hotline receives many calls asking whether a licensee can legally work for one sponsoring brokerage company to do sales, while also working with an entirely separate sponsoring brokerage company to focus on property management. Under the Act, the answer to this question is NO, the licensee must choose one company or the other for which to work. Leasing properties owned by others for compensation is a licensed activity under the Act’s definition of Broker. As a result, the limit placed on licensees requiring them to work for only one sponsoring broker at any one time applies on these facts. The licensee who wants to do both sales and leasing brokerage will need to find a sponsoring company that engages in both types of brokerage. Some companies have separate divisions that operate under the same corporate umbrella. If this is the case, there is only one sponsoring broker, so the

licensee who works for that one company would be compliant with the Act.

CONTRACTS TO PURCHASE

Amendments to REALTOR® Code of Ethics and Multiple Listing Service (MLS) Policy Requiring Affirmation or Notification to Cooperating Brokers in Contract Negotiations In response to cooperating brokers’ seemingly constant frustration at a lack of communication from the seller’s broker in contract negotiations regarding whether their offers are being presented in a timely manner, NAR recently adopted an amendment to the REALTOR® Code of Ethics Standards of Practice; and approved an accompanying MLS Policy Statement addressing this concern. Specifically, under Article 1 of the Code of Ethics, Standard of Practice (SOP) 1-7, NAR, discussing the presentation of offers, amended the language to become effective Jan. 1, 2019, as follows: Upon the written request of a cooperating broker who submits an offer to the listing broker, the listing broker shall provide a written affirmation to the cooperating broker stating that the offer has been submitted to the seller/landlord, or a written notification that the seller/ landlord has waived the obligation to have the offer presented. Similarly, the NAR MLS Policy Committee adopted amendatory language to its MLS Policy Statement 7.73, Rights of Cooperating Broker in the Presentation of Offers, that is consistent with the new SOP 1-7: Where a cooperating broker is not present during the presentation of their offer, he or she can request that the listing broker provide them a written affirmation stating that the

offer has been submitted to the seller, or a written notification that the seller has waived the obligation to have the offer presented. This language is mandatory for REALTOR®-related MLSs.

ILLINOIS REAL ESTATE LICENSE ACT – BUSINESS PRACTICES

Recordkeeping Requirements for Offices A managing broker for an office wants to do some “house cleaning” and wonders how long he must keep old files. This is a good question and one on which the managing broker should consult with the company attorney and accountant. In addition, he should review Section 1450.755 in the administrative rules under the Act. This rule discusses what records must be kept for the Illinois Department of Financial and Professional Regulation (IDFPR). For IDFPR actions, the time for keeping records is five years. He also should consider different time limits that might apply in different situations. Some very broad time limits that might apply besides the five-year limit on administrative actions through

IDFPR, would be three to seven years for matters involving the Internal Revenue Service (IRS) and 10 years for actions on written contracts. There are some records in the office that need to be kept forever, such as articles of incorporation and company bylaws. These are some very general guidelines and examples. Managing brokers should consult their own experts when making file retention and destruction decisions for their business. They might also review the Illinois REALTORS®’ Sample Office Policy Manual which contains a sample document retention/destruction schedule. Note: This Q&A covers document retention and does not focus on privacy issues and the destruction of private data a company might touch. For more on this subject, start here bit.ly/NAR_DigitalSecurity.

ADVERTISING

Teams and Advertising

Illinois REALTORS®’ Legal Team helped create an animated video for a quick look at the legal requirements for advertising in the context of a real estate brokerage team. See the sidebar below for more on these new legal videos.

STAY UP-TO-DATE WITH LEGAL BRIEFS VIDEOS

Illinois REALTORS® Legal Services team makes it easier than ever for you to learn about the hot legal topics affecting your real estate business with the Legal Briefs video series. Check out the first three episodes and watch for more in 2019. www.IllinoisRealtors.org/legal/ legal-videos-podcasts/

ILLINOIS REALTOR® January 2019

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THE RENT CONTROL THREAT IS REAL REALTORS® are fighting to keep rent control from squeezing property values By Greg St. Aubin | Senior Vice President, Governmental Affairs

here is a serious effort under way to pass legislation in Illinois that would repeal the Rent Control Preemption Act, which prohibits local governments from enacting any form of rent control. The repeal of that law would enable home rule cities, such as Chicago, to enact rent control ordinances. There is also a bill under consideration which would impose a statewide rent control program. Six regional rent control boards (dominated by tenants and tenant advocacy groups) would set a “Rent Stabilization Rate” for every county (or in some cases, city) in the board’s area. Landlords could not increase rents above the “Stabilization Rate” (which would be tied to a consumer benchmark like the Consumer Price Index). Illinois REALTORS® is strongly opposed to any form of rent control – hence our lead role in the passage of the Rent Control Preemption Act in 1997. Hearings were held on this legislation this past summer and fall, but no legislative action has been taken to date on these bills in either chamber. We anticipate this legislation will be reintroduced when the new General Assembly convenes in January. WHO WANTS RENT CONTROL, AND WHY? This issue is primarily coming from tenant advocacy groups and community organizations in the Chicago metro region. Not surprisingly, the bills that have been introduced are sponsored by legislators from the area.

ILLINOIS REALTOR® January 2019

Of course, large urban areas such as Chicago, and in fact ALL communities, frequently wrestle with the challenge of providing an adequate supply of “affordable” housing, and REALTORS® are constructive participants in these issues, whether at the local, state or federal level. But rent control is the last thing that should be implemented as housing policy in Illinois. The tenant and community groups say that redevelopment and new development (some call it “gentrification”) in various areas is increasing significantly, resulting in the displacement of long-term, current tenants. In short, they see rent control as an “easy fix.” You think your rent is too high? OK, we’ll just pass a law capping it. Problem solved, right? Well, of course not.

REALTORS® are taking action! THE SPECIFICS OF WHY THE REALTORS® OPPOSE RENT CONTROL

Here are just a few of the reasons why REALTORS®, many other groups and most economists argue that rent control would be destructive not only to the rental and overall housing market, but to the growth of our economy in general:

1 Rent control would threaten

the quality of the rental housing stock. Income to the property would be capped, but maintenance and improvement costs are constantly increasing. This would diminish the funds available for building/unit maintenance and improvement.

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2 Do the math: it doesn’t work. 4 Rent control would drive By capping the amount that a rental property business can increase its income while its expenses rise faster (e.g., property taxes, utilities, building maintenance, capital improvements, other taxes, regulatory fees, required upgrades, etc.), operating a rental property will no longer be an attractive or viable business or investment. As a result, rent control would: • Reduce the supply of affordable rental housing. Some landlords would simply go out of business, or sell and buy elsewhere; • Chicago or any other community that imposes rent control would be less attractive to investors and developers, who would opt for investing in noncontrolled areas or communities; • Many rental property holders will choose to convert their properties to condominiums, further reducing the rental housing supply.

3 Rent control would be

an expensive, inefficient regulatory bureaucracy that will chase good property owners out of the rental housing business. History has shown that people “game” the system. In rent controlled areas, underground markets emerge where people sublet their rent-controlled unit for higher than the controlled rate, but below market rate. In other cities that have rent control, a significant number of those living in controlled units are highincome individuals.

down the value of rental properties, which in many areas including Chicago, pay a significant portion of the property tax base. This will result in higher property taxes for everyone else.

5 Imposing rent control

assumes that overall, rental housing in Illinois and specifically Chicago is not affordable in a very broad sense. The data shows that is not the case. Compared to other large urban cities, Chicago rental housing is relatively affordable. In fact, rents in Chicago have been decreasing due to an abundance of supply. If there are targeted areas or populations that need more housing or housing assistance, that should be the focus – not the imposition of universal rent control across the market.

6 Stifling the housing sector and chasing away new investment and developers will forestall the creation of critically needed housing and economic development in areas that need it the most. We should be doing the opposite.

Rent control would be destructive not only to the rental and overall housing market, but to the growth of our economy in general.

2 Fix the harm that exists:

REALTORS® URGE A MORE POSITIVE, HOLISTIC APPROACH

• Streamline or eliminate bureaucratic processes, overly-restrictive zoning and building codes, state laws and local ordinances that greatly increase the cost of operating or developing housing;

At recent hearings on the issue, Illinois REALTORS® urged legislators not to go down the dark and destructive road of rent control, which would stifle new development and investment, and drive landlords out of the business. Instead, REALTORS® pledged to work with state and local policymakers and urged them to take a more positive, innovative, forward looking, prodevelopment approach that would keep the existing market healthy and spur new affordable housing development. REALTORS® shared several examples of current state and local policies and ordinances that make housing more expensive and called for a discussion on how these issues can be addressed, including:

3 Adopt an approach going

forward that encourages and attracts growth and innovation: • Adopt a pro-active, prodevelopment approach to housing issues that listens to current providers and attracts new investors; • Fully use and create new incentives to encourage housing rehab or new development, especially in targeted areas. There are numerous such programs, and more are needed;

1 Do no further harm:

• Don’t enact rent control as the “solution,” while leaving all the other regulatory barriers and burdens in place. That will only exacerbate the problem;

• REALTORS® continue to be ready to provide constructive input and expertise in developing new and improved processes and innovative solutions to housing needs.

• Recognize the impact on housing affordability when considering new state laws and local ordinances that either directly impose costs on housing providers and developers or increase the cost of housing development. REALTORS® at the local level constantly point out the direct or regulatory costs local and state laws have on housing and those concerns are often dismissed.

We expect to face a tough fight on the issue of rent control this spring. But we have a strong position, the facts are with us and state legislators listen to us. With your help, involvement and expertise – and the association’s advocacy resources at our disposal – Illinois REALTORS® can and will prevail on this issue.

For more on rent control, visit Real Property Alliance, the Illinois REALTORS®' consumer outreach arm. www.RealPropertyAlliance.org/rent-control

ADVOCACY PLAN IN OPPOSITION TO RENT CONTROL

Illinois REALTORS® will use all of our advocacy tools and resources to take rent control off the table in Illinois or help to defeat any rent control legislation that is considered. Aside from an ongoing and intense direct lobbying campaign to legislators by our statehouse lobbyists, supplemented by our local GADs, other resources and tools will include: q Public opinion polling to test messaging for advocacy outreach; Use of various advocacy methods to reach different segments of consumers and property owners; q Dedicated “stop rent control” website for consumers to learn more about rent control, and how to take action; q Ongoing Calls for Action to members to contact their legislators; q Coordinated, in-district State Legislative Contacts, GAD and member meetings with legislators; q Outreach efforts to non-REALTOR® landlord groups to broaden landlord engagement in this issue. NOTE: Portions of this article ran in the November issue of DR Legal News

ILLINOIS REALTOR® January 2019

ILLINOIS REALTORS

PLAY KEY ROLES IN BUILDING GHANA'S REAL ESTATE INDUSTRY By Bill Kozar | Content Marketing Specialist

Vicky Sampah prepared Maurice Hampton for teaching in Ghana.

What is GREPA?

GREPA stands for the Ghana Real Estate Professionals Association. The organization was founded to promote professional standards, ethical behavior, continuing education and shared information in real estate through local and international networking. Find out more about GREPA and its connection to REALTORS® at www.repagh.org/member-services/international-realtor-membership.

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pair of Illinois REALTORS® provided top-level training to Ghanaian real estate professionals, part of a years’ long outreach designed to boost professionalism and standards of practice in the country. Plainfield REALTOR® Vicky Sampah, herself from Ghana, began work with real estate agents and government officials in the country nearly a decade ago. It's a partnership that has yielded cross-cultural collaboration and prompted discussions about how to enhance standards in Ghana's real estate industry. Chicago REALTOR® Maurice Hampton agreed at the last minute to teach the first Accredited Buyers’ Representative course in Accra, the country’s capital, in October. It didn’t hurt that he’d developed a personal interest in the West African country. “About three or four years ago, I took an Ancestry DNA test and found I have roots in Ghana,” said Hampton. “I became fascinated with the history of the country, the neighboring country of Ivory Coast and the slave trade.” Their efforts come as the country wrestles with a severe housing shortage. In part because of Sampah’s efforts, the country now has a real estate organization modeled after the National Association of REALTORS® (NAR). It is called the Ghana Real Estate Professionals Association (GREPA). “Ghana has a housing gap of about 2 million,” Hampton said. “There is a lot of opportunity there. But anyone can sell property there, so it is important to work with a REALTOR® who can perform due diligence and find out if someone has the right to sell the property they claim to own. All private property is recorded with the land administration.” RECOGNIZING UNIQUE CHALLENGES Sampah and Hampton have been serving the real estate needs of international clients for years,

and both have been part of the Illinois REALTORS® Global Business Council (GBC) and the Illinois REALTORS® Consulate General Liaison Program. Sampah, owner of Abri Group, LLC, was the 2018 GBC chair and Hampton, coowner of Centered International Realty, is the 2019 GBC chair. Hampton is also chair for the NAR Global Business Councils Forum. Sampah began planning the fourday Ghana Real Estate Education Series months ago. She worked with colleagues at NAR and colleagues in Ghana to determine the best real estate courses, find a convenient location and arrange technical and logistical details. She planned to be the main instructor for the ABR and e-Pro classes. As the date for the training neared, family medical challenges prevented Sampah from leading the classes. She thought of Hampton, who’d once told her he would love to teach in Ghana. Fortunately, Hampton was able to take Sampah’s place on relatively short notice. She prepared him for the series and arranged for friends in Ghana to meet him and get him acclimated to the country. She watched his classes on Facebook Live and communicated with him daily. FIRST-TIME VISITOR’S PERSPECTIVE Hampton said he enjoyed the opportunity to teach in Ghana and appreciated the arrangements Sampah made to help him explore the area around Accra. He was able to gain a better appreciation for the country and the people who live and work there. “I’ve enjoyed my career so much,” said Hampton. “It’s exciting to think that I am helping build the profession in a country where they don’t even have a license law yet. But Vicky has built a network of people who are determined to get a license law passed through an effective association.” Whether touring the countryside or the capital city, visiting with students or complete strangers, Hampton said he was impressed with Ghana. “The weather was perfect, and the water was clean. It

Students listen during the Ghana Real Estate Education series. PHOTO BY GREPA

Hampton (center) with several of his students. PHOTO BY GREPA

Ghana

ILLINOIS REALTOR® January 2019

Ghana Deputy Works and Housing Minister Freda Prempeh posed with Hampton for photographs. PHOTOS BY GREPA

was very eye-opening to see people living off the land, in circumstances that some would consider poverty. But they had food and shelter. They said they felt safe. I felt safe.” Hampton said he’s more appreciative than ever about the proceedures U.S. professionals use to protect consumers and prevent fraud. YEARS IN THE MAKING Sampah’s interest in Ghanaian real estate dated back to 2009, following the U.S. housing crisis. Curious about what it would take to start a brokerage there, she discovered the country didn’t have real estate license laws, wasn’t regulated and didn’t yet recognize the value of exclusive agent agreements. She was advised that to succeed, she needed to help organize an association like the NAR. At first, she wasn’t sure this was

the right approach, but a few years later, she changed her mind. “When I got to Ghana in 2011, I realized that it was hard to research the market because there wasn’t much information available online,” she said. “I worked with like-minded individuals to set up GREPA with guidance from NAR.” Previous attempts by others to form effective associations faltered because they weren’t benefit-driven, Sampah said. Experience told her that continuing education, advocacy and the availability of resources such as multiple listing services would be key. As she shared her knowledge with her new friends, she built valuable relationships and created a database of real estate professionals who wanted to play a role in Ghana’s real estate evolution. In 2014, Sampah moved back to Illinois but she did not stop trying to

" It's exciting to think that I am helping build the profession in a country where where they don't even have a license law yet"

– Maurice Hampton

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improve the real estate industry in her birthplace. She shared photos from events like the Illinois REALTORS® Lobby Day and Capitol Conference in Springfield, and she explained how members would meet with their elected officials and advocate legislation that would benefit property owners and the real estate profession. She hoped her peers in Ghana would be able to someday organize similar events. ASSESSING AND MOVING FORWARD “I was impressed with the number of students (30) we attracted to the first series,” said Sampah, “as well as their quality.” “Many of our students had earned degrees abroad at prestigious universities,” Hampton said. “They were higher-level learners. I didn’t have to change my style to accommodate them. “I know my trip to Ghana is not a one-time thing. I will be making many more trips there,” he said. “I also know we’ll have to find an instructor there who’ll help us teach at a lower cost.” Plans are already being made for another education series in Ghana, they said, while looking back on the first series with pride. “We helped conduct the first ABR class in Ghana,” said Sampah. “This was a great milestone for us to achieve.” “It was a dream come true for me,” said Hampton. “It was amazing!”

ILLINOIS REALTORÂ® January 2019

AUTOMATE AND SAVE TIME USING REALTOR® TOOLS By Gideon Blustein | Member Outreach Manager and Local Governmental Affairs Director

Like many of you, I get a lot of windshield time as I travel throughout northern Illinois, Chicago and the suburbs making presentations at office sales meetings. In my attempt to limit dangerous interactions with my mobile device while driving, I have fallen in love with podcasts. One of my go-to podcasts is “The BiggerPockets Podcast,” which focuses on real estate investment through interviews with real estate entrepreneurs who’ve scaled their businesses using systemization and automation. My incessant blabbing about podcasts is probably also why my boss invited my feedback on a new Illinois Young Professionals Network (YPN) podcast featuring successful YPN alumni sharing

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tips and best practices for success. I noticed a few nuggets of wisdom that had to do with systems: “ Control the hours, the minutes, the seconds you have in your day (with) time blocking. Doing things intentionally, not by accident.” – Tommy Choi Weinberg Choi Residential, Keller Williams Chicago – Lincoln Park

“I track all of my communication with my clients (through my CRM)… I know who I haven’t talked to in a while, and so I know… I need to call that person and just check in.” – Jayme Ahlden Fay RE/MAX Realty Associates, Champaign

“Don’t spend money you don’t have. Start with the free stuff…Illinois REALTORS® would be a great resource to go to.” – Brian Kwilosz EXIT Real Estate Partners, Downers Grove

Then, the other day on Tom Ferry’s podcast, the former CRO of HubSpot explained how to identify what systems your business needs when you are trying to scale (or just take a vacation). Systemization and automation seem to have woven themselves into the fabric of our industry, but what do those words really mean? Josh Kaufman, author of “The Personal MBA” says, “A system is a

process made explicit and repeatable. Systemization is the act of creating a new system.”

Techopedia defines automation as “the creation of technology and its application to control and monitor the production and delivery of various goods and services. It performs tasks that were previously performed by humans.” Then about two weeks ago I was giving an office presentation and it hit me like a kick in the pants delivered by a Rube Goldberg contraption: Many Illinois REALTORS® benefits can be used to automate and systemize so you can scale your business! As Harold from my five-yearold’s favorite book series “Captain Underpants” often says, “No Doi!” Well, now I’ve seen the light on Illinois REALTORS® systemization and automation tools and want to share a sampling of them with you.

reduce or eliminate this spend? Try using Illinois REALTORS® RVOICE Consumer brochures (www.IllinoisRealtors.org/ RVoice) as free marketing content. Most of the guides can be co-branded and used in a variety of formats. Additional content is available through www. RealPropertyAlliance.org and the National Association of REALTORS® has customizable marketing content available via REALTOR® Content Resource (www.nar.realtor/realtor-contentresource). ADDED BONUS

Less time spent interfacing with content consultants and more time spent on relationship development. ADVOCACY EVERYWHERE: Whether you’re a new or seasoned agent, when a local government gums up a transaction or gets into your business it can be overwhelming. What is a pre-sale home inspection, how are transfer stamps issued, what is landlord licensing or the International Property Maintenance Code? You do not have to become an expert on municipal government and regulations; with

one email or phone call to your Local Governmental Affairs Director (www. IllinoisRealtors.org/advocacy) you can tap into a vast set of resources. And if you’re a managing broker who’d like to automate email forwarding Calls For Action to your office, you can enroll in the Broker Involvement Program (www.realtorparty.realtor/memberconsumer/brokers). ADDED BONUS

Client knowledge that your industry is fighting for home ownership rights.

Go forth, systematize, automate and scale! And if you’d like to share these and other tips with your team or company, invite one of the Outreach Team to give a presentation at one of your company’s meetings – you can automate that too by making it a standing annual event. Gideon Blustein serves as Illinois REALTORS® Member Outreach Manager and is a Local Governmental Affairs Director.

SOLVING CONSUMER PROBLEMS EFFICIENTLY AND EFFECTIVELY: Does your office receive phone calls from consumers with tough-to-answer questions or complaints about service from other real estate professionals? Do you run around in circles trying to find the answers and worry you’re only getting one side of the story? Systemize your response by referring them to the Illinois REALTORS® Consumer Helpline and Ombudsman Program (www.IllinoisRealtors.org/disputes) ADDED BONUS

Follow up later to ask them about the experience and capture them as a future client and referral source.

FRESH CONTENT: Are you currently budgeting for consumer- or education-focused content to identify new leads? What if you could

ILLINOIS REALTOR® January 2019

JAYME AHLDEN FAY

RE/MAX Realty Associates, Champaign

TOMMY CHOI

Weinberg Choi Residential Keller Williams Chicago Lincoln Park

BRIAN KWILOSZ

EXIT Real Estate Partners, Downers Grove

EDDIE RUETTIGER Baird & Warner Plainfield

VICTOR TELLEZ

Key Realty, Inc. Rockford

AMANDA WYCOFF

Berkshire Hathaway Snyder Real Estate, BloomingtonNormal

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BEYOND THE PODCAST:

YPN OFFERS MORE TIPS AND TOOLS TO BUILD YOUR BUSINESS In addition to the new podcast mentioned in Blustein’s column, Illinois YPN leaders are sharing strategies for success in a new informational campaign for REALTOR® members entering their second year in the business. The tips target agents or brokers who are new to the industry, but even seasoned REALTORS® can learn a thing or two about boosting profitability and streamlining business systems from these YPN alumni. And since knowing what not to do can be just as important, here are a few of their ideas on what to avoid:

What is one mistake you witness those in the business making more frequently than others? 1. COMPARING YOURSELF TO SOMEONE ELSE We work in one of the most transparent industries out there. I can look up how much someone else is selling and figure out how much they are making. But what good does that do? What kind of forward progress did that allow me to make? None. In fact, when you compare yourself to someone else, you stand still. I choose to compare myself to who I was the day before. Focus on being better every day. When you do this, what I’ve found is that every morning you wake up, you present the best version of yourself to the world and all the small daily advancements you make will compound into something huge! – Tommy Choi 2. LACK OF SELF-CONFIDENCE, FOR SURE! We are licensed professionals who guide families through perhaps the largest investment they’ll make in their lifetime. I believe there’s a lot of people who let themselves be pushed around and aren’t taken as serious by the public. Remember, we are NOT tour guides. We are REALTORS®. We don’t show, we SELL! – Victor Tellez

3. SPENDING MONEY YOU DON’T HAVE BEFORE YOU EVEN MAKE IT As a REALTOR®, you get inundated with opportunities to let go of your money. As a new agent, focus on lead generation techniques that cost little to nothing instead of purchasing leads or buying the latest technology. • Establish yourself as the go-to expert within your sphere of influence and ask for referrals. Business by referral is the BEST! • Network and build business-tobusiness relationships. Note: Think beyond real estate and lenders. Diversify your network. • Cold call or door knock. These are effective if done strategically and consistently. Plus, they don’t cost anything! – Brian Kwilosz 4. IGNORING PAST CLIENTS AND CLOSED DEALS Not only are these clients likely to buy four to five times in their lifetime they are likely to send you seven other buyers or sellers. Maybe more. – Eddie Ruettiger 5. SOME AGENTS CONDUCT THEIR BUSINESS MODELS IN A VERY TRANSACTIONAL MINDSET They don’t necessarily mean to, but they lose touch with their clients and move on to the next. I have made it a point, especially the past couple of years, to ensure my business is more relational than transactional. – Jayme Ahlden Fay

SPONSORED CONTENT

AN INSIDE LOOK AT MRED’S NEW YEAR’S RESOLUTIONS

Illinois Young Professionals Network

By Rebecca Jensen President and CEO of Midwest Real Estate Data (MRED) There’s little doubt that you’ve been bombarded recently by messages in every medium advertising the latest and greatest sales on gym memberships. The timing of these is in obvious correlation to the most common New Year’s resolution of dropping those pesky pounds that have been hanging around since Thanksgiving. At MRED, we have a few New Year’s resolutions of our own and we’re completely committed to achieving each one. Many of them are already being worked on behind the scenes. All are thoughtfully chosen to take game-changing strides in our own multiple listing service as well as to help guide the industry forward.

6. NO FOLLOW-UP The main mistake I see is no follow-up after the home is listed. Not answering calls and no follow-up AFTER the sale. I have a highly detailed template I personalize and send immediately after a home hits the market and when they receive inspection requests. It keeps us all on the same page. But, you have to follow-up on the showings throughout the process daily! Keeping your clients in a database and sending cards on occasion (personal cards, not auto-generated). I host an annual Fall Pumpkin & Pumpkin Pie Pick Up Party in October and in December I rent an historical movie theater and have professional Santa pics taken before our annual Christmas movie is shown! It gives a great opportunity to reconnect, give away prizes, thank clients and post/tag on social media. – Amanda Wycoff

Continue integration of Homesnap into connectMLS In October, we successfully launched phase one of integrating Homesnap into connectMLS. This initial rollout creates an even better experience for you and your clients by allowing you to send saved search results from the MLS to clients through Homesnap and work with clients’ interest levels in listings. But we’re nowhere near done yet. Expect to see further integrations into connectMLS this year that allow you and your clients to do more and work better in the top-rated Homesnap app. Add capabilities and functionalities to connectMLS Another integration we recently completed was with DotLoop, which allows for the sending of forms and information from connectMLS into individual Loops. We also added new search by map layers such as school names and districts. 2019 will bring more advancements in both categories, improving connectMLS’ day-to-day usability.

Find more resources online including a podcast and the Success Tips download at: www.IllinoisRealtors.org/ Membership/Realtor-Communities/ YPN/YPN-Success-Tips

Complete the onboarding of the Bloomington-Normal Association of REALTORS® We’re beyond excited to be joining forces with our fourteenth REALTOR® association. The onboarding process of bringing BNAR into connectMLS is almost complete. The result of more associations coming together will be better data and resources for all of our real estate professionals. Investigate future technologies such as Blockchain and Artificial Intelligence No one knows exactly what affects these emerging technologies will have on real estate, but we’re dedicated to finding out. MRED purposefully keeps tabs on ideas that could change the landscape of our industry, with Blockchain and AI grabbing recent headlines. We’re taking the lead on researching if and how they can be leveraged to enhance our services. Stay tuned! Improve our commercial real estate focus We understand that there are unique challenges associated with the commercial side of real estate transactions. In 2019, we’re working hard to improve the commercial side of the MLS and make it a more efficient environment for everyone. That means better defining fields and responding to the idiosyncrasies that come along with commercial sales. These five goals represent a fraction of what MRED is doing to fulfill our daily resolution of providing the best system, support, and services to equip real estate professionals with everything needed to succeed. There’s no doubt that 2019 is going to be an exciting year.

ILLINOIS REALTOR® January 2019

THE EVOLVING COMMERCIAL MARKET Commercial sales volume is strong and the cost of those sales is trending higher even as tightened commercial real estate inventory means fewer total transactions, according to the National Association of REALTORS® (NAR) 2018 Commercial Member Profile. What’s ahead for 2019? NAR’s Commercial Real Estate Outlook: 2018. Q3 expects the reduced corporate tax rate to spur increased consumer and investment spending, unemployment to fall even lower and the economy to shift to full capacity. The commercial market is on track to see “solid demand and increasing cash flows,” according to the outlook. Vacancy rates will vary with multifamily experiencing growing availability, office and retail property vacancies moving sideways and steady rent growth for industrial spaces, the outlook projects. K.C. Conway, chief economist for the CCIM Institute, and Illinois REALTOR® Marty Smith, a commercial broker in Champaign, take a closer look at what is happening in a market segment of interest to many – commercial retail. Conway points out that even though some major retailers bowed out in 2018, the overall retail sector showed signs of strength. And Smith spotlights how old neighborhood malls can find new life as mixed-use properties.

TIME TO RETELL THE RETAIL STORY

K.C. Conway

MAI, CRE CCIM Chief Economist & Director of Research, Alabama Center for Real Estate at the University of Alabama

If you only read media headlines about the retail industry and recent bankruptcies and store closings, you would believe the sensational characterization that the industry is in a “retail apocalypse.” But as Col. Potter from the “MASH” television series responded to mischaracterizations, I too, would respond to the idea of a “retail apocalypse” with, “horse hockey!” It is time to objectively re-examine the facts and retell the retail story. The real retail story in 2018 was quite the opposite of apocalyptic. Start with retail sales and retailer 22 www.IllinoisRealtors.org

PHOTO BY BIGSTOCKPHOTO.COM

earnings. Even as 2018 headlines were dominated by Toys ‘R’ Us and Mattress Firm bankruptcies, there were areas of the market that exceeded expectations. Used auto and gasoline sales were higher, as were earnings for retailers such as Home Depot, which had higher sales driven by homeowners remodeling and other rebuilding after last year’s hurricanes. Retailers Macy’s and Kohl’s had stronger than expected earnings, boosted in part by apparel and backto-school shoppers. And by mid-2018, Wal-Mart had posted its best earnings in a decade with even grocery and online sales up 40 percent. If that is not enough to convince you that there isn’t a “retail apocalypse,” then how about the following performance measures? u By mid-2018, PREIT, a large real estate investment trust that invests in malls, said it had leased all its anchor and big-box retail vacancies. PREIT Chief Financial Officer Bob McCadden also expected no further anchor closures to be announced in 2018. PREIT also noted a 300-basis-point increase in operating results from the first quarter of 2018. When was the last time you had those kinds of results on a mall portfolio? u TREPP Research released a midyear report on the state of retail and analyzed more than 34,500 retail real estate loans across the U.S. It found retail commercial mortgage-backed securities (CMBS) properties in recovering markets

have posted consistent year-over-year net operating income (NOI) growth in the years following the financial crisis. Retail occupancy figures have recovered to levels just below their pre-recession prime. And retailers investing in tech innovation and experiential formats are positioning themselves to thrive in the future as the line between e-commerce and physical distribution channels converge. A few retailers at the front of that shift are PGA Superstore, Batteries Plus and Top-Golf. Not all retail is performing to perfection, but it’s not apocalyptic either. There are two final trends to monitor in 2019, one good and the other not. The good news is that retail buildings are increasingly being repurposed and put back into productive reuse, which enables communities to combat the blight from vacant stores and add revenue back to sales tax coffers. The CCIM Institute and the Alabama Center for Real Estate (ACRE) at the University of Alabama collaborated on a report, “Adaptive Reuse: Turning Blight into Bright,” that looks at this trend. One example worth noting is a mall converted into a warehouse outside Dallas, Texas. bit.ly/ CommercialConversion On the other side is a negative trend worth watching. At least one city outside Boston imposes a fee or tax penalizing landlords with vacant retail space and similar ideas have been under consideration in New York City and San Francisco. What's next, a vacancy tax on empty hotel rooms or unleased

apartments? Local government leaders and property tax assessors have a target on commercial real estate owners due to lost property tax revenues. They don’t understand the impact e-commerce has had on physical retail stores. Our industry needs to be vocal on this bad idea. Believe it or not, retail property owners don’t like vacant stores either.

CREATING A BRIGHTER TOMORROW FOR TODAY’S DIMMING RETAIL MALL Marty Smith

Commercial Broker with SVN Ramshaw Real Estate in Champaign, IL, Specializing in Client Acquisitions, Leasing, and Creative Property Portfolios

As commercial REALTORS , we battle and overcome economic indicators, local market conditions and various buyer and seller issues with most listings. But the task of marketing and repurposing fading properties redefines that challenge, initiative and creativity. We haven’t found the perfect “how-to” best seller, podcast, or “magic dust” to ensure success, but we can rethink the standard practice of listing a faded retail property. Papering storefronts with signage and marketing “Former Retail Space” on local, regional and national websites is no longer sufficient when it comes to backfilling dimming malls. A fresh approach is needed to reimagine, refocus and repurpose the property. Reshaping public perception of a property becomes an even bigger task than marketing it to potential tenants. Without constant push back and repeated messaging, the media continues to portray the evolution to a mixed-use property as a traditional retail shopping mall. Perspectives can be changed about these mixed-use repurposing plans through social media, presentations and business networking. As public awareness grows and perceptions transform, even the smallest tenant announcements become big news creating the momentum and excitement necessary for a redirection of tenant mixed-use properties. The Lincoln Square Mall in Urbana is an emerging example of this new approach. It is listed on the National Register

Lincoln Square Mall in Urbana. PHOTO BY LINCOLN SQUARE MALL

of Historic Places as the first enclosed indoor mall in the U.S. Built in 1964, it was the bustling retail center of downtown Urbana and originally included a Carson Pirie Scott multilevel department store as its anchor, surrounded by additional retail stores, family gathering space, a food court and children’s indoor play areas. Today, with the national department store, other retail shops and bustling shoppers long gone, you will find a new variety of mixed use. It is now home to law offices, financial services, community service agencies, athletic and therapeutic services, a fitness center, faith-based organizations, a co-op grocery, eclectic local restaurants and

unique specialty retail. With more work to do and spaces to fill, the resurgence of Lincoln Square Mall is gaining momentum. Through constant remarketing, messaging and creative energy, evolving public perception of the property and community excitement are pointing to a bright future. About the writer: REALTOR® Alex Ruggieri, CCIM, CIPS, CRE, SEC, is a senior investment advisor with SVN-Ramshaw Real Estate in Champaign. He can be reached at alex. ruggieri@svn.com.

RESIDENTIAL REAL ESTATE IN 2019: WHAT TO EXPECT

Nationally, there has been speculation that the housing market might be softening as home sales seemed to slow in the second half of 2018 amid rising mortgage interest rates, higher home prices and the sustained issue of low inventory. But in his 2019 forecast, NAR Chief Economist Lawrence Yun said he expects the new year to be a stable one. Yun said 2017 was one of the strongest years for home sales in a decade and 2018 is expected to end the year only marginally lower. The NAR forecast calls for more of the same in 2019, with modest gains in

home sales and a slowdown of home price appreciation, which will surely be good news for prospective homebuyers who have an eye toward affordability. Find the full NAR forecast at bit.ly/ NAR_Outlook2019. Wondering about the housing forecast for Illinois? The Regional Economics Applications Laboratory (REAL) at the University of Illinois is forecasting positive gains in home sales and continued growth in median prices, although within a narrower range than 2018. Find highlights of next year’s forecast in Market Watch on page 30 and the entire forecast at www. IllinoisRealtors.org/MarketStats. ILLINOIS REALTOR® January 2019

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LAFARGUE AND PERSIN ARE ‘GOOD NEIGHBORS’ TO THEIR COMMUNITIES Illinois REALTORS® Michael LaFargue and Jack Persin were named 2018 REALTOR® Magazine Good Neighbor Award honorable mentions. The annual award honors REALTORS® from around the country who make a difference in their community. Both received $2,500 grants for their charities as honorable mentions; LaFargue received a $2,500 bonus grant as the Web Choice Favorite winner.

Michael LaFargue

Jack Persin

Michael LaFargue and his wife, Jenny, at the Good Neighbors award dinner in Boston in November. PHOTO BY NAR

Michael LaFargue, of Coldwell Banker Residential in Chicago, has worked with several nonprofits related to transportation, schools, neighborhoods and parks in an effort to make change in underserved areas of Chicago. He is president of the West Chesterfield Community Association and led an effort to install 40 neighborhood security cameras, which led to the arrest of suspects in the murder of a local judge. He also leads the Red Line Extension Coalition which is leading the drive for a $2.3 billion, 5.3-mile train route expansion that would benefit people in underserved areas. What does it mean to you to be selected as a Good Neighbor Award honoree? This is a tremendous opportunity to interact with the leadership and membership of the National Association of REALTORS®, one to the world’s largest and most respected trade associations. Maybe the next opportunity to serve my community will be as a volunteer lobbyist for the NAR, to bring resources to underserved people and communities. What drives you to give back to your community? Two things drive me. The first is that it

is my turn to follow and keep alive the traditions of previous leaders who have worked to maintain and improve West Chesterfield and the Greater Roseland Community. The second drive is that it is important for REALTORS® to keep their names in the forefront to generate business, and volunteerism is a way to do this. What’s your advice to a REALTOR® who wants to find a charity or cause to contribute to? Find a cause that is important you and participate. You will naturally tweet, blog, post on social media and write about things that lift the organization and your brand. Were you surprised to win the Web Choice Favorite contest? Yes! There were many competing finalists whose services, reputations and client bases yield a lot of respect and have a far reach. The Web Choice contest allowed me to use social media and to reach out to community, public officials, industry colleagues and friends and family in a way I haven’t done since running for public office in 2014. Friends jokingly said I should not have had any worries because of Chicago’s fabled tradition of “voting early and voting often.”

Jack Persin, of Baird & Warner in Naperville, co-founded Naperville Responds for Veterans, a nonprofit that helps low and moderate-income veterans and their families live with dignity and remain in their homes as they age. The organization has helped nearly 200 veterans to date by making needed repairs, such as replacing aging systems and constructing wheelchair ramps to accommodate disabilities. What was your reaction to being named a Good Neighbor honorable mention? To be acknowledged for assisting veterans and improving their lives is rewarding. The veterans who serve our flag and our country are the real good neighbors; my selection is a way of honoring all veterans. Why has it been important to you to give back? I have been blessed, first by my parents who afforded me an education, family roots and purpose in life. Second, I always want to set an example for my children and 11 grandchildren by doing acts of kindness. It is contagious to see just one person doing something good and, it can encourage others to reach out and make a difference for the good of others. How can other REALTORS® help? There are so many ways to help. Some choose a path of financial assistance, some donate their time to make a difference, others set a path by organizing and leading a cause for helping others in need. Jack Persin and other recipients received grant money, plaques from NAR and toy horses from Wells Fargo, one of the event sponsors. PHOTO BY NAR

ILLINOIS REALTOR® January 2019

AT THE CAPITOL Julie Sullivan | Senior Director of Legislative & Political Affairs

NEW LAWS AFFECTING REAL ESTATE IN THE NEW YEAR The new year will bring changes to the political dynamic in Washington, D.C., and in Springfield. As a result of the November election, Democratic majorities were strengthened in the Illinois congressional delegation, the Illinois State Senate and the Illinois House of Representatives. All of Illinois’ statewide constitutional officers will also be Democrats. The new members of the 101st General Assembly will be sworn in on Jan. 9, the state’s constitutional officers on Jan. 14 and our work will begin anew. Here are some of the new laws and legislative changes of interest to Illinois REALTORS® that go into effect on Jan. 1, 2019: CHANGES TO VARIOUS REAL ESTATE-RELATED LICENSURE ACTS • ALL professions licensed under the Illinois Department of Financial and Professional Regulation (IDFPR) with a continuing education requirement will be required to include at least one hour of sexual harassment prevention training for license renewals occurring on or after Jan. 1, 2020. • Real estate brokerages can simply notify IDFPR of the branch offices they operate, rather than having to apply for a separate license for those offices. The Real Estate Act was also clarified, especially relating to LLC’s and corporate entities. • The Real Estate Appraiser Licensing Act will no longer have an exam requirement for associate real estate trainee appraisers. In addition, there will no longer be a limitation that such trainee licenses may not be renewed more than two times. • IDFPR will be authorized to allow applicants to provide his/her

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individual taxpayer identification number as an alternative to providing a social security number when applying for a license. Additionally, no person may be denied a license, certificate, limited permit or registration solely based on his/her citizenship status or immigration status. LOCAL GOVERNMENT CONSOLIDATION EFFORTS • The Local Government Reduction and Efficiency Division of the Counties Code, first enacted in 2013, will now have shortened timeframes for certain processes in the dissolution of local governmental units. • Mosquito Abatement Districts, a special taxing district, can be consolidated or merged. Consolidation can be with other mosquito abatement districts or the District can be annexed to a municipality, a county or township if those governing authorities of the governmental unit agree to accept the functions. • The Lake County Board will be

permitted to dissolve the Seavey Drainage District which has been inactive for some time. The Lakes Region Sanitary District will also be dissolved upon entering into a dissolution agreement with Lake County for the county to acquire all the assets and responsibilities of the district. • The Local Government Electronic Notification Act will allow a unit of local government to establish a process to allow people to select electronic notifications through an electronic notification delivery system for governmental mailings that are now being sent by U.S. mail. This will be an opt in or opt out system, no resident or taxpayer will be required to receive electronically any notifications that are currently required to be sent out by mail. TAXATION, FEES AND FINANCING ISSUES • Illinois’ current historic preservation tax credit program will be expanded statewide, allowing Illinois to compete with neighboring states

with similar incentive programs. The new law creates an income tax credit equal to 25 percent of the qualified expenditures incurred by a qualified taxpayer undertaking a qualified rehabilitation plan of a structure located in Illinois and defined as a certified historic structure under the federal Internal Revenue Code. The total amount of credits available in a given year will be limited to $15 million and no project can receive more than $3 million in credits. This credit is in place until 2023. • Cook County will be allowed to establish a predictable fee schedule for documents recorded with the recorder (other counties were granted the authority in 2017). The predictable fee schedule eliminates surcharges or fees based upon the individual attributes of documents to be recorded with the county recorder and minimizes errors in estimating and disclosing recording fees, especially given the strictures of the TRID process. • The Property Assessed Clean Energy (PACE) Act will be expanded to include new construction. The Illinois Finance Authority will also be authorized to issue bonds in connection with PACE programs. OTHER REGULATORY ISSUES • The notice language within Illinois’ Home Repair and Remodeling Act has been modified within the consumer rights pamphlet. • A pilot program will begin for the county recorder (in counties with a code hearing unit) to establish a process in response to expired and/ or unreleased mechanics liens on residential property that can cloud title. Under the program, if a recorder determines there is an expired lien, a “Notice of Expired Lien” must be sent by certified mail to the last known address of the owner. The owner shall confirm in writing that the lien is not

involved in pending litigation and may request that the recorder proceed with a referral or serve a Demand to Commence Suit on the lienholder of the expired lien. This pilot program will be repealed Jan.1, 2022. FLOOD CONTROL AND STORMWATER MANAGEMENT • A new Flood Control Commission will “study and develop an integrated floodplain management coalition of communities in the Fox River Watershed to serve as an example and catalyst to other watershed communities in the DuPage, Kane, Lake, McHenry and Will County regions to jointly leverage community resources and collaborate…”. The Illinois Department of Natural Resources will be in charge of this appointed commission. Appointments are to be made by the leaders of the General Assembly and the affected county boards. A report is required to be submitted to the General Assembly by Dec. 31, 2019. • The number of counties permitted to establish a stormwater management planning committee will be expanded to add counties that contain all or part of an urbanized area. Ten additional downstate counties could be eligible, but ONLY IF authorized to do so by voters in a front door referendum. The stormwater management committees have various regulatory powers, including the authority to impose fees to mitigate increased runoff due to new development. The Illinois law for the downstate counties also permits the imposition of either a property tax OR sales tax if approved by the voters. The authority is also given to allow the committee to make grants to landowners, units of local government and not-for-profit organizations (which could include a HOA).

KEY DATES FOR 2019 SPRING SESSION January 9 101st General Assembly Inauguration January 9-10 House and Senate in Session January 14 Constitutional Officers Inauguration January 22-24 Illinois REALTORS® Public Policy Meetings (East Peoria) January 29 House and Senate begin Session February 15 Bill Introduction Deadline March 22 Senate Committee Hearing Deadline March 29 House Committee Hearing Deadline April 12 Third Reading Deadline April 15-26 Spring Recess April 30 Illinois REALTORS® Capitol Conference May 10 House and Senate Committee Deadline May 24 Third Reading Deadline May 31 Scheduled Adjournment Date The complete 2019 spring calendars for the House and the Senate are available on the General Assembly website www.ilga.gov

ILLINOIS REALTOR® January 2019

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Mike Scobey | Director of Local Advocacy and Global Programs

ILLINOIS REALTORS® DEFEATS FIVE HOME RULE INITIATIVES

Illinois REALTORS® handily defeated several municipal referenda which requested Home Rule authority in the November election. Home Rule was on the ballot in five municipalities: Prospect Heights (Cook County), Winthrop Harbor, Beach Park, Zion (all Lake County) and Lemont (Will County). While Home Rule gives municipalities more local autonomy, when misused, it can negatively impact real estate and private property owners. Illinois REALTORS® is the only advocate for private property rights at the state and local levels. That is why we intend to educate communities about the unintended consequences of Home Rule.

Why do Illinois REALTORS® oppose Home Rule? We have seen abuses of Home Rule power in some municipalities. • We oppose the increased debt for local governments that Home Rule allows. • We oppose higher property taxes without voter approval that comes with Home Rule. • We oppose the additional regulations, red tape and fees on real estate transactions that Home Rule authority allows. • We oppose possible new and excessive property inspections and fees which Home Rule authority can impose.

In addition to the Home Rule referenda we opposed, the Illinois REALTORS® supported a one-cent sales tax in Frankfort (Will County) to help fund infrastructure improvements and a one-cent sales tax in Sangamon County to help fund elementary and secondary school districts. Both sales tax measures were approved by voters. In all of these campaigns, the Illinois REALTORS® did direct mail and other voter education/outreach directed to likely voters.

The 2019 Municipal Elections (to be held in most municipalities on April 2) give us another opportunity to be engaged politically. There may be more Home Rule and real estate transfer tax referenda that we will oppose, and there will be pro-REALTOR® candidates that we can support. Illinois REALTORS® will be there to keep you informed.

ILLINOIS REALTOR® January 2019

MARKET WATCH 2019 ILLINOIS HOUSING MARKET FORECAST Moderate growth expected for home prices and sales The forecast calls for median home prices to continue to grow in 2019, although within a narrower and slightly smaller range than the year before. Illinois home prices have consistently posted yearover-year gains every month for the last six years. There has been greater fluctuation with home sales as lower housing inventory and rising mortgage interest rates have affected the market and homebuyer opportunities. But the 2019 forecast projects that Illinois home sales will experience overall positive gains, led by the growth of regular sales in the Chicago area. There are some unknown factors that could affect the housing market – new leadership at the state level and an evolving economic picture at the federal level – but the early outlook points to a stable Illinois housing market in 2019. Find the complete 2019 forecast at: www.IllinoisRealtors.org/marketstats

2019 OUTLOOK AT A GLANCE

Illinois monthly home sales Chicago PMSA home sales Illinois median price Chicago PMSA price

growth is expected to range from

-0.2% to +16.3% growth is expected to range from

-0.7% to +17.0% gains are expected to range from

+1.2% to +4.4 % gains are expected to range from

+2.0% to +4.4 %

“ Now that the election of a new

governor has been completed, there are concerns about how he will address the myriad fiscal problems facing the state. The housing market in Illinois Geoffrey J.D. has certainly been dampened Hewings by anemic employment growth Director of the Regional Economics Applications with continued net outLaboratory of the migration further reducing University of Illinois. demand in the housing market.”

ILLINOIS HOUSING: A DECADE AFTER THE GREAT RECESSION The housing market has changed and recovered in the years since the Great Recession. In January, Illinois REALTORS® will release a report from the Regional Economics Applications Laboratory (REAL) that takes a comprehensive look at the market gains in the last 10 years. Source: University of Illinois REAL, Illinois REALTORS®

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REALTOR® COMMUNITY FOLLOW US:

FOUR HONORED WITH PRESIDENTIAL MEDALLIONS Congratulations to these REALTORS® who were honored for their service to the association and industry by 2017 Illinois REALTORS® President Matt Difanis.

From left, are Jakeeva Lee, CAR industry relations coordinator; CAR President Tommy Choi; Difanis; and CAR CEO Michelle Mills Clement.

Jean Crosby

Berkshire Hathaway HomeServices Crosby Starck Real Estate, Rockford

PHOTO BY CHICAGO ASSOCIATION OF REALTORS®

DIFANIS HONORED FOR DIVERSITY OUTREACH

Zeke Morris EMA Realty and Management, Chicago

Courtney Q. Jones Chicago Homes Realty Group, Chicago

Mabél Guzmán @Properties, Chicago

STOVER RECOGNIZED WITH SRES OUTSTANDING SERVICE AWARD

Illinois REALTORS® Immediate Past President Matt Difanis was honored in October for his work promoting diversity with a Titan Award from the Chicago Association of REALTORS® Industry Partners, a coalition of real estate industry groups.

Naperville REALTOR® Lisa Stover received the Seniors Real Estate Specialist (SRES) Outstanding Service Award in November in Boston for her work with seniors and meeting their real estate needs. Stover is the founder and managing broker of Presto Real Estate Services in Naperville.

HIGHLIGHTS FROM THE 2018 REALTORS® CONFERENCE & EXPO IN BOSTON

Hundreds of Illinois REALTORS® attended the National Association of REALTORS® (NAR) Conference & Expo and governance meetings in Boston in November.

Illinois REALTORS® Local Governmental Affairs Director Brian Bernardoni (second from left) performed with other REALTOR® musicians during the NAR 360 session.

2016 Illinois REALTORS® President Mike Drews (with his wife, Kay) was installed as the 2019 NAR Region 7 Vice President, (Illinois, Indiana, and Wisconsin). PHOTO BY MATT DIFANIS

Illinois REALTORS® Sarah Ware and Tommy Choi were recognized for graduating from the NAR Leadership Academy. PHOTO BY MATT DIFANIS

NAR Treasurer John Flor (right) presents a Presidential award to Illinois REALTOR® Sue Wiskowski-Fair for her longtime commitment to the industry.

Team Illinois REALTORS® was out in full force during the Relief Run, which raised more than $100,000 for the Relief Fund and other charities.

REALTORS® Chris Read and Brett J. Decker share information at the Illinois Caucus.

ILLINOIS REALTOR® January 2019

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