Illinois REALTOR® October, 2014

OCTOBER 2014

THE VOICE FOR REAL ESTATE IN ILLINOIS

SET THE STAGE FOR SUCCESS What Does It Take to Succeed in Real Estate?

with Your Next Listing Presentation

Polishing Your Negotiating Skills IAR Makes Changes to Enhance Professionalism in Industry

+ PLUS

The Business of Green

2014

PHOTO GALLERY, RECAP & SPONSORS

www.illinoisrealtor.org

THE OFFICIAL PUBLICATION OF THE ILLINOIS ASSOCIATION OF REALTORS速

CONTENTS OCTOBER 2014

Departments 5 President’s Message: Take the Steps, Make a Difference in Year Ahead 7 What’s Online: Market Stats, Free Member Downloads, IAR REALTOR® Search, Get Social with IAR 8 Quick Takes: Helping At-Risk Homeowners with HARP, MustHaves for Luxury Homebuyers, New Transaction Hotline for Members 16 Recap: 2014 IAR Fall Conference & Expo Highlights 22 Legal Update: BPOs and CMAs and Scam Alert

Cover art: Terry Morris and agencyby/ Bigstock.com

27 RVOICE: ‘Crime-Free’ Housing Proposals and New Brochures 28 At the Capitol: 2014 Legislative Scorecard

ILLINOIS ASSOCIATION OF REALTORS®

33 Market Watch: Hidden Cost of Foreclosures

THE VOICE FOR REAL ESTATE IN ILLINOIS

38 REALTOR® Community: YPN REbarcamp, Let’s Talk Real Estate, Presidential Medallion Honorees, Fall Conference App

Features

10 13

GRI Courses II & III Dec. 1-4, 2014 GRI Grad Course Dec. 3-4, 2014 www.illinoisrealtor.org/GRI

24 34 36

Set the Stage for Success with Your Next Listing Presentation What Does It Take to Succeed in Real Estate?

Polishing Your Negotiating Skills IAR Makes Changes to Enhance Professionalism in Industry The Growing Business of Going Green

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PRESIDENT’S MESSAGE Jim Kinney | ABR, CRB, CRS, GRI, 2015 IAR President

IN THE MOVIE OF YOUR LIFE, BE THE ACTOR NOT THE AUDIENCE Setting a course amid a time of change is not a spectator sport.

I

n Chicago in September I had the honor of accepting the gavel to lead the Illinois Association of REALTORS®.

In my inaugural remarks, I issued a challenge to IAR’s 41,000 members. “In the movie of your life, be the actor not 2015 IAR OFFICERS: President Jim Kinney, Immediate Past the audience,” I said.

President Phil Chiles, Treasurer Doug Carpenter and PresiThis is a great time to dent-elect Mike Drews. Photo by Mike Hudson ® be a REALTOR . We’ve lifted out of the worst recession any one of us can remember, the markets are moving in the right direction and our clients are feeling more comfortable about the future.

It would be easy to take a breather right now and enjoy the wind at our backs. Instead, I’d challenge us all to do just the opposite. Our time is now when it comes to taking bold steps to protect the industry and our livelihoods.

This year, IAR’s leadership has set several goals designed to strengthen the industry and the REALTOR® brand. They include: • Enhancing the association’s attention to the highest professional standards. IAR is launching a Citation Program to better police ethics violations and plans an awareness campaign of how to conduct business the right way.

• Adding resources to the RVOICE program which watches out for members’ interests at the local level. The program, combined with IAR’s Statehouse lobbying, keeps bad policy from making it harder for IAR’s members to do business in Illinois.

• And IAR will do research to help members better understand the demographic forces shaping our future.

Setting a course amid a time of change is not a spectator sport.

This year, I ask you to join with me to make a difference. Get involved with your association, donate to RPAC, and take a stand on issues that affect your business.

I look forward to serving you this year.

P

hil Chiles, the 2014 IAR President thanked the association’s members at an Inaugural Banquet held Sept. 6, 2014, in Chicago.

Chiles talked about his year leading IAR, which included the construction of three Habitat for Humanity homes in the state, the creation of a Division of Real Estate within the Illinois Department of Financial and Professional Regulation and an agreement by the Illinois State fire marshal not to circumvent the General Assembly on rules relating to statemandated installation of fire sprinkler systems.

Chiles also pointed to the Points of Light Ambassador program, which helped raise awareness of and participation in RPAC.

2014 IAR President Phil Chiles (third from left) and 2015 President-elect Mike Drews (far left) pose with Habitat for Humanity homeowners in Aurora. State Rep. Stephanie Kifowit (far right) attended a ribbon cutting ceremony at the build.

Photo by Kristen Jungles

ILLINOIS REALTOR® October 2014

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Weichert puts it at your fingertips. ®

At Weichert, Realtors®, we are constantly innovating, developing resources to propel your career to a giant leap forward. Here are a few that may interest you:

Technology – Independent Research ranks Weichert.

com among the top five of all real estate broker Websites* Every month, our site averages over 2.5 million visits, with 700,000 additional visits to our mobile website*

Leads – The Weichert Lead Network® provides a one of a kind, instant response experience for online house-hunters and provides local Weichert sales associates with live leads through a personal handoff.

Support – Weichert® University is available, on demand, offering hundreds of courses to fit your schedule. These are supplemented with webinars, live training, and skill sessions, to keep you out front.

If you are committed to making this your best year yet in real estate, tap into Weichert. Our offices continue to look for outstanding sales associates who have the drive to be the best. Call your local Weichert office today or 800-301-3000. We’d be glad to explain all Weichert can do to move you forward.

Weichert, ®

The Way Forward Information about Weichert franchises is available on www.weichertfranchise.com or by calling 800-533-9007. *Experian Hitwise Most Popular “Websites in Business and Finance – Real Estate” ranked by view share, 8/13. ©2014 Weichert, Realtors®. Weichert® is a federally registered trademark owned by Weichert Co. All other trademarks are the property of their respective owners. REALTOR® is a federally registered collective membership mark which identifies a real estate professional who is a Member of the NATIONAL ASSOCIATION OF REALTORS® and subscribes to its strict Code of Ethics. Each WEICHERT® franchised office is independently owned and operated. This advertisement is not an offering. An offering can only be made through a Uniform Franchise Offering Circular and in states where authorized. In New York State, an offering can only be made by a prospectus filed first with the Department of Law of the State of New York. Such filing does not constitute approval by the Department of Law. If you are presently under contract with a real estate franchise, please disregard this solicitation.

OUR ADVERTISEMENT HAS NOT BEEN REVIEWED OR APPROVED BY THE CALIFORNIA DEPARTMENT OF CORPORATIONS. ANY COMPLAINTS CONCERNING THE CONTENT OF THIS ADVERTISEMENT MAY BE DIRECTED TO THE CALIFORNIA DEPARTMENT OF CORPORATIONS at www.corp.ca.gov.

ILLINOIS ASSOCIATION OF REALTORS® THE VOICE FOR REAL ESTATE IN ILLINOIS

WHAT’S ONLINE

2015 IAR OFFICERS President James M. Kinney, ABR, CRB, CRS, GRI jim.kinney@bairdwarner.com President-Elect Mike Drews mdrews@dossrealtors.com Treasurer Doug Carpenter, ABR, AHWD, SFR doug21@comcast.net Immediate Past President Phil Chiles, ABR, CRS, GRI, SRES pchiles@thegroup.com

KNOW MORE ABOUT YOUR MARKET WITH IAR MARKETSTATS

Use IAR’s housing data to become a trusted resource on the market. Find infographics you can share with consumers, monthly housing forecasts from the University of Illinois and a breakdown of the latest housing statistics for the state, your region and your county. Go to www.illinoisrealtor.org/membermarketstats and you’ll also find historical data and IAR Talking Points on what is happening in the market now.

Chief Executive Officer Gary Clayton, CAE, RCE Editor Jon Broadbooks Senior Editor Stephanie Sievers Content Marketing Specialist Bill Kozar Graphic Designer Katie Grant

www.illinoisrealtor.org/membermarketstats

GO

For advertising information contact Arlene Braithwaite, 410-772-0820, arlenetbg@comcast.net The ILLINOIS REALTOR® (ISSN 0744-221) is published four times a year during the months of January, April, July, and ­October by the Illinois Association of R ­ EALTORS®, 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 articles of the ILLINOIS REALTOR® are those of the author and do not necessarily represent the opinions of the Illinois ­ A ssociation of REALTORS ®. Advertising of product or services does not imply endorsement.

Advertising rates are available at www.illinoisrealtor.org or on request. ­Annual dues of every REALTOR®, ­REALTORASSOCIATE®, and Affiliate member of IAR includes $3 for a one-year subscription to the ILLINOIS REALTOR®.

VOLUME 51: NUMBER 4 Copyright © 2014 Illinois Association of REALTORS® All rights reserved. www.illinoisrealtor.org www.yourillinoishome.com e-mail: IARnews@iar.org blog: www.IARbuzz.com

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70+ FREE CONTRACTS, FORMS, DOWNLOADABLE BROCHURES

www.illinoisrealtor. org/downloads IAR members have exclusive access to the most up-to-date forms, brochures, manuals and guides including the popular: •

Federal Lead Paint Pamphlet

•

Radon Testing Guidelines Pamphlet

•

License Law Manual

•

Seller Disclosure

IAR REALTOR® SEARCH

http://www.illinoisrealtor.org/findarealtor Looking for an Illinois REALTOR®? Use the quick and easy search on the IAR website to find a REALTOR® by name, city or company.

GET SOCIAL WITH IAR

IAR offers a number of ways that you can stay “in-the-know” with IAR on social media including: Facebook: www.facebook.com/ IllinoisAssociationof REAL TORS Twitter: https://twitter. com/ILREALTOR

STAY SAFE ONLINE www.staysafeonline.org October is National Cyber Security Awareness Month.

LinkedIn: https://www. linkedin.com/company/ iar-llinois-association-ofrealtors YouTube: www.youtube. com/user/IllinoisRealtor

ILLINOIS REALTOR® October 2014

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QUICK TAKES Helping At-Risk Homeowners with HARP The Federal Housing Finance Agency (FHFA) is stepping up its efforts to educate underwater owners about the options of refinancing to a lower interest rate with the Home Affordable Refinance Program (HARP). Thousands of Illinois homeowners are eligible for the HARP program. FHFA has created an interactive online map showing eligible borrowers. Find the map and an electronic toolkit at HARP.gov.

Who qualifies for HARP? •

The mortgage loan must be owned or guaranteed by Fannie Mae or Freddie Mac.

•

The mortgage must have been originated on or before May 31, 2009.

•

Current loan-to-value ratio must be greater than 80 percent.

•

Homeowners must be current on their mortgage payments with no late payments in the last six months and not more than one late payment in the last 12 months.

(Source: Federal Housing Finance Agency)

FICO Changes Credit Score Calculation

Consumers with unpaid medical debt or credit accounts that were sent to collections but have since been paid off could see their FICO credit scores improve. In August, FICO announced that it was changing its credit scoring system to give less weight to those factors.

The move could mean a 25-point boost in the credit score of a consumer whose negative debt is primarily from medical costs, according to FICO. www.fico.com

8 www.illinoisrealtor.org

Chef’s Kitchen Tops List of Must-Haves for Many Luxury Homebuyers

When it comes to luxury homes, one thing buyers put high on their list of must-have features is a high-end chef’s kitchen, according to a survey by realtor.com.

Other house features that make the list:

44%

38%

36%

say a home’s view is important

say a home’s square footage is an important factor in deciding to buy

look for home with an expansive master suite

(Source: Realtor.com, http://www.realtor.com/news/realtorcom-survey-39-consumers-may-considering-luxury-lifestyle)

475 The number of Latinooperated farms in Illinois according to USDA Census of Agriculture data.

There are now more Latino-operated farms in the U.S. with the number growing 21 percent between 2007 and 2012.

Fewer Homes Flipped in 2Q of 2014 Fewer real estate investors flipped homes in the second quarter of this year and those who did, saw a lower gross return on their investment, according to RealtyTrac’s Q2 2014 U.S. Home Flipping Report. Flipped homes — defined by RealtyTrac as a property that is purchased and then sold again within 12 months — accounted for 4.6 percent of single family homes sold in 2Q 2014, down from 6.2 percent in 2Q 2013. Average gross returns were down from 31 percent to 21 percent during the same time period. www.realtytrac.com

IAR Now Offers Transaction Helpline for Members In addition to the IAR Legal Hotline, IAR is now offering a Transaction Helpline to provide members with a resource for those questions or issues that typically arise out of or are related to the agreement to sell or purchase real estate. Jeffrey T. Baker, an attorney with Sorling Northrup, is the Transaction Helpline attorney and the new service is available to all IAR managing brokers. www.illinoisrealtor.org/transactionhelpline

ILLINOIS REALTOR® October 2014

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SET THE STAGE FOR SUCCESS

with Your Next Listing Presentation

By Stephanie Sievers REALTOR® Sue Miller believes the first hour of a listing presentation is critical. This one-on-one meeting is your chance to showcase the professional way you conduct yourself, establish a connection with potential sellers and educate them about what is happening in the market and how you can help them sell their home. Fail to impress and they will look elsewhere.

“My philosophy is if you have not given them the facts, built trust and walked out with an agreement in an hour, you probably don’t get the job,” says Miller, managing broker of Coldwell Banker Honig-Bell in McHenry.

With so much riding on your listing presentation, what can you do to improve it and make yourself stand out from all of the other agents hoping to get the seller’s business?

The keys are practice, preparation and personal connections.

“We forget that we don’t have a product Sue Miller to sell. All we sell is a service,” Miller said.

“Our clients want us to serve them. They want it at their speed, in their preferred method and at their preferred pace.”

Today’s housing market is different than it was even a few years ago and that affects how agents should approach the listing presentation now.

During the economic downturn, the listing presentation conversation focused on value. Sellers wanted to know what their homes were worth and if they were in a position to sell, said Miller, who also is a real estate trainer in Illinois. Now as home prices have rebounded and owners are accumulating more equity, the listing presentation has shifted to the more traditional conversation of sellers asking what agents can do for them, she said.

PRACTICE MAKES PERFECT One of the most common mistakes that most agents make is not rehearsing their listing presentation before they meet with clients, says trainer Wayne Paprocki.

Athletes and other professionals warm up and practice. Too many REALTORS® think they can just walk in and wing it.

“Agents don’t warm up, they show up and that is the first mistake they make,” he said.

Don’t be the agent who fumbles through the listing appointment or shows up only to Wayne Paprocki 10 www.illinoisrealtor.org

have forgotten paperwork or materials at the office. Practice, drill and rehearse before you ever show up on the seller’s doorstep, Paprocki says.

PREPARE FOR EVERY POSSIBILITY Just as important as practicing is preparation. Miller estimates that a one-hour listing presentation requires about twoto three-hours of preparation before the appointment.

In her first conversation with potential clients, she establishes what kind of presentation method will work best for them and how they want to receive communications from her.

Ask sellers how they currently get their news and information. Do they have a newspaper delivered to their door or do they prefer to read the latest news on their mobile device?

Figure out how your clients like to digest information and reach out to them that way, Miller says.

That can be more effective than directly asking a seller how they want the comparative market analysis (CMA) since many may have only been through the process of selling a home a few times and aren’t familiar with industry lingo, she said.

Miller still prepares the listing presentation in multiple formats — including paper and multimedia — so she always has a backup.

“If they want a five-minute PowerPoint, I’ve got to nail it.

If they want a 57-page presentation on the “cloud” that they can get from their phone, their iPad or their laptop, I’ve got to nail it,” she said. “I need to know my stuff in order to nail any opportunity I have to make that presentation.”

In order to do that, agents need to take advantage of all of the data tools at their disposal. Use the real time market data available from your local MLS to give sellers a snapshot of the market from local days on market and absorption rates to distressed properties, inventory and bed and bath breakouts, Miller said.

READY, SET, LIST Paprocki, a master trainer with the Real Estate Negotiation Institute, teaches the L.I.S.T. approach (Lead in, Investigate, Show and Sell and Tie down) for developing a solid listing presentation system.

1. Lead In. When you first meet with the seller, lead with what Paprocki calls creating a “safe island.” Lay out what you

will be doing and what the presentation will entail so that they get an idea of the process.

2. Investigation. Ask open-ended questions — or as Paprocki calls them “wopen” questions that begin with a “w” such as who, what, when, where and why — to find out why they are selling and what they expect of the process. Start with more generic questions and then build to the more specific or personal as the seller gets more comfortable. You can also provide the seller with a printed questionnaire. If they see that you ask the same thing of all clients, they might be more forthcoming with their answers, Paprocki says.

3. Show and Sell. This is when you present your company and what you can bring to the table as their agent.

Cover the different agency options, commission policies and fees, legal disclosures and pricing. Paprocki recommends that agents revisit their office policy manual, or the sample office policy manual available from the Illinois Association of REALTORS®, for a refresher on the rules when it comes to listing procedures.

4. Tie down. Wrap everything up by asking for the listing.

“You pull yourself out of the commodity market of agents and into what I call the specialty market of a great agent and you do that with how you show and sell,” Paprocki said.

BUILD A PERSONAL CONNECTION Industry trainer Greg Herder says one key to a winning listing presentation is building a connection with the seller. Focus on the customer and their needs. Listen twice as much as you talk and you’ll find insights into the seller’s motivations that will help you meet their needs.

Too many agents come in with a presentation that puts too much of the focus on them and what they are going to do for the seller. Herder urges agents to take a step back and begin by first working to build a rapport with the seller.

When you arrive, ask the sellers to give you a tour of the home. Put down the paperwork and the notebooks and Greg Herder keep it a conversation that allows the sellers to relax and tell you about their home and its features. Ask what selling will mean to them and their family.

Sellers want to work with agents who understand them. If you build a connection with your clients upfront, it makes the other steps of the process, talking about pricing, commissions, etc., much easier, Herder said.

Six Tips for Your Next Listing Presentation 1. Find out how your client wants to interact with you and then use that method. Maybe they prefer a phone call over an email or would like to see the presentation on paper as well as in a multimedia format.

2. Know your market and your knowledge base.

You may be licensed in Illinois, but your local market or niche is the one you know best.

3. Be over-prepared going into the presentation.

Consumers are savvy, have done their research and will be able to tell if you haven’t done yours. Don’t give them a reason to find another REALTOR® for the job.

4. Be able to talk about yourself and your company. Different companies have different business models. Be able to explain why you have affiliated with yours and what you can do for them.

5. Focus on the client to build a connection. Really listen to your client and talk to them about what they want and expect. It helps you build a connection and level of trust so that you can comfortably talk about the details such as pricing, etc.

6. Finally, be yourself. It will help you build a rapport with the sellers.

Four More Tips Before You Walk in the Door In an IAR webinar, “The Listing Presentation that Works Every Time,” real estate trainer Greg Herder, of Hobbs/ Herder Advertising, shared some strategies that you may not have thought of before: 1. When a client initially calls to make a listing appointment, don’t appear overeager as it can undermine your credibility.

2. Send a pre-listing packet or letter with information about you and your company.

3. When calling to confirm the listing appointment, don’t make the call yourself. If you don’t have an assistant, have another agent in your office call.

4. The presentation starts when you pull up in your car.

Don’t sit inside shuffling papers and getting ready. Get out and walk in front of the house to show that you are taking in the neighborhood.

Here’s a tip Laurie Moore-Moore, founder and CEO of the Institute for Luxury Home Marketing shared with those attending the 2014 IAR Fall Conference & Expo in Chicago: Don’t call it a

listing presentation, call it a marketing consultation appointment. It sends Laurie the message to sellers that you’ll be doing Moore-Moore more than just listing their home.

ILLINOIS REALTOR® October 2014

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GRI Courses II & III Dec. 1-4, 2014 GRI Grad Course Dec. 3-4, 2014 Peoria Marriott Pere Marquette

Early Bird Deadline - November 5 Courses fill-up early and seating is limited.

REGISTER EARLY! www.illinoisrealtor.org/GRI

December 1-4, 2014

Wayne Edwards GRI Grad Course

Stand out from your fellow REALTORS® and earn the most prestigous designation - GRI

Earn the NEW! SRS designation (Seller Representative Specialist)

• Earn 6 hours of CE

• Earn 6 hours of CE

• 45% higher earnings than non-designees

• Celebrate 50 years of GRI - Special Event

• National Instructors

• National Instructors: Bruce Aydt and

GRI Courses II & III

• Just $325 by November 5, 2014

December 3-4, 2014

Lynn Madison • Just $204 by November 5, 2014 Only 225 seats available!

Be one of the first Illinois REALTORS® to obtain the SRS designation!

Bruce Aydt

Mark Barker

Chris Bird

Kim Daugherty

This designation is the premiere credential in seller representation. It is designed to elevate professional standards and enhance personal performance. The SRS Course will redefine your ‘normal’ and reinvent the way you represent sellers.

Tom Lundstedt

Lynn Madison

Marki Lemons Ryhal

Terry Watson

The GRI Graduate Course is designed for those who have already earned their GRI Designation.

Need GRI Course I? Earning Course I credit has never been easier with IAR’s Fast-Track options!

1. Equivalency program or 2. Proficiency exam For details visit www.illinoisrealtor.org/GRI

What Does It Take to

SUCCEED in Real Estate?

By Bernice Ross

The number one question new real estate agents ask is, “What does it take to succeed in real estate?” Use the following 11-point list as your personal guide to real estate success.

No longer a newbie? You can still benefit from revisiting these “back to the basics” reminders.

1. Your six-word job description Your job in real estate boils down to six words: Generate leads; convert leads; close transactions. Many new agents expect their broker to provide leads for them. The truth is you have to generate your own leads.

“Your job isn’t selling houses—it’s finding clients,” said Craig Schiller, a new agent with Baird and Warner in Fox Valley.

Once you generate a lead, the next step is lead conversion. This means obtaining a signature on a listing agreement, a buyer’s represenCraig Schiller tation agreement, or a purchase contract.

The final step is to manage the transaction from contract to close. A common misconception is that agents earn big sums for marketing a listing, locating property for the buyer, and then writing the offer. New agents are often shocked to learn that up to 90 percent of the work occurs after the property enters escrow.

2. Training matters Lynn Madison, the owner of Lynn Madison seminars and an Illinois real estate instructor, emphasizes the importance of obtaining training.

“Find a brokerage that offers good training. Be an education sponge. Many agents choose the wrong managing broker and have to start over with a brokerage that has strong training,” she said.

A Texas Association of REALTORS® study of over 500 new agents supported the Lynn Madison same conclusion: new agents who earned their GRI and had a learning mindset were the most likely to succeed.

3. Three fundamentals to master now Contract mastery is essential. Practice filling out at least one contract daily until you can easily complete all transaction related contracts. You must also be able to explain agency relationships, the types of buyer representation, how earnest money deposits are handled, disclosures, etc.

Second, master the inventory. Most top producers can price a property without checking the MLS. To master the inventory, see as many houses as possible. Visit different subdivisions, learn the different builders, the various styles of houses, the prices, and community characteristics. Use Realtor.com or other online resources to quickly identify values on your mobile device. Use Evernote to track photos, listing information, and other pertinent data and organize it by street or subdivision name.

Third, master the market statistics. When you can quote whether the inventory is increasing or decreasing and how much property values have appreciated or declined, you have instant credibility.

“Your job isn’t selling houses — it’s finding clients.”

— Craig Schiller

ILLINOIS REALTOR® October 2014

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Tracking the amount of inventory on the market is also important because it is the best predictor of market shifts. Six months of inventory or less indicates a seller’s market where there is too little inventory and prices increase. Prospect for sellers. Seven or eight months of inventory indicates a flat or transitioning market with stable prices and steady sales. When there is over eight months of inventory and prices are declining, prospect for buyers. Keep in mind mixed markets are common depending upon price and location.

4. Make setting up your CRM (Client Relationship Management system) a top priority Rebecca Thomson, the Vice President of Agent Development for @Properties and one of NAR’s “Top 30 under 30,” began her career when she was 21. She attributes her early success to attending as much training as possible, having strong systems, consistently prospecting and engaging with other agents.

Setting up your CRM is the first system to develop.

You already have an address book in your phone and/or computer. Top agents normally use a system that also tracks Rebecca when they contacted their clients, Thomson the type of contact they made, as well as providing automated follow up reminders. Commonly used systems include Top Producer, Salesforce and Infusionsoft.

To build your database, ask yourself whom do you know from your past schooling, jobs, place of worship, recreational activities, service providers, as well as your friends and family. Include your Facebook and other social media contacts as well.

Start gathering these names now!

5. Prospecting secrets from agents earning $250,000 per year

REDX (www.theRedX.com) conducted a survey comparing agents who earn $250,000 per year vs. those earning $70,000 per year. Agents earning $250,000 annually prospected at least seven hours per week vs. $70,000 earners who prospected 3.4 hours per week. Prospecting just 3.5 hours more per week resulted in over triple the income!

Places they prospected include their chamber of commerce and place of worship. They also volunteered, knocked on doors, held open houses and engaged in other face-to-face 14 www.illinoisrealtor.org

lead generation activities. Set your goal to add five new people daily and prospect until you do.

6. Where do new agents find their first three deals?

Schiller and Thomson both observed that your sphere and open houses play a critical role in new agent success.

“Your sphere keeps you fed. Stay in regular contact with them,” Thomson said.

The Texas Association of REALTORS® new agent study supported their observations. Fifty-two percent of the new agents generated one of their first three deals from their sphere of influence, 28.1 percent from referrals from another agent or their broker, 17.8 percent from open houses, and 10 percent from taking phone duty.

7. You can’t close a deal alone Clients come and go, but you will work with the other agents in your area for years to come.

“Playing well with others is a must. You can’t close a deal alone. The agent who beat you out for that listing may influence their sellers to select or reject your buyer’s offer based upon your professionalism, your competence and your commitment to getting the deal closed,” Madison contends.

8. Learn from your peers Schiller and Thomson encourage new agents to learn from more experienced agents.

“Learn as much as possible by talking to your peers.

Accompany them on showings. Learn from what they say on appointments. Also, practice your listing presentation before meeting with a seller. When you build trust, provide value, and you know what you’re talking about, they will hire you, even if you’re young,” Thomson said.

9. Adequate capitalization New agents are often unprepared for the $2,000-$3,000 in start-up costs, ongoing membership fees, marketing costs, and other expenses. In fact, even if they sell a house their first day it still takes 60 days before they receive a commission check.

To make sure that you’re adequately capitalized, save until you have the initial start-up costs plus one year of living expenses in the bank. Also, real estate success requires a fulltime effort. Part-timers seldom succeed.

10. Face-to-face is the name of the game

Most Likely to Succeed

Agents lacking face-to-face skills and the ability to confront others when needed, often leave the business because it is too stressful. To be more effective with your clients, ask “how” and “what” questions that uncover what matters to them. Second, always remember, “it’s their house and it’s their decision.” Your role is to provide them with the best information and service possible so that they can make the best decision possible. Use this simple approach to minimize the stress and difficulties you may face.

11. The technology you need Before you worry about the next shiny new real estate app, start with the basics. To compete with experienced agents you must be mobile. This means having a client relationship management system (CRM), using a paperless transaction platform, digital signatures, and a note-taking system such as Evernote.

Use Facebook and LinkedIn to build community and share reviews.

Instagram, Pinterest, and YouTube are excellent free places to market your listings.

Finally, many brokerages and associations offer robust tools and systems that cost their agents nothing. Take advantage of these before spending elsewhere.

There’s a lot to learn. Be patient, take it one day at a time, and remember that nothing happens until you generate a lead.

About the writer: Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, author and trainer with over 1,000 published articles and two best-selling real estate books.

ILLINOIS REALTOR® October 2014

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September 4-6, 2014 • C H I C A G O

NAR President-elect Chris Polychron swears in the 2015 IAR Leadership Team. Photo by Mike Hudson

2015 IAR President Jim Kinney, ABR, CRB, CRS, GRI, speaks to attendees at the Inaugural Gala in Chicago. Photo by Mike Hudson

REALTOR® Tom Krettler gets ready for a session on luxury home marketing by Laurie Moore-Moore on Sept. 6, 2014.

16 www.illinoisrealtor.org

GOP candidate for governor Bruce Rauner is greeted by IAR President-elect Mike Drews and President Jim Kinney before he spoke before Illinois REALTORS ® on Sept. 6, 2014.

REALTOR® Gary Stittgen meets with Illinois Gov. Pat Quinn on Sept. 5, 2014, at the opening session of the Fall Conference & Expo.

Attending the Illinois Association of REALTORS ® Multicultural Summit at McCormick Place in Chicago are from left to right, Manuel Flores, IDFPR Acting Director; Neil Malone, Local Governmental Affairs Director; Gary Clayton, IAR CEO; Rep. Jaime Andrade, Jr., D-Chicago; REALTOR® Sonia Anaya; Rep. Ed Acevedo, DChicago, and Assistant Majority Leader; Rep. Toni Berrios, D-Chicago; Rep. Cynthia Soto, D-Chicago; and Greg St. Aubin, IAR Director of Governmental Affairs.

REALTOR® Mabél Guzmán poses with Elizabeth Dozier, principal of Fenger Academy High School in Chicago. Dozier was a keynote speaker on Sept.

6, 2014.

Inland’s Jonathan Stein with REALTOR® Deena Zimmerman at a commercial panel on Sept. 5, 2014.

REALTORS® Lynn Madison and Piero Orsi talk with those stopping by the Professional Standards booth at the IAR Fall Conference and Expo.

Recap of the Conference (These articles and more can be found at www.IARbuzz.com) Commercial Market Improves; Shifts to Favor Landlords

The commercial real estate market is seeing an uptick and one trend to watch is the shift to a market that is more favorable to landlords.

A panel of commercial real estate professionals discussed the latest trends in the retail commercial market in a session sponsored by the Mainstreet Organization of REALTORS® at the IAR Fall Conference.

Retail shopping center inventory is lower so it has become an issue of supply and demand and that has given landlords more leverage when it comes to setting rents and lease requirements, said JoAnn McGuinness, with Inland Real Estate Income Trust, Inc. Todd Cabanban, of Cabanban, Rubin & Mayberry LLC, said there has been a trend toward more retail growth in the city of Chicago, but less in the suburbs.

One development that will affect commercial real estate is the state’s new medical marijuana law and the state-authorized dispensaries that will open to accommodate it. The panelists said where those dispensaries are allowed and what it means to other tenants will be an issue to watch.

Some upscale properties may begin writing specific exclusions in their leases to prohibit medical marijuana dispensaries and other specific businesses including video poker centers or Crossfit gyms from locating in their properties, the panelists said.

Time Management Tips to Get More Done in Your Day

Get more done in your day by figuring out what is important and doing it early in the day, real estate agent and trainer Ashton Gustafson told IAR conference attendees. In his time management session at the IAR Fall Conference & Expo, the Texas REALTOR® said he gets the bulk of his work day done by 11 a.m.

Not only does he avoid the “decision fatigue” that can make it harder to make the best decisions as the day goes on, but he focuses on what’s important — real estate lead generation.

“The reason people have success in real estate is lead generation,” he said at the session sponsored by PNC Mortgage.

Gustafson uses what he calls the “60 Daily Points of Rhythm.” It is a daily checklist that he has created that reminds him to do

his top lead-generating activities – making 25 phone calls, sending 25 emails and writing five handwritten notes every day.

That earns him 55 points and other tasks — showing at least two homes to a client or writing an offer — earn extra points. The goal is to earn at least 60 points each day. Planting these “seeds” of lead generation will create business later, he said.

The key to lead generation is that it has to be consistent and persistent, Gustafson said. He uses a variety of social media to connect with clients but agents need to use it to work for them and not the other way around.

He pre-schedules as many Facebook and Twitter posts as he can and for his lead generation phone calls, he uses a service called Slydial which sends calls directly to a person’s voicemail. He uses Evernote to track his notes and materials.

But Gustafson reminded attendees that while technology can help agents get work done, what often makes the biggest difference with clients is the personal and human touch that comes from a note or phone call.

Multicultural Summit Takeaways

The Latino population is a major player in the Illinois and U.S. economies and housing markets, but how much do you know about this diverse and growing segment? Here are ten takeaways from the various session speakers at the IAR Multicultural Summit in Chicago Sept. 4, 2014.

1. Twenty-two percent of foreign investment buyers in the U.S. come from Latin America. Illinois ranks No. 9 when it comes to all foreign investment buyers. – Jeff Hornberger, National Association of REALTORS® 2. First- and second-generation Latino buyers often approach the homebuying process differently. The first-generation values homeownership, is often self-employed, likes to deal face to face, is loyal and isn’t afraid to take on a home that needs work.

– REALTOR® Joe Castillo 3. Second-generation Latino buyers (in the Millennial age range) prefer a newer home, may get a gift of a down payment from family members, are savvy about first-time homebuyer programs and consider Facebook and mobile technology useful tools in their search.

– REALTOR® Joe Castillo 4. Immigration reform could open the door to homeownership for more Latinos.

As many as 3 million currently undocumented immigrants would be potential homebuyers if

they were allowed to seek legalization.

– Joe Nery, principal Nery & Richardson 5. Within the last three years, there were 1.2 million new households formed and of those, 52 percent were led by a Latino head of household. – Joe Nery 6. Unlike previous trends, the majority of the U.S. Latino population growth comes from U.S.-born Latinos and not immigrants.

– Sylvia Puente, Latino Policy Reform 7. While the foreclosure outlook has improved in many housing markets, it is taking longer to turn around in the Latino sector.

– Sylvia Puente 8. There are four challenges to financing for the Latino market: low appraisals or property conditions, issues with citizenship status, the large number of self-employed individuals and the trend of having cash on hand.

– Marc Hernandez, vice president with First Merit Bank 9. If you are working with clients who are buying in Latin America or other foreign locales, be aware of the additional costs (of having documents translated,etc.) and local regulations that may apply. – REALTOR® Michael Bauknecht 10. Financial literacy is one of the key factors in keeping people in their homes. Educating potential Latino buyers about the buying and financing process is critical. – REALTOR® Mabél Guzmán

Matt Tenney (above) and Ashton Gustafson (left) were featured speakers at the IAR Fall Conference and Expo in Chicago.

Photos by Mike Hudson

ILLINOIS REALTOR® October 2014

17

THANK YOU 2014 IAR Fall Conference & Expo EXHIBITORS ADT Security Services www.adt.com

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CF Funding Corporation www.cffunding.com

Homes.com www.homes.com

Chase Mortgage Banking www.chase.com/mortgage

House of Magnets www.houseofmagnets.com

Chicago Agent Magazine www.chicagoagentmagazine.com

IAR Information Technology www.illinoisrealtor.org

Chicago Association of REALTORS® www.chicagorealtor.com

IAR Legal Services www.illinoisrealtor.org/legal

Chicago Title www.cmetro.ctic.com

IAR Licensing & Training Center www.illinoisrealtor.org/education

Chiro One Wellness Centers www.chiroone.net

IAR Professional Standards www.illinoisrealtor.org

CityBlast.com www.cityblast.com

IAR REALTOR® Store http://shop.illinoisrealtor.org/

Commission Express www.commissionexpress.com

IL Chapter of NAHI www.illinoisnahi.org

Cookie Lee Jewelry www.cookielee.biz/wendycampbell

IL CRS Chapter www.illinoiscrs.com

Credit OnTrack Solutions www.creditotsolutions.com

IL Dept. of Financial & Professional Reg. - Division of Real Estate www.idfpr.com

CUTCO Closing Gifts www.cutcoclosinggifts.com

IL Women’s Council of REALTORS® www.illinoiswcr.org

D.R. Horton www.drhorton.com/chicago

Illinois Housing Development Authority www.ihda.org

Inland Home Mortgage www.inlandhomemortgage.com

RE/MAX Northern Illinois www.illinoisproperty.com

Joan’s Trophy & Plaque Co www.awardsnow.com

ReachLocal www.reachlocal.com

Landmarks Illinois www.landmarks.org

Real Estate Educational Foundation www.ilreef.org

Liberty Mutual Insurance www.lmreferralprogram.com/ILconference

Real Pro EandO www.realproeando.com

Listingbook www.listingbook.com

RealKISS.com www.realkiss.com

Lowen Sign Company www.lowensign.com

Realtor.com www.realtor.com

Mainstreet Organization of REALTORS® www.succeedwithmore.com

REALTOR® Association of the Fox Valley, Inc. www.rafv.com

Midland IRA www.midlandira.com

REALTORS® to the Rescue www.realtorstotherescue.org

Midwest Real Estate Data www.mredllc.com

Realty Executives of Illinois www.realtyexecutives.com

Midwestern Solutions www.utopiagear.com

Referral Exchange www.referralexchange.com

Mold Solutions www.moldchicago.com

REGIT, Inc www.regitinc.com

Move for Hunger www.moveforhunger.org

RPAC www.rpacnow.com

NACHI Chicagoland www.nachichicago.com

RPR - Realtors Property Resource www.blog.narrpr.com

National Association of REALTORS® www.realtor.org

RVOICE www.illinoisrealtor.org/advocacy

Neighborhood Loans www.neighborhoodloans.com

ShowingTime www.showingtime.com

North Shore-Barrington Association of REALTORS® www.nsbar.org

Sprint www.sprint.com/nar

Oakley Signs & Graphics www.oakleysign.com

Sweet Secrets Chocolate www.sweetsecretschocolate.com

One Mortgage Inc www.onemortgageinc.com/palatine

Top Brands, Inc www.top-brands.com

OneSource www.osconnects.com

Tropical Naples Homes www.tropicalnapleshomes.com

Paxem, Inc & Elderwerks www.paxem.com

US Bank Home Mortgage www.usbank.com/mortgage

PlanOmatic www.planomatic.com

US Exterior www.usexterior.com

PNC Mortgage www.pncmortgage.com/agentalliance

Visalus www.mikecarver.myvi.net

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Wells Fargo Home Mortgage www.wfhm.com

Professional Radon Systems www.proradon.com

Wintrust Mortgage www.wintrustmortgage.com

Proper Title www.propertitle.com

Your House Real Estate Academy www.yourhouseacademy.com

Radon Detection Specialists, Inc. www.radondetection.net

ILLINOIS REALTOR® October 2014

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LEGAL UPDATE Elizabeth A. (Betsy) Urbance | IAR Legal Hotline Attorney; Associate, Sorling Northrup Attorneys

BPOs AND CMAs TO BECOME LICENSED ACTIVITIES UNDER THE ILLINOIS REAL ESTATE LICENSE ACT OF 2000 Public Act 98-1109, a product of the last legislative session, was signed by Gov. Pat Quinn on Aug. 26, 2014 and the provisions will become effective on Jan. 1, 2015. This bill amends the RELA in that it adds broker price opinions (BPOs) and comparative market analyses (CMAs) to the list of licensed activities under the RELA Section 1-10 definition of Broker. The Illinois Association of REALTORS® (IAR) Legal Services Team has created a set of Questions and Answers to help you understand what these amendments might mean to you in your real estate brokerage practice.

Q What is the definition of BPO? A A BPO is defined under RELA as an “estimate or analysis of the probable selling price of a particular interest in real estate, which may provide a varying level of detail about the property’s condition, market, and neighborhood and information on comparable sales.” (Section 1-10 RELA) This activity will only be considered a BPO if it is paid for separately and not in the usual course of listing the property where one commission or payment is made at the conclusion of the sale or lease transaction.

Q What is the definition of a CMA? A A CMA is an “analysis or opinion regarding pricing, marketing, or financial aspects relating to a specified interest or interests in real estate that may be based upon an analysis of comparative market data, the expertise of the real estate broker or managing broker, and such other factors as the broker or managing broker may deem appropriate in developing or preparing such analysis or opinion.” (Section 1-10 RELA) Once again, just as in the case of the BPO, it is only considered a CMA if it is paid for separately and not in the usual course of listing the property where one commission or payment is paid at the conclusion of the sale or lease transaction.

Q Why might this information be important to

activities under the RELA section 1-10 definition of “Broker.”

Therefore, any payment received by a licensee in exchange for creating a BPO/CMA must be paid to the licensee only through that licensee’s sponsoring brokerage company. The licensee can no longer be paid for these services directly. Prior to the effective date of the amendments, if a BPO/CMA was being created for some purpose other than in an effort to obtain the consumer’s real estate brokerage business, i.e. to provide an REO asset manager with a “drive-by” opinion of value or BPO, that service could be paid for directly to the licensee as opposed to paying for this through the licensee’s sponsoring real estate brokerage company.

NOTE: Due to the addition of BPOs/CMAs to the list of licensed activities under the RELA, the response to this question changes previous advice given to IAR members!

Previously, we would have advised that the licensee establish for what purpose the BPO was being performed. If the BPO was being done in the hope of obtaining a listing or a buyer/ tenant client, then it would fall under RELA and the licensee would be compensated through his/her sponsoring broker.

On the other hand, assuming the BPO was not a full blown appraisal but was being performed for someone who was not seeking any other brokerage type services, we said the licensee was acting outside RELA and could be compensated directly (depending upon the sponsoring broker’s company policy).

See http://www.illinoisrealtor.org/legal/issues/appraisal

Q What are the purposes for which a BPO or CMA

may be completed?

A Licensees may prepare BPOs/CMAs for an existing or potential buyer, seller, lessor or lessee, for a third party engaged in due diligence, i.e. an REO asset manager; or, for an existing or potential lienholder or other third party for a purpose other than the primary basis to determine the value of real estate for a mortgaged loan secured by the subject real estate. [Section 10-45(a) of RELA]

know?

Q What must be included in a BPO/CMA?

A One major reason is that BPOs/CMAs, when done for

A It must be in writing on paper or electronically and

separate compensation, are now clearly considered licensed

22 www.illinoisrealtor.org

SHALL include the purpose for which it is being performed; a brief description of the interest in real estate that is the

Download the latest issue of D.R. Legal News at www.illinoisrealtor.org/ DRlegalnews for an article on medical marijuana and real estate.

subject of the BPO/CMA; a brief description of the method used; assumptions or limiting conditions; disclosure of any licensee interest in the BPO/CMA subject property; name and license number of the licensee who prepared the BPO/CMA; a statement that the BPO/CMA is NOT an appraisal; AND, any other relevant information deemed appropriate by the licensee.

[Section 10-45(b) of RELA]

Q May a leasing agent perform a BPO/CMA? A No. According to Section 10-45 only broker and managing broker licensees may prepare BPOs/CMAs. Leasing agents are not mentioned in Section 10-45.

Q Are there any other requirements to be aware of

when creating BPOs/CMAs? A Yes, if you are a REALTOR®, there are some additional requirements set forth under the REALTOR® Code of Ethics, Article 11. These additional requirements include the following: • Be knowledgeable about the subject property; • Have access to information and resources related to the property; • Be familiar with the area and if not, make a statement that you are not familiar with the area; • Basis for the opinion, including market data; • Disclosure whether the REALTOR® conducted a physical inspection of the exterior; • Disclosure whether the REALTOR® conducted a physical inspection of the interior; AND • A statement as to any conflict of interest there may be on the part of the REALTOR®, i.e. a financial or ownership interest in the subject property.

NOTE: The Real Estate Appraiser Licensing Act of 2002 (Appraiser Act) was also amended regarding BPOs/CMAs. The Appraiser Act includes the same definitions of BPOs and CMAs that are contained in RELA. The Appraiser Act specifically excludes real estate licensees who are conducting BPOs/CMAs in accordance with RELA Section 10-45 from a requirement to have an appraiser’s license.

• An Illinois licensed real estate appraiser would need a real estate broker or managing broker license to do a BPO/ CMA for compensation.

• A real estate broker or managing broker licensee would need an appraiser’s license to create a real estate appraisal for compensation.

BEWARE OF SCAMS This is just a reminder that it is always important to be aware of scams that are out there. These scams seek to get money while at other times they are seeking personal and financial information from victims. They are usually being done completely over the Internet and sometimes they involve phone calls too. Here are some fact situations that are still out there: • The “rental scam” where a “for sale” listing is scraped or copied and placed on another website as being for rent. The scammer is trying to get prospective tenants to give money to secure the lease.

• Hijacking or intercepting wired funds. This is more of a “hacking” than a scam, but the perpetrator attaches a virus on the sender’s computer that diverts the wired funds to the hijackers account. (reported in the July 2014 Illinois Bar Journal by Janan Hanna) • The “email only relationship.” The scammer sends a bogus check saying they want to purchase real estate. The check could be placed in an attorney’s trust account or even a real estate brokerage escrow account. The scammer seeks a return of less than the total amount of the funds on deposit.

The victim finds out later that the check was a fake. (reported in the July 2014 Illinois Bar Journal

by Janan Hanna) • More “phishing” scams, where the scammer seeks personal information. A recent scam reported in the St. Louis Post Dispatch by Robert Patrick on July 31, 2014, stated that scammers allegedly sent emails telling the victims that they have been assigned to jury duty so they should report in to the address given and provide personal information.

These are a few of the many scams that are out there.

It is prudent to try to know who you are really dealing with.

If it sounds too good to be true, it probably is. If someone is seeking money or personal information via the Internet or over the phone and you have no prior relationship, check them out completely before doing any sort of business or giving information in these types of situations. Sometimes, you might even “Google®” the fact situation to see if there is information on the scenario or the persons involved.

If you believe you or someone you know is a victim of a scam, notify the police, the Illinois Attorney General’s office, any regulatory body that might be concerned, and possibly the Federal Bureau of Investigation (FBI) for Internet crimes.

A website address where you can report alleged cybercrimes is www.ic3.gov/default.aspx.

ILLINOIS REALTOR® October 2014

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Polishing Your Negotiating Skills How to hone your negotiating tactics and improve your chances of coming out on top during even the toughest negotiating situations

As one of Realty Executives’ top agents nationwide, Christine Wilczek knows the value of solid negotiating skills. In fact, this broker-associate with Realty Executives Elite in Lemont says that for any agent to be considered a true expert in his or her field, being able to negotiate effectively is a “must-have” skill.

Whether an agent is negotiating on her own behalf (to come to an agreement on a commission level for a particular property, for example) or on the client’s behalf (to reach a target buying price for a home, for instance, or come to an agreement regarding sales terms), agents continually find themselves making demands, concessions and compromises to reach the end goal of closing the deal.

Data from the National Association of REALTORS®’ 2013 Profile of Home Buyers and Sellers proves this point. According to NAR, when working with an agent to close a real estate deal, 12 percent of homebuyers most wanted their agents to help with price negotiations. Those consumers who leave the negotiating up to their agents are generally happy with that decision. According to the survey, 44 percent of all buyers said their agents negotiated better sales contract terms, and improved buyers’ knowledge of search areas.

The More Data, the Better According to Wilczek, winning financial negotiations during the sales process can usually be traced back to good, reliable data across a number of key points. “The more data you equip yourself with as an agent, the better you’ll be able to support your client’s position in the process,” says Wilczek, whose favorite data points include comparable property sales, area absorption rates, depreciation levels, typical list prices, sales price ratios (in the subject area), and actual price points. “There’s a direct correlation between the amount of data you have at your fingertips and the odds that you’ll come out on top during the negotiation phase.”

The problem, says Wilczek, is that many agents ignore this step and instead rely on their own knowledge and presentation skills to make up for the dearth of data. “If you’re truly working in the best interest of your client, you should have a tremendous amount of data to support your negotiating position,” she reiterates. “Don’t just pull numbers from the sky and expect everyone to believe and understand where you’re coming from.

Base your assumptions on real market numbers, do the actual analytical research, and then show everyone the results of that research during the negotiation process.”

When making offers on properties, Wilczek says another technique she uses during the negotiation process is to write detailed letters on behalf of her clients. In those letters, she highlights the strength of the offer (using the data gathered, of course) and explains her client’s interest level and position. Once her client signs off on the letter, Wilczek presents it to the cooperating broker on the deal. “This simple step really goes a long way in 24 www.illinoisrealtor.org

By Bridget McCrea

“There’s a direct correlation between the amount of data you have at your fingertips and the odds that you’ll come out on top during the negotiation phase.” — Christine Wilczek helping to cement our position and convey our message,” says Wilczek, “in a way that a verbal offer can’t match.”

Putting the Puzzle Together As REALTORS® like Wilczek already know, successful negotiation is part science and part art.

According to NAR, the science of negotiation relies on the research used to back up claims and offers of fair market value, and to assess the psychological and sociological framework within which the negotiation operates. The art of negotiation is in understanding adequate communication, perception, and the many puzzle-like concessions that fit together to build a successful negotiation.

One of the best ways to position yourself and/ or your client for a successful negotiation experience is through advanced preparation. Arm yourself with the necessary statistics, data and real estate market information that backs up your points and supports your position. Know the fair market price for the home and determine a “bargaining range” that spans highest and lowest prices upon which you are willing to settle, NAR advises. According to NAR, sharing your research findings with the other parties that are involved in the negotiation process “will also help to convey your thought process and rationale.”

And while it may sound counterintuitive, it actually helps to set aside any thoughts of “closing the real estate deal” when negotiating with parties on the other side of the deal. Instead, says John Mayfield, focus on the task at hand (whether it’s negotiating your commission, coming up with an agreeable way to handle necessary property repairs, etc.) and add up your little “wins” as you work your way through the process.

“A lot of times agents avoid too much negotiating because they don’t want to derail the deal,” says Mayfield, a real estate broker, speaker, and author of 21 Mistakes Real Estate Brokers Make and How to Avoid Them.

To avoid this trap, he says agents should remember that even when the haggling gets challenging, the bottom line is that sellers really do want to sell/relocate and buyers want to move into new homes. “We tend to forJohn get that when we’re wrapped up in the dealMayfield making process, trying to get both sides to see eye-to-eye,” says Mayfield, who advises agents to maintain an outer level of confidence when stating their positions (even if those butterflies are running rampant on the inside!) and to stand their ground – especially when negotiating commissions. “That’s an issue that you have to get off the table very quickly,” says Mayfield, “by explaining exactly what you do for your commission and why you deserve the level that you’re asking for. Don’t allow that point to linger throughout the process of selling the home.”

When working with buyers in certain types of market conditions, Mayfield encourages clients to increase their earnest money levels in order to gain a better bargaining position. This shows the seller that the potential buyer is willing to put “more skin in the game,” so to speak, and positions the client as sincere and financially stable. Having a mortgage pre-approval letter in hand also helps on that front, says Mayfield, who tells buyers to get that part of the process taken care of early – before making any offers.

Of course, REALTORS® don’t negotiate on price alone.

“Once you agree on a price you’re still going to have to negotiate repairs, radon mitigation, mine subsidence (a challenge that surfaces regularly in her area of the state), and other issues down the line,” Hamilton points out. To prepare for that “second phase” of negotiations, Hamilton keeps it in the back of her mind when she’s negotiating the financial aspect of the deal. “Even if it’s not time to start talking about these additional negotiating points, it’s important to remember them when you’re discussing money at the outset.”

Ultimately, all of the REALTORS® interviewed for this article agree that negotiating falls under the larger “problem solving” umbrella and, as such, is a skill that every agent should continually hone and polish. “As agents, we all need to be able to solve problems effectively and efficiently in order to get the deal to the closing table and the keys exchanged,” says Hamilton. “Negotiating is just one piece of the overall puzzle.”

Breaking Down the Numbers When Sandra Hamilton, a broker-associate with RE/MAX Professionals in Springfield, sits down to educate her clients about the real estate sales process, she knows that many of them will be dealing with a high level of emotions, anxiety and even frustration. “A home purchase is one of the biggest financial decisions that anyone has to make, so naturally there are going to be emotions involved,” says Hamilton, who also knows that emotions are one element that should be kept out of the negotiation process.

This puts agents in the position of having to Sandra be calm, cool and collected advisors – a stance Hamilton that isn’t always easy to maintain.

One way Hamilton manages to walk this tightrope is by explaining to anxious buyers that a $5,000 difference in 017Remax 2012.jpg sales price translates into a roughly $50 increase in monthly mortgage payments. So while the four-figure difference may sound monumental to the client, in reality it will only impact a monthly budget by that $50 sum. “People really tend to get caught up on the dollar amount of the sale. And while I want my buyers to get the best deal possible,” says Hamilton, “when a seller is negotiating hard and things come down to just a few thousand dollars, it helps to be able to explain the long-term impact of such concessions.”

5. Anticipate the other parties’ comments and prepare your responses.

12 Easy Ways to Improve Your Negotiation Skills In its online Negotiation Tool Kit, NAR gives these simple tips that agents can use to master the art of negotiating: 1. Learn everything you can about the situation, the issues and the participants.

2. Understand all the participants’ needs and interests.

3. Set reasonable goals for what you hope to achieve during the negotiation and rank them by priority.

4. Work within a range that includes minimums, targets and maximums.

6. Remain calm, pleasant and unflappable.

7. Build trust by clearly stating what your client wants and respecting what the other parties want.

8. Create an atmosphere of joint problem solving that focuses on the benefits to all parties.

9. Remain flexible and open to a range of options.

10. When other people speak, listen attentively and hear them out fully.

11. Use sympathetic comments, gestures and facial expressions to smooth over difficult situations.

12. Always underpromise and overdeliver.

About the writer: Bridget McCrea is a business, real estate and technology writer in Clearwater, Fla. She can be reached at bridgetmc@earthlink.net.

ILLINOIS REALTOR® October 2014

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VOTE on Nov. 4th!

75% of Illinois REALTORS® are registered to vote.

ARE yOu? Register Online https://ova.elections.il.gov www.elections.il.gov/InfoForVoters.aspx • Find out if you are registered • Find your polling place • Absentee voting information • Early Voting Oct. 20 - Nov. 2

www.RPACnow.com Disclosure: Contributions are not deductible as charitable contributions for federal income tax purposes. The Illinois REALTORS® Political Action Committee (RPAC) collects contributions from members of the National Association of REALTORS (NAR) for political activities. A portion of each contribution will be used for state political activities; at least 30% will be used for federal campaign purposes. The federal portion will be charged against an individual's federal contribution limits under 2 USC 441a. Contributions are VOLUNTARY and refusal to contribute does not affect membership rights. A member may contribute more or less than the suggested amount. A copy of our report filed with the State Board of Elections is (or will be) available on the Board's official website www.elections.il.gov or for purchase from the State Board of Elections, Springfield, Illinois.

Mike Scobey |

Assistant Director, Advocacy and Local Issues

REALTOR® ADVOCACY AT THE LOCAL LEVEL: ‘CRIME-FREE’ HOUSING PROPOSALS WARRANT SCRUTINY

I

n the last ten years, several Illinois municipalities have passed what is commonly known as the “Crime-Free Housing Ordinance.”

The stated purpose of these ordinances is to help prevent criminal activities in rental housing. But some of the methods used by municipalities have broadly included: • Licensure of the owner and/or the agent’s owner as well as licensure of the individual rental units. Some municipalities have given themselves the discretion to revoke licenses if the property becomes a “criminal nuisance property.”

• Requiring the owner/agent to attend a class on crime prevention in rental housing.

• Inspection of rental properties.

The Illinois Association of REALTORS® (IAR) objects to these types of provisions and has attempted to work with municipalities to ensure the new requirements are not a de facto form of punishment against landlords who could not reasonably be expected to prevent the crime. REALTORS® believe that a well-crafted program can include the following components:

MUNICIPAL IDENTIFICATION OF ‘CRIMINAL NUISANCE PROPERTIES’

Rental properties where there are recurring criminal activities can and should be identified. Some of these properties may be in need of special police attention or assistance.

After identification, police can work with the owner to take steps to help reduce future criminal activities.

Too often these “crime-free” ordinances treat ALL property owners as if crimes have already taken place on the properties. ALL owners must attend the municipalities’ “crime-free” class. ALL owners must be licensed. ALL owners must evict the tenant where a crime has taken place even though it’s unclear if that tenant is the perpetrator. This is not an effective targeting of resources nor does it respect property rights of owners. Police resources and other municipal resources should focus on properties with frequent crime.

MUNICIPAL REPORTING TO PROPERTY OWNERS ON POLICE REPORTS

When a crime occurs on a property, the police should inform the property owner. While this may seem like a common-sense policy, there are many municipalities in Illinois

where this does not occur. If the owner knows of an incident, the owner can be more vigilant and can take steps to make the property safer and less likely for crime to occur (enhanced security and lighting for example). An automated reporting system can work in tandem with a building registration requirement. With registration, the municipality can collect essential information from the owner (or agent) to establish a point-of-contact for each residential rental building.

PROTECTION FOR INNOCENT LANDLORDS

REALTORS® also recommend that ordinances include an “affirmative defense” for a property owner who cooperates with the police and could not prevent the criminal behavior of those residing in or visiting the property. In addition, a “crime-free” program should never penalize a tenant or an owner for making calls for police service.

Bottom Line: REALTORS® do not oppose measures to help prevent crime. But we do favor sensible approaches— at the state and local level— that are targeted, effective and respect real property rights.

Two New Brochures from RVOICE RVOICE has created two new industry brochures for you to share with your clients: Requirements for Septic Systems Owners This brochure explains recent changes to the Private Sewage Disposal Code and how these changes affect property owners served by a septic system. You’ll also find a summary of changes regarding maintenance and record-keeping requirements for septic system owners.

Commercial Real Estate Broker Liens This brochure provides basic information on this state law which gives real estate brokers the right to a lien on commercial real estate to secure fees and commissions due to them. www.illinoisrealtor.org/rvoice/downloads

ILLINOIS REALTOR® October 2014

27

2014 LEGISLATIVE

SCORECARD

#PowerofR 28 www.illinoisrealtor.org

The Illinois Association of REALTORS® team of lobbyists analyzed the 3,710 bills introduced in the 2014 spring session of the Illinois General Assembly. Of them, 226 merited special attention because they could affect homeowners, the REALTOR® business or private property rights. IAR’s advocacy team and our 41,000 members worked up until the session’s end on May 31 to stop bad policy, alter flawed legislation, advocate IAR initiatives and promote the interests of our membership, their clients and customers.

Here’s a look at 14 notable victories in the General Assembly:

1.

Protecting REALTORS® who do BPOs/CMAs

2.

Clear and fair formula established for calculating the amount to be paid by purchases of foreclosed condominiums

The IAR initiative SB 3044 (Haine/Rita) protects the ability of REALTORS® to do a Broker Price Opinion (BPO) and Comparative Market Analysis (CMA) for a fee, and ensures that these activities are regulated under our license law, rather than the appraiser license law. The bill made clarifying and clean-up changes to the Real Estate License Act AND added language establishing specific requirements and definitions regarding BPOs and CMAs. Signed by the Governor (P.A. 98-1109).

Effective January 1, 2015.

A hard-fought IAR initiative SB 2664 (Hastings/Yingling) reforms the Illinois Condominium Property Act to create a clear and fair formula for calculating the amount to be paid by purchasers of foreclosed condominiums and will give those purchasers improved notice of the obligation. The bill places a cap of no more than the unit’s unpaid regular monthly assessments for the nine-month period immediately preceding the judicial foreclosure. Current law frequently includes special assessments, fines, late charges and unlimited attorney’s fees incurred and unpaid by the previous owner. Passed the Senate and the House.

Governor issued amendatory veto. Possible fall session issue.

3.

4.

L AW

PA S S E D RY O T A ND AME VETO

State Fire Marshal pledges to work within the General Assembly on any new fire sprinkler laws

After a proactive legislative effort (HB 4609) to prohibit the State Fire Marshal from imposing a sprinkler mandate by administrative rule, the Fire Marshal issued the following statement at the end of the spring session: “As long as I am Fire Marshal, I intend to work with local government officials, public safety officials, and all stakeholders to pass any new sprinkler laws through the General Assembly.” Statement issued May 30. 2014; House Bill 4609 did not advance.

New Division of Real Estate Created at IDFPR

On March 31, 2014 Governor Pat Quinn filed Executive Order 14-03 to reorganize the Illinois Department of Financial and Professional Regulation (IDFPR) to create the Division of Real Estate. The Division will be run by the Director of Real Estate, a gubernatorial appointee subject to approval from the Senate. We salute Governor Quinn for implementing this reorganization, which will help to ensure TIVE a diligent, fair, efficient, and responsive real estate enforcement division at the IDFPR. U C E X E Effective May 30, 2014.

ER

ORD

2014 LEGISLATIVE

SCORECARD The Voice for Real Estate in Illinois | www.illinoisrealtor.org

ILLINOIS REALTOR® October 2014

29

5.

6.

Stopped several bills granting home rule status to non-home rule municipalities A series of bills introduced at the request of the municipal lobby this year which sought to statutorily grant home rule powers to non-home rule municipalities WITHOUT voter approval (as required by the Illinois Constitution) did not advance due to our strong opposition. HB 3758 (Cabello), HB 5329 (Pritchard) and SB 3111 (Holmes). No bills passed.

Stopped several bills that would add unnecessary costs to property owners

IAR STRONGLY OPPOSED AND STOPPED measures that would have imposed unnecessary mandates this spring session. HB 3730 (Osmond) created the Vertical Construction Masonry Composition Act to mandate that all vertical commercial construction include masonry construction for at least 15% of the building’s components. HB 5647 (Jakobsson) created the Residential Weather Radio Safety Act to require contractors building any type of residence to install a weather radio within the residence. HB 3723 (Arroyo) and an amendment to HB 4125 (Arroyo) both amended the Residential Real Property Disclosure Act to mandate ALL sellers to have the sewer line from the residential property to the sewer main or septic tank inspected by a licensed plumber using video camera inspection technology. No bills passed.

DEA

7.

8.

DEAD

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Seller Disclosure form update

Item #6 on the “seller disclosure” form related to material defects in walls and floors will specifically include windows and doors. SB 2597 (Bertino-Tarrant/Walsh) was introduced following a recent Appellate Court case. IAR was neutral on the bill.

Signed by the Governor (P.A. 98-754). Effective January 1, 2015.

L AW

Getting vacant homes back on the tax rolls

An initiative of the Illinois Housing Development Authority, SB 336 (Trotter/Turner), SUPPORTED by IAR, will provide the requisite tools to local governments throughout the state to get vacant homes back on the tax rolls.

This property tax assessment freeze will give incentives to home buyers OR investors to undertake costly rehabilitation efforts in targeted areas. Signed by the Governor (P.A. 98-789). Effective January 1, 2015.

L AW

9.

Protection for businesses damaged by tornadoes

SB 3259 (Frerichs/Hays) added a new section to the Illinois Property Tax Code to provide tax breaks for qualified commercial and industrial properties that need to be rebuilt following a tornado.

Signed by the Governor (P.A. 98-702). Effective July 7, 2014.

L AW

10.

Disclosures for commercial leases stalled

11.

Stopped unreasonable municipal power to declare property “abandoned”

A concept first floated last fall that sought to impose new and unnecessary disclosure requirements for commercial leases was never called for a vote. IAR opposed the idea. HB 5396 (Farnham).

Did not pass.

HB 5829 (Moffitt) would have allowed municipalities to petition the circuit court to have property declared abandoned if the corporate authorities of the municipality have abated a code violation found on the property more than three times within a 12-month period.

The bill was never called for a vote due to our STRONG OPPOSITION. Did not pass.

DEAD

DEA

D

2014 LEGISLATIVE

SCORECARD 30 www.illinoisrealtor.org

The Voice for Real Estate in Illinois | www.illinoisrealtor.org

2014 LEGISLATIVE

12.

13.

SCORECARD

Financing manufactured homes is now easier

HB 5938 (Beiser/Koehler), an IAR-supported initiative of the Illinois Bankers Association, will establish a voluntary formal method for legally converting a manufactured home to real property when it is or will be permanently affixed to land. This is intended to convert manufactured homes from personal property to real property to make it easier for homeowners to get financing. Signed by the Governor (P.A. 98-749). Effective July 16, 2014.

L AW

Reducing the number of local governments makes local government more efficient Illinois holds the record on the number of local government units, and IAR was happy to support the legislative efforts to reduce the number of local units.

HB 5785 (Franks/Biss) gives the governing boards of specified local districts the authority to dissolve and have their functions consolidated by another local unit. Signed by the Governor (P.A. 98-1002). Effective August 18, 2014.

L AW

14.

Secured changes to the Lead Poisoning Prevention Act to protect real estate transactions and eliminate certain inspection costs

House Bill 5410 (Gabel/Mulroe) amends the Lead Poisoning Prevention Act to make various changes, suggested or required, to be made in order for the state to remain eligible for federal assistance in enforcing the law pursuant to federal guidelines. The measure in its final form did NOT contain provisions from the introduced version that were opposed by IAR. Those provisions would have prohibited a property owner from selling or leasing their property if a mitigation order had been issued regarding the premises, and would have expanded the building inspection provisions if a person living in the building screened positive in a lead assessment, or had an elevated blood lead level. Signed by the Governor (P.A. 98-690). Effective January 1, 2015.

L AW

Learn more about the 226 bills IAR’s lobbyists tracked in efforts to protect your business.

www.IARactioncenter.org

FOR STRATEGY

E

LEGISLATIV

SUCCESS

=

RPAC always has your business interests in mind.

Invest today www.RPACnow.com Contributions are not deductible as charitable contributions for federal income tax purposes. The Illinois REALTORSÂŽ Political Action Committee (RPAC) collects contributions from members of the National Association of REALTORS (NAR) for political activities. A portion of each contribution will be used for state political activities; at least 30% will be used for federal campaign purposes. The federal portion will be charged against an individual's federal contribution limits under 2 USC 441a. Contributions are VOLUNTARY and refusal to contribute does not affect membership rights. A member may contribute more or less than the suggested amount. A copy of our report filed with the State Board of Elections is (or will be) available on the Board's official website www.elections.il.gov or for purchase from the State Board of Elections, Springfield, Illinois.

IAR Licensing & Training Center Real Estate Licensing & Continuing Education The IAR Licensing & Training Center is your TRusTed souRCe for state-approved education.

2015

MANAGiNG BrOKer LiCeNSe RENEWAL

iLLiNOiS MANAGiNG BrOKerS...

Here’s what you need to renew your license BY ApriL 30, 2015.

Managing Brokers first licensed after Feb. 1, 2013:

Managing Brokers licensed prior to Feb. 1, 2013:

Managing Brokers licensed after Feb. 1, 2015:

You will need to have taken 12 hours of CE between May 1, 2013 and April 30, 2015.

You will need to have taken 24 hours of CE between May 1, 2013 and April 30, 2015.

* YOU DO NOT NeeD TO reNew iN 2015.

The 12 hours must include a minimum of 6 hours of Core (3 Core A and 3 Core B) and a maximum of 6 hours of elective credit.

The 24 hours must include 6 hours of Core (3 Core A and 3 Core B), a maximum of 6 hours of elective credit, and 12 hours Broker Management CE (mandatory 12-hour interactive course).

Submit your renewal application with the $150 State of Illinois licensing fee to the Illinois Department of Financial & Professional Regulation (IDFPR)

by April 30, 2015. www.idfpr.com

Your managing broker license renewal deadline is April 30, 2017.

Submit your renewal application with the $150 State of Illinois licensing fee to the Illinois Department of Financial & Professional Regulation (IDFPR)

by April 30, 2015. www.idfpr.com

*Sec. 5-70 (d) A person receiving an initial license during the 90 days before the renewal dates shall not be required to complete the continuing education courses provided for in subsection (b) of this Section as a condition of initial license renewal.

Illinois licensed attorneys with an “active” attorney registration are exempt from completing continuing education hours, but must submit the required renewal fee and application to the IDFPR. CE earned for disciplinary purposes may not be used toward your CE renewal requirements.

DOwNLOAD

IAR’s Official Q&A and Checklist for the 2015 Managing Broker Renewal at

www.illinoisrealtor.org/2015managingbrokerrenewal

Copyright Illinois Association of REALTORS®. This information may not be reprinted in whole or in part without express written permission of the Illinois Association of REALTORS®. Send reprint requests to IARaccess@iar.org.

The IAR Licensing & Training Center is your trusted source for state-approved real estate licensing and continuing education courses (classroom, home study & online) including NEW state-of-the-art interactive course webinars - you don’t have to leave home!

www.illinoisrealtor.org/education 1-800-523-5077

MARKET WATCH

By Stephanie Sievers | Senior Editor

REAL STUDY SHINES LIGHT ON HIDDEN COST OF FORECLOSURES

I

t is not surprising that foreclosures, which may be vacant or in a state of disrepair, can have a negative impact on the surrounding neighborhood, but a study by the Regional Economic Applications Laboratory (REAL) at the University of Illinois puts a dollar figure on the effect foreclosures can have on nearby property values in the city of Chicago.

For example, having one or two foreclosed properties within a tenth of a mile of a $150,000 home can reduce its price by $6,535, according to the study.

“While the foreclosure inventory is likely to return to pre-recession levels sometime during the next 12 months, the localized impact on property values remains significant. Especially impactful is the effect of clusters of foreclosed properties on prices of nearby properties generating impacts exceeding 5 percent and in some cases approaching 10 percent of the median prices,” said REAL Director Dr. Geoffrey J.D. Hewings.

The REAL study examined five years of data (2008-2012) for the Chicago housing market. Illinois’ foreclosure outlook has steadily improved and the number of foreclosures is falling, but the study does illustrate the broader market impact foreclosures have had on home prices and values.

Among the other findings: • Foreclosures “contaminated” neighborhoods by dampening home prices. Distressed properties have a higher incidence of being poorly maintained or vacant, factors which detract from the neighborhood’s overall appearance. Additionally, areas with high incidences of foreclosures create a surge of property on the market, a factor which can further weaken prices.

•

Additional foreclosures in close proximity to a home further reduce the price, although not at as steep a rate. In a particularly hard hit area with more than 10 nearby foreclosures, each foreclosure reduced property values by $2,246 accumulating to a total discount of $28,000 according to REAL. (See Figure 1 and Figure 2: 0-0.1 mile nearby) Find more information about the REAL study at www.illinoisrealtor. org/foreclosureimpact. Research for the study was conducted by University of Illinois Graduate Research Assistant Xian Fang

Faststats and the sortable statistics are available in the Members Only MarketStats section of the IAR website, www.illinoisrealtor.org/membermarketstats. #IARMarketStats

ILLINOIS REALTOR® October 2014

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OMBUDSMAN PROFESSIONAL STANDARDSCONFIDENTIALITY ETHICS TROUBLESHOOTING CONSUMER HELP LINE PROFESSIONALISM OMBUDSMAN PROFESSIONAL STANDARDS DISPUTE RESOLUTION CONFIDENTIALITY ETHICS UBLESHOOTING CONSUMER HELP LINE PROFESSIONALISM OMBUDSMAN PROFESSIONAL STANDARDS CONFIDENTIA ICS TROUBLESHOOTING CONSUMER HELP LINE PROFESSIONALISM OMBUDSMAN PROFESSIONAL STANDARDS DISPU ESOLUTION CONFIDENTIALITY ETHICS TROUBLESHOOTING CONSUMER HELP LINE PROFESSIONALISM OMBUDSMAN ROFESSIONAL STANDARDS CONFIDENTIALITY ETHICS TROUBLESHOOTING CONSUMER HELP LINE PROFESSIONALIS UDSMAN PROFESSIONAL STANDARDS DISPUTE RESOLUTION CONFIDENTIALITY ETHICS TROUBLESHOOTING CONSU LP LINE PROFESSIONALISM OMBUDSMAN PROFESSIONAL STANDARDS CONFIDENTIALITY ETHICS TROUBLESHOOTIN CONSUMER HELP LINE PROFESSIONALISM OMBUDSMAN PROFESSIONAL STANDARDS DISPUTE RESOLUTION ONFIDENTIALITY ETHICS TROUBLESHOOTING CONSUMER HELP LINE PROFESSIONALISM OMBUDSMAN PROFESSIONA TANDARDS CONFIDENTIALITY ETHICS TROUBLESHOOTING CONSUMER HELP LINE PROFESSIONALISM OMBUDSMAN OFESSIONAL STANDARDS DISPUTE RESOLUTION CONFIDENTIALITY ETHICS TROUBLESHOOTING CONSUMER HELP L OFESSIONALISM OMBUDSMAN PROFESSIONAL STANDARDS CONFIDENTIALITY ETHICS TROUBLESHOOTING CONSUM P LINE PROFESSIONALISM OMBUDSMAN PROFESSIONAL STANDARDS DISPUTE RESOLUTION CONFIDENTIALITY ETH UBLESHOOTING CONSUMER HELP LINE PROFESSIONALISM OMBUDSMAN PROFESSIONAL STANDARDS CONFIDENTIA ICS TROUBLESHOOTING CONSUMER HELP LINE PROFESSIONALISM OMBUDSMAN PROFESSIONAL STANDARDS DISPU ESOLUTION CONFIDENTIALITY ETHICS TROUBLESHOOTING CONSUMER HELP LINE PROFESSIONALISM OMBUDSMAN

By Bill Kozar ROFESSIONAL STANDARDS CONFIDENTIALITY ETHICS TROUBLESHOOTING CONSUMER HELP LINE PROFESSIONALIS UDSMAN PROFESSIONAL STANDARDS DISPUTE RESOLUTION CONFIDENTIALITY ETHICS TROUBLESHOOTING CONSU P LINE PROFESSIONALISM OMBUDSMAN PROFESSIONAL STANDARDS DISPUTE RESOLUTION CONFIDENTIALITY ETH UBLESHOOTING CONSUMER HELP LINE PROFESSIONALISM OMBUDSMAN PROFESSIONAL STANDARDS CONFIDENTIA ® The IAR board sanctioned the Ethics Citation Program, he Illinois Association of REALTORS expanding its ICS TROUBLESHOOTING CONSUMER HELP is LINE PROFESSIONALISM OMBUDSMAN PROFESSIONAL STANDARDS DISPU which will allow REALTORS® to file complaints about ethefforts to boost professionalism in the industry with new RESOLUT initiatives aimed at adding enforcementHELP and education. ics violations thatOMBUDSMAN pertain to certainPROFESSIONAL articles of the CodeSTANDARDS and ETHICS TROUBLESHOOTING CONSUMER LINE PROFESSIONALISM IAR made several key changes at its Sept. 4 Board of certain Standards of Practice. A panel will review the comONFIDENTIALITY ETHICS TROUBLESHOOTING CONSUMER HELP LINE PROFESSIONALISM OMBUDSMAN PROFESSIONA Directors meeting in Chicago, including establishing an Ethics plaints and a citation will be sent to the respondent if the panel ANDARDS DISPUTE RESOLUTION ETHICS TROUBLESHOOTING CONSUMER HELP LINE PROFESSIONALISM OMBUDSMA Citation Program and the publication of some information believes a violation occurred. Violations can bring fines of ROFESSIONAL STANDARDS CONFIDENTIALITY ETHICS TROUBLESHOOTING CONSUMER HELP LINE PROFESSIONALIS relating to violations reported by local associations. $250 to $1,000, depending on the severity. But, respondents OMBUDSMAN PROFESSIONAL STANDARDS DISPUTE RESOLUTION ETHICS TROUBLESHOOTING CONSUMER HELP LINE The changes come after an ombudsman program was can get a hearing, if needed.

OFESSIONALISM OMBUDSMAN PROFESSIONAL STANDARDS CONFIDENTIALITY ETHICS TROUBLESHOOTING CONSUM ® ® established in 2013 which allowed trained REALTOR memThis program allows REALTORS to file complaints HELP LINE PROFESSIONALISM OMBUDSMAN PROFESSIONAL STANDARDS DISPUTE RESOLUTION bers to troubleshoot basic consumer and agent complaints. anonymously through the association’s website. With this

IAR Makes Changes to Enhance

PROFESSIONALISM in Industry

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This IAR service is designed to assist with dispute resolutions which in many cases led to success without formal complaints being filed.

The new programs show a renewed emphasis on professional standards, an area that has traditionally been a focus for IAR, an organization which provides training and guidance to its members on how to do business the right way.

Among the changes approved by the board:

Local associations have been asked to share information with IAR regarding Code of Ethics and Standards of Practice violations. IAR will publish the information in a members-only area of the website and in Illinois REALTOR® magazine.

The information published by IAR beginning in January will not include names, but will include the article violated and the findings returned by the hearing panel. Unlike a recent move by the California Association of REALTORS® to publish names and photos of ethics violators, IAR will continue to honor the right of local associations in the state to determine publication policies for their perspective members.

The association will put together a new Professional Standards Toolkit to help train real estate professionals The education effort will extend to revamping a portion of the association’s website to make it easy for members and consumers to get professional standards information.

expedited system and the ability to file anonymously, the goal is to encourage more members to take a role in policing ethics violations.

“If bad behavior is not addressed, it damages the industry’s reputation and makes transactions more difficult for every agent,” said Woodridge area REALTOR® Chris Read, a professional standards instructor and the immediate past chair of the IAR Professional Standards Committee. We need to show consumers we are looking out for their best interChris Read ests. By policing ourselves, we can earn their trust, reduce the number of complaints, improve customer satisfaction and raise our stature.”

Consumer Help Line already active

IAR initiated a program last year to help REALTORS® and their clients resolve disputes. Called the IAR Ombudsman Program, it involves a cadre of 15 members who underwent specialized training and who volunteer to work with those filing complaints to resolve issues.

Of the 115 consumer complaints filed through a Consumer Help Line or through the association’s website from June 2013 through June 2014, IAR Executive Secretary Becky Carraher said 79 percent were resolved to the customer’s satisfaction.

We need to show consumers we are looking out for their best interests.

By policing ourselves, we can earn their trust, reduce the number of complaints, improve customer satisfaction and raise our stature.” — Chris Read 34 www.illinoisrealtor.org

Importantly, most of the complaints were resolved without the need to convene an ethics hearing, which can be a time-consuming and costly process for all involved.

Many of the complaints revolved around misunderstandings of the real estate business or miscommunication, Carraher said. By Becky Carraher having a trained ombudsman work as a gobetween, many of the disputes are settled without the need for an ethics hearing or additional action on the part of a consumer.

One of the ombudspersons is Read, who says the establishment of the program has been a longtime goal.

“The first thing I explain is that as an ombudsperson, I am a volunteer,” says Read. “Then, I explain that what they tell me is confidential, and I ask what they are hoping to accomplish. Some may want an apology, while others may just want someone to listen. I also explain that I am not a judge in the process. I can answer questions about processes in the real estate business and gather facts. My goal is to put a distraught consumer at ease and bring a positive resolution to the situation.”

In the future, IAR members will be more aware that the ombudsman service is available for agent disputes as well as consumer disputes. Carraher plans to add 10 more ombudspersons in early 2015.

Resolving disputes When someone has a disagreement with an Illinois REALTOR® and can’t work it out, IAR can help.

• • • • • •

Consumer Help Line – buyers or sellers Professional Standards Hotline – IAR members Only involving cases with REALTORS® Ombudspersons answer questions, facilitate dialogue 24-hour response Reports kept confidential

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THE GROWING BUSINESS OF

Going Green

By Theresa Grimaldi Olsen

G

oing Green is no longer a trend promoted by a small segment of passionate activists. It is an evolution and one that is here to stay in the commercial real estate sector, says REALTOR® Angela Aeschliman.

The most significant stimulus for the evolution in Illinois is Chicago’s new energy-use benchmarking ordinance, says Aeschliman, chief operating officer with Watermark Property Management in Chicago and a past president of the Northern Illinois Commercial Association of REALTORS®.

The ordinance creates new operating standards for owners and property managers and anyone buying and selling, she says. It requires commercial, residential and municipal buildings to track and verify energy consumption data such as water use and greenhouse-gas emissions with software provided by the U.S. Environmental Protection Agency (EPA). The data can be compared against other buildings and national averages.

The first group — buildings with 250,000 square feet — was required to report data in June. The second group — buildings with between 50,000 and 250,000 square feet — will report in June 2015. Residential buildings will follow.

The “teeth” of the ordinance is the requirement that data also must be verified by a licensed architect, engineer or other professional recognized by the city every three years.

Beginning in June 2015, the city can publicly disclose individual building performances. That information could provide a new level of competition in the city, and buildings will need to be energy efficient to remain competitive in the market, Aeschliman says.

Watermark has one building that was required to report in June, but is voluntarily tracking seven other buildings.

“The burden is on the property managers to compile the data,” she says.

“It’s not something that’s going to go away. It’s a new way of doing business.”

— Jean Maday, director of Commercial Real Estate Development & Services for the National Association of REALTORS® 36 www.illinoisrealtor.org

The ordinance only applies to Chicago, but Aeschliman expects the movement to push out into the suburbs in the next several years.

This may just be the beginning of ways that the commercial sector will be required to be transparent with environmental data, she says. In California, there are ordinances that require environmental data in disclosure documents during real estate sales.

The benchmarking ordinance is just one of many aggressive and progressive environmental programs in the city of Chicago. Those programs point to how sustainable buildings and business practices — environmentally friendly and resource efficient — are now part of the fabric of American life.

“It’s not something that’s going to go away,” says Jean Maday, director of Commercial Real Estate Development & Services for the National Association of REALTORS®. “It’s a new way of doing business.”

Buildings new and old are the “single largest opportunity to change the sustainability equation,” says Jennette Moline, a LEED-certified architect, founder and manager of EcoTextures Sustainabilty in Champaign. She points to an EPA study that found buildings use 39 percent of the fossil fuels and 75 percent of the electricity consumed in the United States.

Illinois is a leader in the movement to improve the environmental health of buildings, Moline says. The U.S. Green Building Council ranked Illinois first in the nation for the number of buildings that have been certified by LEED (Leadership in Energy & Environmental Design). LEED recognizes the best green building strategies and practices. Building projects can earn points to achieve different levels of certification. LEED also certifies professionals who have a documented, up-to-date understanding of current green principles.

Cassie Carroll, executive director of the Illinois Green Business Association, says, “There definitely is an increase in awareness of sustainability benefits in big business due to its profitability.” She says 72 percent of the Standard & Poor’s 500 businesses are issuing yearly sustainability reports. “They want to show the public that they are a responsible company,” Carroll says. Fast-growing start-up companies and the government also have a strong focus on sustainability, she says.

The U.S. Green Building Council says green buildings can: • Reduce energy use by 25 percent • Reduce water use by 11 percent • Reduce greenhouse-gas emissions by 34 percent • Reduce maintenance costs by 19 percent

THE COST Avi Ron, co-owner of Dream Town Realty, Inc., and owner of Ecodwell Builders and Remodeling in Chicago, says he struggles with the cost of going green.

Ron entered the Chicago real estate market in 1989 with aspirations of implementing the same green practices in building as he had in Israel. The Ecodwell and Dream Town websites include extensive information about green practices. About half of his business focuses on commercial — usually small- to medium-size businesses such as restaurants and car dealerships.

“I try to push the green, but it’s not very successful,” Ron says. “It’s always a hard sell.”

Everyone needs to be conscious of the environment, he says: “But it boils down to money. When it comes to the point to pay for it, they can’t justify it.”

Jean Maday says spending more upfront will result in multiple economic benefits down the road. “It’s more than just being socially responsible,” she says. “It is a major factor that can affect the bottom line. There are going to be long-term cost savings.”

An emphasis on improving the environment also can be an economic driver. For instance, a biking/walking trail that was created in Chicago has the potential to boost housing prices in the area, Maday says.

LONG-TERM SAVINGS

Green Certifications

The complexities of monitoring, gathering data and analyzing the data for energy efficiency require time and research. Here are Green certifications and programs to consider: •

LEED – www.usgbc.org/leed

•

Illinois Green Business Association. Nonprofit based in Champaign. www.illinoisgba.org

•

Energy Star – www.energystar.gov

•

NAR Green REsource Council – GREEN Designation Program – www.greenresourcecouncil.org

•

EcoBroker – www.ecobroker.com

Lisa Elkins, a licensed architect, co-owner of 2 Point Perspective, Inc., in Chicago, and a LEED-accredited professional who speaks to groups Energy Star, an EPA program that helps busiabout green building, says the upfront costs of building green are often offnesses with energy efficiency, provides a cashset by a decrease in long-term life cycle costs. flow calculator to dispel financial Elkins points to a World Green Building Council study (www. concerns. (www.energystar.gov/buildworldgbc.org/activities/business-case) released in March 2013 that ings/tools-and-resources/cash-flowsays: “There has been an overall trend towards the reduction in design and opportunity-calculator-excel) construction costs associated with green building as building codes around the world become stricter, supply chains for green materials and technoloAbout the writer: Theresa Grimaldi Olsen is a freelance writer gies mature, and the industry becomes more skilled at delivering green based in Springfield. She can be reached at buildings.” tgrimaldiolsen@gmail.com Complacency and improper perceptions stop businesses from moving forward on green initiatives, she says: STATEMENT OF OWNERSHIP, MANAGEMENT AND CIRCULATION “Constructing a green building can The ILLINOIS REALTOR ® (ISSN-0744-2211) is published four times cost the same as a conventional builda year (January, April, July, October) for $3.00 per year by the ing if cost strategies, program manageIllinois Association of REALTORS®. The offices of publication and the ment and environmental strategies are headquarters and general business offices of the Publisher, Gary Clayton, are located at 522 S. Fifth Street, P.O. Box 19451, Springfield, IL 62794integrated into the development process 9451. The sole owner of the publication is the Illinois Association of right from the start.”

REALTORS® at the address listed above. There are no known bondholders, Elkins says making even small mortgage or other s­ ecurity holders. improvements to indoor environmental

Avg. # copies Actual # copies quality such as increased fresh air, ade ea. issue during single issue quate amounts of daylight indoors and

last 12 months nearest filing views of nature can reap some financial Total # copies (net press run) 41,237 41,900 benefits.

Paid/requested subscriptions 40,753 41,359 Sales through dealers and carriers 0 0 A University of California Berkeley TOTAL PAID DISTRIBUTION 40,753 41,359 Institute of Business and Economic Free distribution 286 129 Research study in April 2011 called TOTAL DISTRIBUTION 41,039 41,488 “The Economics of Green Buildings” Copies not distributed 198 412 (www.energystar.gov/buildings/ TOTAL 41,237 41,900

tools-and-resources/economicsgreen-building) says buildings with green ratings command higher rental and occupancy rates.

Percent Paid

98.83%

98.71%

I certify that the information stated is true and complete.

Jon K. Broadbooks, Editor

ILLINOIS REALTOR® October 2014

37

REALTOR® COMMUNITY FOLLOW US:

Technology and marketing hot topics at YPN REbarcamp in Itasca Illinois REALTORS® shared ideas and best practices in August at the Illinois REbarcamp powered by the Illinois Young Professionals Network (YPN). Looking for a new mobile app to make your business life easier? Find six mobile tools REbarcamp attendees said they find helpful at the IARbuzz blog post, “Do you have these apps in your REALTOR® toolkit?” www.iarbuzz.com/2014/08/apps-realtor-toolkit/

Illinois YPN Chair Rebecca Thomson (left) and Nobu Hata, NAR Director of Digital Engagement, (above) participate in REbarcamp breakout sessions.

In Memoriam: Jim Barbagallo In July, the IAR family lost a dedicated advocate of the REALTOR® cause and a friend to many with the passing of REALTOR® Jim Barbagallo, 65, of Rockford. Barbagallo was 2014 president of the Rockford Area Association of REALTORS® and spent countless Jim Barbagallo hours donating his time and talents to the Illinois Association of REALTORS® over the years. Barbagallo was posthumously recognized with a Presidential Medallion from 2014 IAR President Phil Chiles during the September Board of Directors meeting.

Congressman Schock talks real estate in Springfield visit IAR’s popular meeting series, Let’s Talk Real Estate, continued this summer with a visit from U.S. Rep. Aaron Schock, who met with Illinois REALTORS® at IAR headquarters in Springfield. The meetings allow IAR members to meet with federal elected officials and discuss the issues and policies affecting the industry.

Posts on the 2014 IAR Fall Conference App ...

Phil Johnson

Mabél Guzmán

Connie Stellhorn-Schanter

Johnson, Guzmán and StellhornSchanter also honored with Presidential Medallions Phil Johnson, Mabél Guzmán and Connie Stellhorn-Schanter also were honored with Presidential Medallions for their service during the past year and beyond.

Sarah Ware via the App – From Elizabeth Dozier session

“Don’t hit the snooze button in life. Push yourself to never lose sight of something with a goal in mind.”

38 www.illinoisrealtor.org

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