October 2015 Illinois Realtor

OCTOBER 2015

THE VOICE FOR REAL ESTATE IN ILLINOIS

YOU EARNED YOUR REAL ESTATE LICENSE

What’s Your Next Move?

SOCIAL MEDIA AND THE CODE OF ETHICS Do you know the rules?

GENERATION

NEXT

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Finding Real Estate’s Future Leaders

PLUS

GEARING UP FOR WINDING DOWN

Putting the pieces in place for your exit strategy

www.illinoisrealtor.org

THE OFFICIAL PUBLICATION OF THE ILLINOIS ASSOCIATION OF REALTORS®

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CONTENTS OCTOBER 2015

Departments 4 President’s Message: Big Agenda, Many Successes This Year 5 What’s Online: REbarcamp Illinois 2015, RPAC Sterling Open 6 Quick Takes: IHDA Debuts Loan Program, Home Upgrade Spending Increases 9 Legal Update 12 At the Capitol: Budget Impasse Dominates Spring Session 25 RVOICE: Be a Trusted Market Advisor with RVOICE Resources 26 Homefront: Crosby To Get National Honor In San Diego Next Month 28 Commercial Corner: Designations for the Commercial REALTOR® 31 REALTOR® Community

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LEGAL UPDATE:

Questions About Compensation

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ILLINOIS ASSOCIATION OF REALTORS®

THE VOICE FOR REAL ESTATE IN ILLINOIS

Features

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Generation Next: Finding Real Estate’s Future Leaders

17

You Earned Your Real Estate License — What’s Your Next Move?

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Social Media and the Code of Ethics

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Helping Students with Educational Goals Through Kinney Scholarships

Nearing Retirement? How to Prepare an Exit Strategy

ILLINOIS REALTOR® October 2015

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

BIG AGENDA, MANY SUCCESSES THIS YEAR I started my year as president of the Illinois Association of REALTORS® with an ambitious to-do list.

Now, nearly 12 months later and on the cusp of IAR’s 100th anniversary, I am proud of the work done by IAR’s committed volunteers to meet and exceed these goals.

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Addressing senior housing issues: Last year the Senior Housing Working Group was created to explore ways to help those facing housing decisions driven by aging. This task force, led by REALTOR® Chris Read, came up with recommendations which are expected to yield resources for Illinois residents and the REALTORS® who serve them.

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Taking a global view: Global is truly the new local, and I am pleased that Illinois is a national leader in members attaining the CIPS designation (Certified International Property Specialist).

The association is working to better connect with Illinois’ international community and is involved in an ongoing effort to market the state at an international expo.

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Political muscle: This year, IAR was heavily involved in races from governor to alderman. The association used RPAC contributions and made dozens of independent expenditures to ensure REALTOR®friendly candidates were elected. IAR’s nearly 70 percent success rate in the races in which it was involved is testament to the power REALTORS® bring to the political process.

I am, of course, humbled by the member support for IAR’s mission to protect the real estate industry and private property rights. My thanks to IAR’s 43,000 members for making this a year I will always cherish.

“I am proud of the work done by IAR’s committed volunteers to meet and exceed these goals.”

— Jim Kinney 4 www.illinoisrealtor.org

Top photo: Kinney and IAR leadership participated in an education event in Chicago with members of the Republic of Ghana Parliament.

Middle photo: Kinney presents the Illinois REALTOR® of the Year award to Loretta Alonzo.

Bottom photo: Chicago Blackhawks Chairman Rocky Wirtz, Kinney and Illinois Gov. Bruce Rauner pose with the Stanley Cup during a fundraiser at IAR to raise money for repairs to the Illinois Executive Mansion.

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

WHAT’S ONLINE

2015 IAR OFFICERS President Jim Kinney, ABR, CRB, CRS, GRI, SRES jim.kinney@bairdwarner.com President-Elect Mike Drews, GRI mdrews@dossrealtors.com Treasurer Doug Carpenter, ABR, AHWD, SFR doug21@comcast.net Dallas Hancock (right), Peoria AE with REALTORS® Zack Baker and Adam Merrick of Keller Williams Premier Realty Peoria.

Immediate Past President Phil Chiles, ABR, CRS, GRI, SRES pchiles@thegroup.com Chief Executive Officer Gary Clayton, CAE, RCE Editor Jon Broadbooks Senior Editor Stephanie Sievers Content Marketing Specialist Bill Kozar

REBARCAMP ILLINOIS 2015

Learn more about the latest digital trends, business and marketing tips, best practices and what is happening now and next in real estate at this FREE, half-day event, Oct. 5 at the Oak Brook Hills Resort-Hilton. Register at rebarcamp15.eventbrite.com

Graphic Design CameronRush, Inc. Katie Grant

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 52: NUMBER 4 Copyright © 2015 Illinois Association of REALTORS® All rights reserved. www.illinoisrealtor.org e-mail: IARnews@iar.org blog: www.IARbuzz.com

Like us on Facebook.

Join us on LinkedIn. Follow @ILREALTOR and @ILREALTORmag on Twitter.

Subscribe to YouTube.com/illinoisrealtor

Many thanks to guests and sponsors of IAR’s first RPAC Sterling Open golf challenge who enjoyed two days of play at championship courses in Springfield. Participants were Major Investors who recruited new individual or corporate Major Investors to RPAC. Check out the photo album on IAR Facebook. http://on.fb.me/1WV2g9e

REAL PROPERTY ALLIANCE

Check out IAR’s Real Property Alliance, a non-profit, educational foundation providing insight and analysis for Illinois property owners and consumers.

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.

RPAC STERLING OPEN

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GO

STATEMENT OF OWNERSHIP, MANAGEMENT AND CIRCULATION The ILLINOIS REALTOR® (ISSN-0744-2211) is published four times a year (January, April, July, October) for $3.00 per year by the Illinois Association of REALTORS®. The offices of publication and the headquarters and general business offices of the Publisher, Gary Clayton, are located at 522 S. Fifth Street, P.O. Box 19451, Springfield, IL 62794-9451. The sole owner of the publication is the Illinois Association of REALTORS® at the address listed above. There are no known bondholders, mortgage or other ­security holders.

Total # copies (net press run) Paid/requested subscriptions Sales through dealers and carriers Other Classes Mailed through the USPS TOTAL PAID DISTRIBUTION Free distribution by Mail Free Distribution Mailed at Other Classes Free Distribution Outside the Mail Total Free distribution TOTAL DISTRIBUTION Copies not distributed TOTAL Percent Paid

Avg. # copies ea. issue during last 12 mos.

43,686 42,297 0 23 42,320 76 21 25 122 42,442 1,639 43,686 99.71%

Actual # copies single issue nearest filing 44,161 42,630 0 18 42,648 76 12 0 88 42,736 1,610 44,161 99.79%

I certify that the information stated is true and complete.

Jon K. Broadbooks, Editor

ILLINOIS REALTOR® October 2015

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QUICK TAKES IHDA Offers New Loan Program, 1stHomeIllinois The Illinois Housing Development Authority (IHDA) is now offering a new mortgage program, 1stHomeIllinois, to firsttime homebuyers in 10 counties: Boone, Cook, DeKalb, Fulton, Kane, Marion, McHenry, St. Clair, Will and Winnebago.

These areas were selected because they were hardest hit by the foreclosure crisis. 1stHomeIllinois offers 30-year, fixed rate mortgages and $7,500 in cash assistance for down payments and closing costs to first-time buyers, veterans and other Illinois residents who have not owned a home in three years.

• • • • •

DO DOGS OR CATS

RULE IN ILLINOIS? Unlike many states, Illinois pet owners are pretty evenly split between dog people and cat people. Realtor.com analyzed American Veterinary Medical Association data to determine regional pet preferences and found that cats are favorites in many northern states while dogs are more popular in the south.

Illinois is among 22 states where dog and cat populations are more evenly split. http://www.realtor.com/news/ trends/dog-state-vs-cat-state/

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Qualifying buyers must purchase a one- or two-unit property in one of the 10 counties and plan on living in the home as their primary residence.

Buyers must contribute $1,000 or 1 percent of the purchase price, whichever is greater.

Buyers must meet credit requirements and income and purchase price limits.

Buyers must complete homeownership counseling.

Learn more about 1stHomeIllinois and a sister program @HomeIllinois, which is available to first-time and repeat homebuyers and those looking to refinance in any Illinois county, at www.ihda.org.

45.4% The U.S. homeownership rate of Hispanics in 2014, according to Census data. Hispanics make up more than 17 percent of the population and that share is expected to double in the coming years. But the Hispanic homeownership rate dipped to a 14-year low last year, in part because they may not have built enough of a traditional credit history to have a credit score. The National Association of Hispanic Real Estate Professionals (NAHREP) has information on this trend on its website at http://nahrep.org/ nahrep-in-the-news.

Move for Hunger and Help Your Community Fight hunger in your own backyard by encouraging your local REALTOR® association to partner with Move for Hunger, a nationwide, nonprofit organization that helps local food pantries collect unopened, non-perishable food through the cooperation of real estate professionals, home sellers and moving companies. Instead of throwing food away during the move, sellers can donate it to local food pantries and help people in their community.

Visit https://MoveForHunger.org.

Homeowners Spending More on Discretionary Home Improvements

U.S. homeowners are beginning to spend more money on discretionary home improvement projects. Spending on such projects rose $6 billion between 2011 and 2013, according to the report, “Improving America’s Housing 2015: Emerging Trends in the Remodeling Market,” from the Harvard Joint Center for Housing Studies (JCHS). Maintenance and replacement projects still account for the majority of $192 billion spent on home improvements in 2013, but discretionary projects are slowing gaining lost ground. Find the study at http://www.jchs.harvard.edu/research/publications/emerging-trends-remodeling-market

Chicago Area House ‘Flippers’ See Strongest Profits Flip a home in the Chicago metro area and you’re likely to see a better return on your investment than many other metro markets. In the second quarter of 2015, investors who flipped single-family homes in Chicago averaged a 61.2 percent average gross return, topping the list of metro markets, according to RealtyTrac’s Q2 2015 U.S. Home Flipping Report. But while returns are running higher, flipped homes accounted for a smaller share — 4.5 percent — of all U.S. home sales compared to 4.9 percent a year ago. http://www.realtytrac.com/news/ home-prices-and-sales/q2-2015-u-s-home-flipping-report/

Illinois REALTOR® Daniel L. Goodwin Named 2015 Good Neighbor Finalist Daniel L. Goodwin, chairman and CEO of The Inland Real Estate Group, was one of 10 finalists for REALTOR® Magazine’s 2015 Good Neighbor Awards. The award honors REALTORS® impacting their communities through extraordinary volunteer work. In 1994, Goodwin founded New Directions Housing Corp., a nonprofit that has provided affordable housing for low-income residents by building or rehabbing nearly 500 multi-family units.

Affordable housing has long been a priority for Goodwin, who served 10 years on the board of the Illinois Housing Development Authority Trust Fund and chaired the DuPage County Affordable Housing Task Force. He is a member of the NAR RPAC Hall of Fame. The five Good Neighbor Award winners are announced in late September. Winners receive $10,000 grants for their charities; the five honorable mentions each receive a $2,500 grant. Read more about Goodwin’s Good Neighbor profile at http://realtormag.realtor.org/ good-neighbor-awards/article/2015/08/ stepping-stones-self-empowerment

ILLINOIS REALTOR® October 2015

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

COMMON QUESTIONS ABOUT COMPENSATION

Lately, the IAR Legal Hotline has been abuzz with questions about payment or receipt of compensation. The questions range from those about payments by licensees to consumers to those about payments to licensees by their sponsoring brokerage companies and consumers. Many of these questions can be analyzed and answered according to provisions found in Article 10 of the Illinois Real Estate License Act of 2000 (the Act). Here is a brief review of some of the more common questions dealing with compensation. Remember, compensation, as defined in the Act, can include anything of value, e.g. cash, commissions, referral fees, bonuses, prizes, coupons, gift cards, merchandise, rebates, etc.

Q Is it permissible for a real estate licensee to offer

to pay a rebate or inducement to a seller or buyer in order to encourage them to do business with the licensee?

A Yes. Pursuant to Sections 10-15(c) and (d) of the Act, a real estate licensee may offer incentives to consumers who are or could become parties to a real estate transaction.

This is permissible under the Act. The question often arises in the context of a licensee offering a rebate to a buyer.

Buyers should take care that their lender (if any) approves the rebate amount. This is not an issue under the Act but could be an issue in the buyer’s loan deal. Stay tuned on information about these types of third party payments under the new Truth in Lending and Real Estate Settlement Procedures Act Integrated Disclosure, or “TRID,” rules.

Q Is it permissible for a real estate licensee to pay a referral or “finder’s” fee to an unlicensed person who is not or will not be a party to the transaction?

A Generally speaking, no. The act of referring real estate business where the referrer is not a party in exchange for compensation is an activity that requires a real estate license as defined under the Act. If a licensee (who is subject to regulation under the Act) pays compensation (anything of value) to an unlicensed person in exchange for a real estate referral, the licensee is abetting the unlicensed practice of real estate brokerage.

ILLINOIS REALTOR® October 2015

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SIX Things You Need

to Know about the New Integrated Disclosure Rules

By Jeffrey T. Baker

Sorling Northrup Attorneys, IAR Transaction Helpline The new TILA-RESPA Integrated Disclosure rule, or TRID, as the industry refers to it, will change the process of borrowing to buy a home and thus will directly impact how Illinois brokers get from contract to closing. Here are six things to know about the new rules.

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Implementation date now set for Oct. 3, 2015 Originally scheduled for Aug. 1, the implementation date has been moved to Oct. 3. New rules will apply to all residential real estate transactions that go under contract on or after the implementation date.

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New “Loan Estimate” form replaces initial truth-in-lending and Good Faith Estimate forms The Loan Estimate is intended to provide as accurate an estimation of the true costs of the financing and the costs required to close for buyers. Each estimate must fall within a prescribed tolerance or a refund to the consumer, from the lender, may be necessary.

Q What if the facts changed a little? Is it

permissible for an unlicensed seller to pay a referral or finder’s fee to an unlicensed person in exchange for the unlicensed person sending them a buyer? Offers like these are being made via social media platforms on an almost daily basis.

A Not really. The seller won’t be violating any provision of the Act because the unlicensed seller is not subject to the Act. However, the unlicensed person who makes the referral puts himself within the jurisdiction of the Act if and when he accepts compensation for that real estate referral. Now the unlicensed person could be prosecuted for engaging in the unlicensed practice of real estate brokerage. Monetary fines could go as high as $25,000 per offense. The amount of the fine will likely depend upon the egregiousness and scale of the unlicensed practice.

It is important to know that there are a few exceptions to this general rule which can be found in Section 5-20 of the Act. One is a resident lessee in a building or complex that might refer a new tenant for the same building or complex in exchange for a fee.

There are limits to the number and the dollar amount of referrals allowed.

Q Is it permissible for a licensee to receive a

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referral fee from third parties, like companies that install security systems or hardware stores?

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A Yes. This is generally permissible under Section 10-10 of the Act. These payments are not for the performance of licensed activities, so the Act would not require that they be paid to the licensee through her sponsoring brokerage company. Section 10-10 does require that the licensee disclose the fee to her client. In addition, the REALTOR® Code of Ethics, at Article 6, requires disclosure and consent from the client. Also, office policies might contain provisions that prohibit this practice.

Loan Estimate form must be delivered to consumer within three business days of their application for a loan Consumer makes an application when they submit their name, social security number, income, address of property to be purchased, estimated value of that property and the amount of loan requested to the lender.

Pre-Approval and Pre-Qualification letters are still allowed Lenders will likely take steps to prevent consumers from disclosing information that would count as an application in order to provide the letters.

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New “Closing Disclosure” form replaces final truth-in-lending disclosure and HUD-1 form Closing Disclosure must be received by consumer no later than three business days prior to loan consummation (which will likely be the closing date in most Illinois cases).

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New rules could cause delay in closings A change in the loan’s APR, the addition of a pre-payment penalty to the loan, or a change of the loan product itself will require a new Closing Disclosure and re-set of the three business days. All other changes will necessitate a revised Closing Disclosure but no re-set of the three business days. At a minimum, consumers are permitted to take one day to review revised Closing Disclosures. *Reprinted from D.R. Legal News, July 2015.

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Q Is it permissible for a licensee to be paid a

referral fee from a third party such as a bank, a mortgage broker, a title insurance company, or an attorney?

A No! The difference between this question and the previous one is all of the entities involved are “settlement service providers” under federal regulation. The federal rules prohibiting “naked referral fees” or kickbacks among settlement service providers take precedence over state regulations; at least as far as settlement service providers are concerned. So, if a lender wants to pay a real estate licensee a referral fee for sending the lender a prospective borrower, no amount of disclosure will save the situation. It is simply not permitted. Referrals can be made, but not in exchange for any compensation.

Q Are there any special requirements if a licensee

refers business to another company where the licensee is an owner in, for example, a window cleaning company?

A While the referral to the licensee’s window cleaning business is permissible, the licensee must disclose her ownership interest under both the Act and the REALTOR® Code of Ethics.

Q Is it permissible for one licensee to pay a referral

These questions and answers are provided to illustrate what is allowed under the Act with regard to payment of compensation and incentives. It is important to note that not only does the Act apply, but also federal regulation, other state regulations, some local regulations and the REALTOR® Code of Ethics. Finally, even where something might be permitted under regulation or Code, a sponsoring brokerage company might have a different policy. Finally, it is important to understand that the Act also applies to licensed activities in the context of leasing or rental transactions. Therefore, most, if not all of the questions above would be answered similarly if the real estate transaction involved leasing.

fee directly to another licensee?

A No. While the agreement can be made between the licensees, any payment of compensation for licensed activities must flow from the sponsoring brokerage company of one licensee to the other licensee’s sponsoring brokerage company.

GOT A LEGAL QUESTION? The IAR Legal Hotline is the Designated REALTOR®/ managing broker’s go-to source for legal information.

Q Is it permissible for a licensee to accept

Phone: 800.952.0578 Email: burbance@iar.org HOURS: 9 a.m. to 4 p.m., Monday through Friday

“payment” for licensed activities in the form of a prize, like a television?

GOT A LEGAL QUESTION ON TRANSACTIONS? Call the IAR Transaction Helpline.

A As stated above, all compensation, even televisions, must be “paid” through the licensee’s sponsoring company. Then the managing broker of the company should review the agreement with the sponsored licensee to determine how or whether to transfer the television to the licensee. The parties might also reach some agreement for the transfer that might vary from their written agreement.

S AV E

Phone: 844.647.3833 Email: jbaker@iar.org

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ILLINOIS REALTOR® October 2015

8/20/2015 2:04:14 PM

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AT THE CAPITOL Julie Sullivan | Assistant Director, Legislative and Political Affairs

ILLINOIS BUDGET IMPASSE DOMINATES SPRING SESSION IAR blocks sewer video inspections, joins fight against advertising tax

THE 2015 SPRING SESSION OF THE ILLINOIS GENERAL ASSEMBLY CONTINUED WELL PAST ITS MAY 31 SCHEDULED ADJOURNMENT AS NEGOTIATIONS OVER THE STATE’S OPERATING BUDGET CONTINUED. AS OF THIS WRITING, THE STALEMATE CONTINUES. MORE THAN 6,400 BILLS WERE INTRODUCED THIS SESSION AND YOUR IAR LOBBY TEAM ACTIVELY WORKED ON MORE THAN 250 BILLS. BELOW ARE A FEW OF THE ISSUES THAT DOMINATED OUR AGENDA.

2015 BUDGET SHORTFALL CLOSED BY MASSIVE DEDICATED FUNDS SWEEP STATUS: PASSED AND SIGNED INTO LAW (Public Act 99-2) Effective March 26, 2015 We have reported on the state’s struggle to fix the gaping budget deficit.

Because of that, we anticipated that our Real Estate License Administration Fund (RELAF) monies were ripe for the taking as members of the General Assembly and the governor searched for a fix. In March, the General Assembly and the governor reached an agreement

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to address the fiscal year 2015 budget hole and in three days, a two-part bill package was passed and signed into law.

House Bill 318, swept a staggering $1.3 BILLION from state “special funds,” including $30 million of the $35 million balance from RELAF. Virtually EVERY industry and profession with a fund took a similarly massive hit as did the state’s road fund – once considered a sacred cow. House Bill 318 along with House Bill 317 became the two-bill package – comprised of 80 percent from sweeps and 20 percent from cuts in the form of a 2.25 percent cut to most state programs

– to deal with the 2015 budget hole.

The overtime session continued because of the lack of an agreement on how to fix the 2016 budget year hole. IAR was on the record in OPPOSITION to the taking of RELAF funds.

IAR TAKES PROACTIVE STANCE AGAINST CONSIDERATION OF A TAX ON ADVERTISING STATUS: ACTIVE As state leaders and public policy groups discussed the budget crisis, a variety of revenue proposals have been suggested. One “fix” was to expand

the sales tax to include a variety of services, including a tax on advertising.

IAR joined a broad coalition this spring to urge that this bad idea be taken off the table. Thousands of REALTORS® have already taken action to SAY NO TO THE AD TAX! You can still make sure that your voice is heard by answering the Call for Action at the IAR Action Center. For more information visit www.noadtaxillinois.com.

NO MOVEMENT ON SEWER VIDEO BILL STATUS: DEAD Thanks to a tremendous response from REALTORS® statewide, House Bill 1376, the bill that sought to amend the seller disclosure requirements to require ALL homeowners seeking to sell their home to hire a licensed plumber to conduct a video inspection of their sewer line prior to a sale, was STOPPED. IAR strongly opposed this bill which would have unfairly imposed a pre-sale inspection cost of up to $500 or more on ALL homeowners seeking to sell their home, even absent any evidence that problems with sewer lines existed.

ONEROUS MUNICIPAL LIEN POWERS STATUS: PASSED SENATE; REMAINS ACTIVE IN HOUSE IAR continues to track Senate Bill 1380. IAR opposed this controversial measure throughout the spring session and into the summer. The bill was initially defeated in the Senate but through a parliamentarly procedure was narrowly approved on a second vote. SB 1380 amends two sections of the Municipal Code primarily dealing with the lien that a municipality files for costs incurred for removing weeds/ grass, trees/bushes, pests, garbage, debris and graffiti. This bill would

allow a municipality to skip the foreclosure proceeding on the lien on the offending property and to instead obtain a judgment lien against ALL real estate of the owner. IAR does not believe that it should be easier to create impairments on the rights of property owners on non-offending properties. Plus, it is well known that municipalities already possess various tools to deal with unrecovered costs.

Other lien bills, also OPPOSED by IAR this spring session are DEAD (HB 2752, HB 2648, HB 3514, SB 1630, SB 118)

REAL ESTATE LICENSE ACT CLEAN-UP STATUS: PASSED AND SIGNED INTO LAW (Public Act 99-227) Effective: August 3, 2015 House Bill 3332 included various “clean-up” changes, such as deleting obsolete references like the “salesperson” license category, to the Real Estate License Act. The bill was an initiative of the Illinois Department of Financial and Professional Regulation and was SUPPORTED by IAR.

CHANGES TO THE ILLINOIS HUMAN RIGHTS ACT STATUS: PASSED AND SIGNED INTO LAW (Public Act 99-196) Effective: July 30, 2015 IAR worked with the sponsors of House Bill 3464 to make changes to the Illinois Human Rights Act regarding civil rights violations in real estate transactions. The Illinois Department of Human Rights introduced the bill to update Illinois law to comply with the requirement for Illinois law to be “substantially equivalent” to the federal fair housing law. IAR suggested changes to conform Illinois law more closely to federal law so there would not be a confusing double standard requiring interpretation by our members.

LIMITS ON MUNICIPAL “CRIME FREE” ORDINANCES STATUS: PASSED AND SIGNED INTO LAW (Public Act 99-441) Effective: November 19, 2015 As introduced, Senate Bill 1547 essentially banned all local crime free ordinances, but the tenant advocates who crafted the bill added a series of amendments to try to remove the opposition of the local government lobby. The amendments limited the protections in the bill to victims of domestic and sexual violence, and the disabled. That took most of the teeth out of the bill in terms of reigning in these ordinances generally, and while we didn’t oppose the new approach, it diminished our support. One thing we DID have a problem with was language in the bill that implied that CURRENT local powers on this issue were greater than we believe they are, particularly with respect to non-home rule units. In the end, we were able to add an amendment addressing those concerns and IAR was NEUTRAL on the final legislation.

IAR TO BE A MEMBER OF THE ILLINOIS DRONE TASK FORCE STATUS: PASSED AND SIGNED INTO LAW (Public Act 99-392) Effective: August 18, 2015 Senate Bill 44 created the Unmanned Aerial System Oversight Task Force to provide oversight and input in the creation of comprehensive laws and rules for the operation and use of drone technology in Illinois, subject to federal oversight and regulation.

IAR will be an important member on this task force as the consideration of commercial and private uses as well as landowner and privacy rights will be part of the work of the task force. IAR SUPPORTED the bill.

FOR A MORE COMPREHENSIVE LIST OF BILLS AND THE STATUS OF THOSE ISSUES, CHECK OUT THE 2015 STATE LEGISLATION TRACKING REPORT ON OUR WEBSITE AT WWW.ILLINOISREALTOR.ORG/GOVERNMENT

ILLINOIS REALTOR® October 2015

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GENERATION NEXT

Build your business for the long haul by identifying and recruiting the new guard of industry leaders.

By Bridget McCrea

The profile of the typical REALTOR® has stayed fairly constant — female, a homeowner, some college education and at least 10 years in the business. But one characteristic is changing: the REALTOR® work force is getting older, according to the 2015 National Association of REALTORS ® (NAR) Member Profile. In 1999, the typical age was was 51, today it is 57.

Experience is important for those running real estate businesses. But the fact that just 20 percent of all REALTORS® today are under 44 years old creates a looming question for many brokerages: How to train and retain the next generation of real estate leaders.

FILLING THE BENCH “Brokers really need to think about whether they have the right people on board who are prepared to step into leadership roles,” says Deborah Prodehl, regional vice president at Coldwell Banker Honig-Bell in Homer Glen.

Creating bench strength within a real estate firm can be challenging for several reasons. By their very nature, agents like to be independent and enjoy their “entrepreneurial-like” lifestyles. As such, many shy away from the responsibility of running an office and managing others. Also, management as a discipline isn’t easy and isn’t the right fit for everyone.

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When selecting potential leadership candidates, Prodehl looks for individuals who are outgoing, motivated, peopleoriented and who work well in a team environment. These traits tend to surface during the initial interview process.

“Based on how they present themselves and the questions that they ask,” she says, “I can usually tell if they will gel well with my team.”

Prodehl views training and mentoring as integral during the leadership recruitment and grooming process. Getting the entire team involved in the process also helps in keeping potential managers and leaders invested for the long haul.

“Any time you can create a nurturing, family-like atmosphere at your firm, your top candidates will hang in there longer because of the bonds that they’ve built with others,” she says.

BOTH SIDES OF THE TABLE Sheryl Grider Whitehurst, managing broker at Traders Realty in Peoria, has been on both sides of leadership recruitment. She started in the industry as a secretary in 1978 after buying a home from the agent who later became her employer. She got licensed a few years later and after a successful career as an agent moved into management.

When recruiting new leaders for her company, Whitehurst puts an emphasis on the training and mentoring process by pairing veteran managers with potential leaders.

“From day one, we give the new recruits assignments related to building their businesses, with the idea that over time they’ll become agents/brokers whom others will look up to and emulate,” she said.

When assessing an agent’s potential as a manager or leader, Whitehurst looks for individuals who have a lot of patience, and who can answer questions and manage challenges without losing that patience. She also seeks people who can stay one step ahead and get out in front of problems before they become significant issues. Finally, she says a willingness to work past business hours is often a very good sign of a future leader or manager.

“When my agents are working, I’m working, whether I’m physically at the office or not,” says Whitehurst. “As a broker or manager, you really have to be accessible and responsive all the time, even for those Sunday night phone calls.”

COURTING THE MILLENNIALS This year, the Millennials will overtake the Baby Boomers as the nation’s largest living generation, according to the U.S. Census Bureau projections.

Millennials (now between ages 18 to 34) are expected to number 75.3 million, the Pew Research Center reports.

That puts them past the projected 74.9 million Boomers (ages 51 to 69). These population shifts present challenges and opportunities for Illinois brokers who want to fill future leadership positions and ensure that local, state and even national industry associations have a solid pool of leadership candidates.

“Both brokers and boards should be focusing on the Millennial generation, which is extremely motivated and innovative,” says Carrie Bey-Little, a broker-associate with Baird & Warner in Glen Ellyn. “They want leadership, but they have to be cultivated and groomed into these positions.”

“Both brokers Bey-Little said brokers and boards should should look for candidates who bring their own ideas to the be focusing on table, but who are also willing the Millennial to listen to and learn from their veteran counterparts. generation, which Brokers should also find is extremely new, non-traditional ways of helping their younger agents motivated and “move up the ladder” and even innovative. They make moves into areas other than sales. This could also help want leadership, quell the trend that NAR is but they have to seeing when it comes to office tenure, which fell from six years be cultivated and in 2013 to five years in 2014. groomed into “These folks like to move and they like to do it quickly,” these positions.” says Bey-Little. “Even the – Carrie Bey-Little most stable individuals may be

looking for change every 12-24 months. To accommodate this, brokers can provide new opportunities, such as managing at the technology level or training for specific, new positions.”

In many cases, Prodehl says Millennials serve as the best recruiters of their own peers. Most have built social media circles on sites like Facebook and Twitter and regularly use them to talk about their business with friends and connections.

“I’ve found that once you hire a few Millennials, others will gravitate to you,” says Prodehl, who has also found that these younger recruits expect different tools, training programs, mentoring opportunities, and technology options than their older counterparts. “If you’re going to work with these folks, you’d best learn to use applications such as text messaging instead of traditional phone calls and emails.”

LEVERAGING MILLENNIAL STRENGTH When recruiting Millennials for future leadership positions, Bey-Little said brokers and managers should look for individuals who are willing to listen and eager to share their ideas, particularly subjects such as technology and how to apply it in the real estate industry.

Most Millennials are used to quick-decision environments and like to move quickly, she said, “and have already been using technology for over two decades in their own lives.” As a result, most of these candidates are leaning toward tech-savvy, mobile-office-friendly companies that offer them a variety of options in terms of workstyles and technology.

Finally, Bey-Little says brokers should leverage the Millennials’ penchant for volunteering, getting involved and being socially connected. Some of the best leadership candidates, for example, may be those who displayed leadership experience in high school or college, or who have already served on boards or volunteered at local charities.

“Look for people who are already involved with their churches or local community organizations,” says Bey-Little.

“They’re the ones who are most likely to be the next leaders.”

THE NEW GUARD Kevin Van Eck, 36, is one of the youngest managing brokers at @Properties in Chicago.

While he credits the city’s metropolitan makeup with helping to “bring down” the average agent age at his office, Van Eck says the industry could do more to attract and retain younger agents who have leadership potential.

“I’ve been in the industry for about eight years, and that’s a relatively short time given my role within the company,” says Van Eck, who got his start in the business by running training programs for @Properties.

“I also work with the company on a separate project regarding tech incubation, fostering and supporting startups that will benefit the real estate community.”

On the association side, Van Eck is involved in the Chicago Association of REALTORS® and Chicago’s REALTORS®

ILLINOIS REALTOR® October 2015

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Political Action Committee (RPAC), for which he’ll serve as a chairperson next year.

As an example of what a “younger” leader (both on the corporate and the association side) would look like in the Illinois real estate market, Van Eck shares his insights on what brokers can do to recruit and retain the “new guard.”

For starters, he says brokers need to find a way to talk to sales agents about potential leadership positions (many of which are salaried versus commission-based) and the management responsibilities. The candidates who come into the industry with a few years of management experience in hospitality, hotels, or restaurants, for example, tend to have the “transferable skills” needed to transition into leadership positions.

To cultivate talent and leadership potential, Van Eck encourages brokers to focus on their management pipelines and to use mentoring strategies to help identify and then develop future leaders.

“When companies don’t have this pipeline in place, they wind up making desperate decisions at the last minute (i.e., when a key leader retires),” says Van Eck. “Through good preparation, the process becomes less about ‘trial by fire’ and rash decisions, and more about well thought-out, deliberate mentoring, training and cultivating.”

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

The Association Angle The REALTOR® Association of Southwestern Illinois in Belleville is getting younger members involved by using task forces (versus committees) that are focused on specific issues and trends, said Association Executive Deborah Frazier. So while committees typically require a year or two commitment, task forces tend to be easier to fill because they may require just 2-3 meetings.

“If a young agent’s business is booming, he or she won’t have the time to join a committee,” says Frazier. “Their philosophy is get in, get it done, and move on. So the task forces are perfect.”

Being direct also helps at Frazier’s association, where new members are asked, “Would you like to get involved with the association? And if so, what are you most interested in?” during orientation sessions. Agents are then handed a list of task forces, committees and other ways to get involved. Over time, this initial outreach can help members feel more aligned with their organizations and, in time, transform them into potential leaders.

“The key is to give these folks opportunities to do what they like to do, as opposed to sticking them on designated committees,” says Frazier. “Ask them what they’re interested in, invite them to get involved, and then before you know it you have great candidates for two- to three-year terms on your board of directors.”

AREAA’s 2016 National Chairwoman Illinois’ Own Vicky Silvano!

“I am proud to have been chosen as the 2016 National Chairwoman by the AREAA leadership; I plan on bringing that Chicago Can-Do Spirit with me from Day 1! With over 14,500 members in 35 chapters across North America, AREAA is the largest and fastest growing real estate trade organization fully dedicated to serving the needs of Asian Pacific American community. As a show of gratitude to the state I call home, I am offering any current Illinois Association of REALTORS® who sign up for our 12th Annual National Convention in San Francisco a special discount of $50 off your registration fee.

Use the code: 12753965 when registering. I am doing this because I am confident that after meeting our members and seeing what we’re all about, you will want to connect your business with our organization. And when you see me out there, come say hello!”

Register today AT www.areaa.org/convention Thursday - Saturday, October 22-24, 2015 Hyatt Regency 5 Embarcadero Center, San Francisco, Ca 94111 Convention Pricing Gateway to our Future Reflecting on the Historical Asian American Impact

16 www.illinoisrealtor.org

Member Price: $499 Non-Member Price: $699

You Earned Your Real Estate License

What’s

YOUR Next Move?

By Bernice Ross

You’ve completed all your courses, earned your license and are ready to take on the world of real estate. The rebounding real estate market has generated an influx of newly licensed agents. Choosing the right office can play an important role in your future success.

How do you figure out which brokerage is the best fit for you?

When it comes to finding the right real estate office, the connection a new agent feels with the managing broker has a powerful impact. Other key factors include the company culture, access to quality training and a sense that the firm shares the agent’s core values.

“You can’t put a dollar amount on the intrinsic value that you get from your broker.

You have your brokerage fees, but I would pay four times more for the services I get from my broker because I know he would do anything for me,” said Brandon Shaffer, of Berkshire Hathaway HomeServices Snyder Real Estate in Bloomington. “I have never stressed about

ILLINOIS REALTOR® October 2015

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not having a resource to go through. I can reach him 24-7 if needed. It really set me at ease as I started.”

The personal connection of managing broker to new agent resonated with Tina Moore, a broker with Centered International Realty in Chicago.

“This company gave me a start and that is part of the reason I decided to stay there. Maurice (Hampton) has always been willing to invest in me,” she said. “He constantly pushes our agents to take more classes and to become involved in local organizations. At his suggestion, I attended Women’s Council of REALTORS® meetings, YPN (Young Professionals Network,) as well as becoming both a REALTOR® and a REALTIST®.”

Finding the Right Cultural Fit Sue Miller, managing broker of Coldwell Banker Honig-Bell in McHenry, emphasizes the importance of choosing a culture that best fits you.

“You only get to pick your first broker once. Choosing the right broker and culture is about you, your expectations and your learning curve. This is not the time to be meek, mild or shy. Express your expectations or you won’t get what you want,” she said. “We don’t change easily as adults, so interview many, pick a culture that feels good, and make sure that it works in your world.”

Jayme Ahlden, of RE/MAX Realty Associates in Champaign, wanted a firm that supported her goals.

“It’s important to know what your goals are and to align yourself with a firm that will support those goals. I wanted to do residential sales full-time, so I aligned myself with the firm that was a local market leader in residential sales,” she said.

“You only get to pick your first broker once. Choosing the right broker and culture is about you, your expectations, and your learning curve.This is not the time to be meek, mild, or shy. Express your expectations or you won’t get what you want.” – Sue Miller

18 www.illinoisrealtor.org

For Vivian Smith-Del Toro, of Real People Realty’s Mokena office, branding strongly influenced her decision about where to affiliate. She started with a large national franchise and then shifted to Real People Realty in order to build her own personal brand.

“The brand is really important because people recognize a brand. They also recognize leadership. The company I affiliated with first had all those pieces—a strong brand, a brilliant training program and a fantastic reputation. The people were also great.”

Smith-Del Toro said she was attracted by her firm’s commission structure, which she said best met her financial goals. “I had built my brand in corporate America and believed I could build my own realty brand,” she said. “Their tools, technology and Internet savvy help me do that.”

For new agents, knowing how you get paid and how commissions will be split are a huge part of the decision. There are a range of options to consider. For Smith-Del Toro, the commission structure and marketing freedom with Real People Realty worked, but there are many brokerage options out there.

In contrast, Moore was looking for a smaller firm with a family-based culture.

“As a new agent, what really helped me was that our company’s culture was like being part of a family. That’s the way we treat each other. We have a small office where the culture is harmonious. Everybody knows and cares about the other people,” Moore said.

What Is the Company’s Value Proposition?

How can you discover whether a company’s underlying culture and value proposition is a good fit for you? “Before you hitch your wagon to a particular brokerage, do your homework,” said Ahlden, who offers additional suggestions.

Here’s what to research: • How does the brokerage rate in terms of market share?

• Does the firm have a good reputation locally?

• What is the leadership like?

• You will need someone to guide you—who will that person be?

• What is the commission structure?

If you are joining a team: • What are the statistics on that particular team?

• Is the team high producing?

• How experienced is your team leader?

• Would you be receiving the mentorship you need from said team leader?

• How is lead generation handled?

• What would be your role on the team?

Smith-Del Toro also recommends that you look at the leadership and how organized they are in terms of getting you into the business. Spend time going through the contract, paragraph by paragraph so that you are clear on what it includes, she said.

Shaffer compares shopping for a brokerage to buying a car: “Selecting a broker without comparing their different value propositions is like buying a car and not comparing it to other models,” he said. “Don’t just interview for your boss— investigate the office atmosphere as well. Ask for a tour of the office and note if the people are laughing and having fun or if everyone is sitting at their desk, doing their own thing.

Personally, I need to be in an office where the people are fun and are a personality match for me.”

Make a Difference Smith-Del Toro believes that getting involved in the local community is a key component to her early sales success. She serves on multiple boards including All Chicago, whose goal is to eliminate homelessness in the city.

Ahlden and Shaffer, whose managing brokers encouraged them to become active with their local board, are now both serving as chairs for their respective YPN chapters. As Ahlden recommends, “Whether you are a brand new agent or a 40-year veteran, YPN can help you to excel in your career.

YPN is about energy, education, and fun—get involved.”

Both are also actively involved in raising money for the REALTORS® Political Action Committee (RPAC). Shaffer reached the prestigious President’s Circle level and Ahlden tied for the youngest Major Investor for her association.

“Get involved in the local level—they’re always looking for people. The more involved you get, the faster you will move your career forward,” Shaffer said.

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. She can be reached at Bernice@realestatecoach.com

TRAINING, COACHING, AND MENTORING:

The Cornerstones of Success

Karel Murray, a Certified Speaking Professional, author, and business strategist, said she believes finding the right mentor is critical to new agent success.

Murray was a featured presenter at IAR’s Association Executive Workshop earlier this year.

“To build a rewarding real estate career, find a mentor who can proactively offer invaluable advice and help you to side-step potential problems.

This process can be extremely productive when the exchange of information is a two-way street between you and your mentor. Mentoring helps when you need to be more objective in the choices you make,” she said.

To enhance your mentoring relationship, Murray offers these simple rules: 1. Schedule a regular meeting time and place.

2. Use an agenda and select topics that reinforce your strengths.

3. Do what you promise to do.

4. Provide an exchange of value for both parties in the relationship.

“Deciding which office to join begins and ends with opportunity for mentoring. When we are courageous enough to realize we don’t have all the answers and find someone who is unafraid to explore new territory, magic happens,” she said.

Congratulations to REALTOR® John Dwyer with Coldwell Banker Honig-Bell in Crystal Lake.

He is the winner of the Illinois Association of REALTORS® New Member Campaign giveaway for an IAR Conference & Expo package. IAR is averaging 400 new members a month and each one receives a personal welcome phone call, informational postcard with an opportunity to go online to learn more and receive a new member Rookie Toolkit complete with sample free RVOICE brochures. John received his license May 2015 after owning an HVAC company for many years servicing large commercial property management companies.

“I have always been interested in real estate and the transition has been a good fit for me so far. I have enjoyed learning everything I can to have a successful career in real estate.”

— John Dwyer, Coldwell Banker Honig-Bell, Crystal Lake

ILLINOIS REALTOR® October 2015

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iar Licensing & Training center Real Estate Licensing & Continuing Education The IAR Licensing & Training Center is your TRusTEd souRCE for state-approved education.

2016

BrOKer LiceNse RENEWAL

iLLiNOis BrOKers...

Here’s what you need to renew your license BY apriL 30, 2016.

Brokers first licensed on or after Feb. 1, 2014:

Brokers licensed prior to Feb. 1, 2014:

Brokers licensed after * Feb. 1, 2016:

You will need to have taken 30 hours of Broker Post-license CE by April 30, 2016.

You will need to have taken 12 hours of CE between May 1, 2014 and April 30, 2016.

* YOU DO NOT NeeD TO reNew iN 2016 aND NO ce is reqUireD.

The 30 hours must include the 15-hour Broker Post-license Topics and the 15-hour Broker Post-license Applied Real Estate Practices.

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

Your requirement will be 30 hours of Broker Post-license

by April 30, 2018.

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

by April 30, 2016. www.idfpr.com

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

by April 30, 2016. 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 2016 Broker Renewal

www.illinoisrealtor.org/2016brokerrenewal

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

Social Media and the Code of Ethics

By Rebecca Carraher

Since Jan. 1, 2015, the IAR Ethics Citation Panel has reviewed 68 complaints and issued 27 citations.

The majority of the citations issued relate to violations of Article 12, especially Standard of Practice 12-5. Standard of Practice 12-5 states, “REALTORS® shall not advertise nor permit any person employed by or affiliated with them to advertise real estate services or listed property in any medium (e.g. electronic, print, radio, television, etc.) without disclosing the name of that REALTOR’S® firm in a reasonable and readily apparent manner.

This Standard of Practice acknowledges that disclosing the name of the firm may not be practical in electronic displays of limited information (e.g. thumbnails, text messages, tweets, etc.). Such displays are exempt from the disclosure requirement established in this Standard of Practice, but only when linked to a display that includes all required disclosures.”

Advertising on social media, especially Facebook, is subject to the same advertising standards as those that appear in print. When putting listings on social media platforms, REALTORS® have a responsibility to identify themselves as real estate professionals and to display their company affiliation in a reasonable and readily apparent manner.

The Ethics Citation Panel, as well as hearing panels, have consistently ruled that the Facebook format does not limit the electronic display of information.

Many agents assume that displaying a picture of their brokerage on the backdrop of their Facebook page meets Code of Ethics requirements. However, this alone is not sufficient to meet the standard as backdrop images do not show up in Facebook newsfeeds. Each individual posting must include the brokerage name.

For more information on the Ethics Citation Program and the Ombudsman program offered by IAR, please go to http://www.illinoisrealtor.org/disputes. Find the 2015 Code of Ethics and Standards of Practice at http://www.realtor.org/governance/ governing-documents/the-code-of-ethics.

At a Glance: IAR’s Ethics Citation Program How it works: If a filing is found to meet the program’s standards, the Ethics Citation Panel will review the case. If the Ethics Citation Panel believes a violation has occurred, a citation will be issued to the Respondent, along with a set fine.

The Respondent has the opportunity to pay the fine within 30 days or request a hearing before an Ethics Hearing Panel.

Fines range from $250 to $1,000, depending on the nature and severity of the violation.

If a hearing is requested by the Respondent, the complaint will be sent to the Grievance Committee for review. Learn more about how to file a complaint at www.illinoisrealtor.org/disputes.

ILLINOIS REALTOR® October 2015

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Gearing Up forWinding Down Nearing retirement? Want to slow down?

Here’s how to put the pieces in place for your exit strategy

By Stephanie Sievers | Senior Editor

When John C. Kmiecik’s last Century 21 franchise agreement was coming up for renewal, it prompted him to take a hard look at his future plans.

He’d spent 32 years building his business, Century 21 Kmiecik REALTORS® in Chicago, into a successful company with two offices and more than 70 agents. But the franchise decision and the prospect of locking down another multi-year agreement got him wondering if now was the right time to shift gears, step back from the duties of ownership and try something different.

In September 2012, he merged his company with Century 21 Affiliated and began the evolution from managing broker and owner to agent and mentor. It was a transition, but one that Kmiecik — who says he is staying busier than ever these days working with buyers and sellers again— says was the right move for him.

“I don’t think those of us who have made the decision to relinquish ownership ever really retire from real estate.

There is always a need for the experience levels that we’ve had, the education and the knowledge and skills we provide,” he said.

Kmiecik and many veteran owners or agents like him are reaching a point in their careers where they are choosing what their next path will be: retire, slow down or try something new. Preparation can help ensure the exit transition is a smooth one.

22 www.illinoisrealtor.org

Jim Merrion, regional director of RE/MAX Northern Illinois with 105 offices and 2,300 agents, said he is seeing an increase in REALTORS® moving ahead with succession and office transition plans.

For some who have been thinking about retirement, the stronger real estate market means their business has been doing well, making it an attractive prospect for potential buyers. Others have weathered the most recent economic downturn and don’t want to go through it again, he said.

Whatever the motivation, Merrion said the change is a healthy sign and brings new energy and ideas to the industry.

One thing that doesn’t make sense is just closing your doors and walking away without trying to sell what you have built, Merrion says.

“It’s foolish not to monetize the investment that you have made in time and money over the years,” he said. “Even if you don’t have a big company; even if you only have two or three producers, I can guarantee there is a company around you who is a competitor and would love to have those people on their team.”

Determining the Value of Your Business If you are an individual agent thinking about selling your “book of business” or an owner selling your brokerage, Merrion recommends planning one year out. That will give you time to determine the value of your business, find potential

buyers, work out contractual issues, and ultimately, decide if you do want to move forward.

First, you must determine what your business is worth to a potential buyer. For an agent, look at your last three years of business and what you’ve been able to earn. Identify your net and gross earnings and isolate the marketing, office assistance or other business expenses that come out of it. Work with your financial advisor or accountant or find an outside company that assists with real estate business valuations.

Be objective about your sources of business. An agent who has a unique business system for finding clients could have a business that is worth more to someone else than one built entirely on personal referrals, Merrion said.

Create a “heat map” to get a better picture of where your inventory and sales are in comparison to potential buyers. Use one color to highlight the map with your local listings, another color to identify your sales and a third color to highlight a potential buyer’s sales area to find overlap. As you work through the valuation process, names of potential buyers and prospects will come to you, Merrion said.

If you are a broker-owner looking to sell, Merrion suggests first looking within your own company for someone to take over. Another option is to look for strategic outside buyers — competitor offices looking to increase market share, larger companies or smaller upstarts. If you are part of a national franchise, you may want to speak with some of the other broker owners to see if they might be interested in purchasing your franchise.

Whether you make it public that you want to sell or play it closer to the vest is an individual decision, but Merrion recommends having a non-disclosure agreement signed by potential buyers at the first meaningful meeting.

Prepare for the Unexpected Slowing down or retiring isn’t just a business decision; it’s also an emotional one.

When Kmiecik decided to merge his company, he designed a gradual transition that worked for him and his agents that allowed him to step back from his daily management duties while staying in the business.

But the hardest part of the transition and one Kmiecik said he wasn’t completely prepared for was the psychological change of no longer being a primary decision maker. After three decades of making every management decision from long-range planning to choosing technology providers, it was an adjustment not to have that role anymore.

“You have to expect the unexpected,” Kmiecik said.

“There’s always something out there that’s going to be a little bit not what you thought it would be, or maybe it’s more than you thought it would be and you have to be prepared to accept that.”

Kmiecik says he is happy with how he shaped his transition and knows that it was the right decision, at the right time and with the right people. Freed from daily managerial duties, he can focus his time on selling real estate, being involved in the REALTOR® organization, serving as a mentor to others in the profession and spending more time with his family.

“I’m at the point where I only wear the hats that I choose to wear,” Kmiecik said. “I like being a little bit independent. I like being a little more forward thinking about what I can and can’t do, and I like being able to say yes when I want to say yes and no when I want to say no.”

Make Sure it’s a Win-Win for Both Sides When REALTOR® Phil Johnson of Swansea was looking to sell his commercial real estate brokerage in 2007, he kept it in the family by selling to his primary market competitor, his brother. Decades earlier when Johnson took over their father’s real estate business, it was a gradual transition over several years, but this time Johnson — who now specializes in land acquisitions for government entities — wanted a quicker exit. He and his brother met with their respective attorneys and accountants and structured a deal that worked for both of them.

Johnson didn’t retire, but working as a sole proprietor from his home means he has little overhead and more freedom to set his own work schedule.

“There were some other people who had approached me over the years, but the time just wasn’t right,” Johnson said. “It’s got to be a win-win for both sides or it’s doomed to fail.”

STILL HAVE QUESTIONS? The National Association of REALTORS® has an online “Sell Your Business Tool Kit” that covers issues such as preparation, valuation, finding buyers and more at: http://realtormag.realtor.org/tool-kit/sell-your-business

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ILLINOIS REALTOR® October 2015

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Mike Scobey | Assistant Director, Advocacy and Local Issues

BE A TRUSTED MARKET ADVISOR WITH RVOICE RESOURCES Free shipping on brochures and materials in October Public opinion surveys consistently show home buyers and sellers rely heavily on REALTORS®.

For most home buyers, the purchase of real estate is one of the largest financial transactions they will make.

A 2014 survey conducted by the National Association of REALTORS® of recent home buyers and sellers provides insight into information about their experiences with this important transaction. One of the key findings was that real estate brokers were viewed as a useful information source by 98 percent of buyers who used a broker while searching for a home. This strong perception is in part due to the resources you bring to your clients. IAR can help with that.

IAR’s RVOICE Program provides FREE materials that you can use with your clients. These informational brochures cover a variety of useful topics to help you and your clients understand the process of home selling/buying as well as features of homeownership. The brochures enhance your ability to be a trusted advisor to your clients. Best of all, in October, shipping is free on RVOICE materials.

There are other materials covering the following topics: • Property Taxes (video and brochure) • Special Service Areas (SSAs) • Commercial Broker Lien Rights • What to Look for in Purchasing a Condominium • Illinois Law Regarding Carbon Monoxide Detectors • Guide to Property Management and Residential Rentals These can all be found at www.illinoisrealtor.org/rvoice/ downloads

You can download any of these and print them on your own. You can also order them in bulk from the IAR REALTOR® Store and have them shipped to you.

Quantities are limited to 100 per brochure. Shipping charges normally apply, but for the month of October, shipping will be free. Take advantage of this deal and save money.

XX To read more about the work of RVOICE, visit www.illinoisrealtor.org/RVOICE

Here are a few examples of what we have in the IAR REALTOR® Store:

Illinois As sociation of REALT 522 S. Fif ORS ® th Street Springfield , IL 6270 1

Getting It Sold – Your Resource for Staging Curb Appeal and Selling Success! This brochure helps consumers prepare their home for sale with tips on enhancing curb appeal, staging, showing and updating a home for sale.

Homeownership: Understanding What You Can Afford, Mortgages and Closing Costs. A guide to help of REALTORS you determine whether you can qualify andIllinois beAssociation approved for a mortgage. A companion piece discusses the costs of owning and maintaining a home.

®

522 S. Fifth Street Springfield, IL 62701

www.YourIllinoisHome.com

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. This also includes a summary of changes regarding maintenance and recordkeeping requirements for septic system owners.

HOMEOW

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ILLINOIS REALTOR® October 2015

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HOMEFRONT

By Bill Kozar | Content Marketing Specialist

CROSBY TO GET NATIONAL HONOR IN SAN DIEGO NEXT MONTH Jean Crosby, CRB, CRS, GRI, is a partner and owner of Berkshire Hathaway HomeService Crosby Starck Real Estate.

She was the 1999 IAR president and has played important roles in her local and state organizations. She served as Director of Real Estate for the Office of Banks and Real Estate. In 2014, she was the national president for the Council of Real Estate Brokerage Managers. She’s served on the board for IAR, the Rockford Area REALTORS® and various NAR committees.

With more than 30 years in the real estate business and heavy involvement in a variety of local, state and national REALTOR® activities, Jean Crosby’s friends are proud she’s being honored with the NAR Distinguished Service Award this November.

2004 IAR President John C. Kmiecik, of Century 21 Affiliated in Oak Lawn, says: “I was thrilled and excited for Jean when it was announced she was the recipient of NAR’s Distinguished Service Award. She’s always been accomplished, committed to our industry and dedicated to the mission of all REALTORS®. Over the years, these qualities have deepened to make a profound impact on so many of us who have had the privilege of working with her.”

2015 Illinois REALTOR® of the Year Loretta Alonzo, GRI, CRB, managing broker of Century 21 Affiliated in La Grange Park, says: “The NAR Distinguished Service Award is not given to an Illinois REALTOR® every year . . . only to those who are very deserving. I am absolutely thrilled she received this award. I consider myself lucky to know her and have been mentored by someone so well respected in our industry.”

When asked about winning the award, Crosby said: “Honestly, it was the farthest thing from my mind. Never, in a million years did I think I would receive a Distinguished Service Award.

Not that my work wasn’t meritorious but that there are many talented

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volunteers in the NAR family. We all pull in the same direction, and do the work because the work is there to do.

When I think of the many individuals who I have been fortunate to work with, I am humbled by the honor and thankful for the recognition.”

Looking Forward Means Learning, Adapting, Changing

“In April of 1983,” says Crosby, “I went to work as a receptionist at a local real estate company. To make a long story short, I got fired as the receptionist in July of the same year; a short-lived career as a receptionist.

(But) what the managing broker did not know is that I had registered for the real estate licensing class to become more familiar with my job. I completed the course work, passed the state exam and became a REALTOR® with the competition. The rest is history.”

Crosby says her success in learning the business and in involvement with associations came from time management, accessibility and adaptability.

Crosby says other advantages to her volunteer work were the learning experiences and friendships made with colleagues.

Adversity Meets Its Match

“On a professional level,” Crosby says, “growing our company during one of the great recessions

of our time was rewarding and hard work. Serving on the extended leadership team as a liaison was a great honor and most gratifying.

Serving as the Director of Real Estate for the Office of Banks and Real Estate is a career highlight. I have been very fortunate to have been given many wonderful opportunities.

And I am grateful for those who believed in me.”

Among those who’ve supported Crosby over the years are members of her family. Crosby and her husband, Dick, have worked together for the last 27 years, building their business (Berkshire Hathaway HomeService in Rockford). Dick is also a past president of IAR (1993). Today, their business also includes son-in-law, REALTOR® Kevin Horstman, while their daughter, Jessica Horstman, runs a referral company.

Friends have also come to admire her leadership qualities. Kmiecik says Crosby is loyal, willing to change, thinks strategically and takes bold action when it’s needed.

“I’ve learned many things from Jean,” he says. “I’ve learned that building consensus is the best way to reach a communal decision. I’ve learned that you must always be kind, speak well of others and strive to make a difference in the lives of those you touch.

“Jean continues to serve as a great example to all of us,” he says.

IAR turns 100 in 2016!

Visit www.illinoisrealtor.org/Anniversary for event updates and sponsorship opportunities

OCTOBER 2015 October 5-6 • Oak Brook Inaugural Gala for Incoming 2016 President Mike Drews marks the start of the IAR 100th Anniversary Year of Celebration, including logo reveal

APRIL 2016 April 25 • Springfield Official day of the Association’s incorporation in 1916

April 26 • Springfield IAR Capitol Conference & Anniversary Reception IAR History Exhibit - open to the public April 25-26

DECEMBER 2015

Illinois REALTOR® magazine focus on IAR Advocacy & Governmental Affairs

December 2-3 • East Peoria Graduate REALTOR® Institute Local Associations receive 100 Year Anniversary marketing packages

MAY 2016 Tribute at NAR Legislative Meetings

JANUARY 2016 IAR Milestones Timeline in the January Illinois REALTOR® magazine

January 12-13 Professional Standards Workshops Springfield & Oakbrook Terrace

January 19-21 • East Peoria IAR Public Policy Meetings

MARCH 2016 March 9-10 • Collinsville IAR Spring Conference & Expo “Celebrate 100 Years: Advocacy, Ethics and Service”

JUNE 2016 June 20-22 • Springfield IAR Business Meetings

June 21 • Springfield REEF - REALTOR® of the Year Banquet

JULY 2016 Illinois REALTOR® magazine focus on REALTOR® Education

OCTOBER 2016 Inaugural Gala for Incoming 2017 President Doug Carpenter marks the close of the anniversary celebration with a look to the future of real estate

COMMERCIAL CORNER NAR OFFERS SOME OF THE MOST OUTSTANDING EDUCATION AND DESIGNATIONS for commercial practitioners in the industry. Three commercial real estate practitioners share their experiences with three commercial designations: SIOR, CCIM and CRE. Arthur J.Thoma, Jr. CCIM, SIOR, Broker Coldwell Banker Commercial Devonshire Realty Champaign, Ill.

What is a SIOR? Have your wondered what those letters behind a real estate professional’s name mean? They can be confusing, but those letters have a specific meaning. In the case of SIOR, it refers to someone who is a member of the Society of Industrial and Office REALTORS® and has completed a rigorous educational and transactional achievement. SIOR is the leading professional office and industrial real estate association and there are only 2,800 SIOR designees in the world. The SIOR designation is recognized by corporate real estate executives, commercial real estate brokers, agents, lenders, and other real estate professionals as among the most capable and experienced brokerage practitioners in any market.

A professional affiliate of the National Association of REALTORS®, SIOR is dedicated to the highest professional and ethical standards.

SIOR maintains a commitment to business and industry by providing outstanding professional services.

The corporate world recognizes the prestige, knowledge and skill of using an SIOR designee in their real estate requirements. A SIOR can assist the client to successfully achieve their real estate needs anywhere in the world with an outstanding referral network of similar, highly-qualified real estate professionals.

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On average from 2008-2012, SIOR members reported leasing or selling an average of 1 million square feet of space for a total dollar volume of $31 million in 30 transactions. As a group, SIOR designees closed more than 78,000 transactions. SIOR maintains and promotes a professional designation of the highest quality for the benefit of its members and their clients. The SIOR designation stands unchallenged for excellence in the performance of real estate services, and is universally recognized as the prerequisite in the selection of a commercial real estate broker, agent, or consultant.

ABOUT ARTHUR J. THOMA, JR.

Arthur J. Thoma, Jr., CCIM, SIOR, has been in real estate since 1976. He received his CCIM in 1981 and became a SIOR in 1998. He has worked in the downstate market with Champaign-Urbana market being his base. He has been with CBC Devonshire Realty since 1989 specializing in corporate real estate.

Mike Mallon CCIM, CRX DK Mallon Elmhurst, Ill.

What is a CCIM? Mike Mallon began his commercial real estate career in 1985 when he made the jump from urban planning. “I felt like I needed to take a class or read some books to get a better understanding of commercial real estate. My boss recommended that I take a CCIM class,” he said.

That first Certified Commercial Investment Member (CCIM) class hooked him and provided him with the tools and knowledge to excel. “I’m not sure that I would have had the success in my career if I hadn’t pursued and earned the CCIM designation.”

A CCIM designee is a recognized expert in the commercial and investment real estate industry. The CCIM curriculum is demanding, rigorous and ranked as one of the best and most practitioner-oriented education curriculums in the real estate industry. Many consider the CCIM designation as the equivalent to a master’s degree in commercial/ investment real estate analysis and marketing. The program consists of courses that can be taken in a classroom setting, online or a combination of both. Both options have pros and cons, but nothing can take the place of the natural “face-toface” classroom networking.

“I still stay in contact with several of my fellow students and even have closed deals with them,” Mallon said.

In addition to the core classes, a portfolio of qualifying transactions is required before sitting for the final exam.

“Achieving the CCIM designation has been a highlight to my real estate career and would certainly recommend it to everyone.”

Worldwide, only 13,000 commercial real estate professionals have earned the CCIM designation. To learn more about becoming a CCIM, please visit www.CCIM.com.

ABOUT MIKE MALLON

Mike Mallon, CCIM, CRX is the Senior Vice President and Managing Director of DK Mallon. DK Mallon is a retail real estate firm that focusses on development, management, brokerage and consulting.

The firm is part of Draper and Kramer, Inc. which has been in business since 1893. Mike is the President-Elect for the Illinois CCIM CHAPTER.

Peter C. Burley CRE FRICS, Director Richard J Rosenthal Center for Real Estate Studies Chicago, Ill.

What is a CRE? The Counselors of Real Estate (CRE) organization is comprised of approximately 1,100 professionals in the industry worldwide. Coming from a variety of practices, including valuation and appraisal, finance, brokerage, development, asset management, economic research, and a host of other disciplines, counselors provide intelligent, unbiased, and trusted advice for their clients or employers. The organization was created to serve as a resource to its members and the industry. It offers professional development, knowledge sharing, and networking in a truly collegial environment.

Counselors with the CRE designation are not just dealmakers, brokers, appraisers, academics or researchers. They go beyond the strict definitions of their trade to offer clients, employers and each other the knowledge and wisdom they have acquired over the course of their careers. In each counselor, one will find a senior member of a firm, with a minimum of 10 years practice, and who is widely recognized for excellence, knowledge, integrity and judgment.

CRE designees reach out in service to the broader community. For instance, the CRE Consulting Corps provides expertise to municipalities, non-profits, educational institutions, and others to design effective real estate strategies. The Counselors in the Classroom program brings

high-level real estate knowledge and expertise to various colleges and universities.

Becoming a Counselor of Real Estate (CRE) is not easy. Membership is by invitation and consideration is based on factors including years of experience, seniority and industry recognition. If there is interest in learning more or applying for membership, one should visit the CRE website at www.cre.org.

REFERRAL CLASSIFIEDS

ABOUT PETER C. BURLEY

Peter C. Burley, is director of the Richard J Rosenthal Center for Real Estate Studies, REALTOR® University, in Chicago. A real estate market and economics research professional with extensive executive experience building and managing strategic research platforms for the real estate industry, he is recognized for his analyses of national and regional economic, demographic, industry and property market trends and for his development of real estate portfolio investment strategies.

Burley is a Counselor of Real Estate, a Fellow of the Homer Hoyt Institute, a member of the Urban Land Institute, a member of the Advisory Board of the Real Estate Research Institute, and is the former editor in chief of the professional journal, Real Estate Issues. He sits on the board of directors of the American Real Estate Society.

About the author: REALTOR® Alex Ruggieri, CCIM, CIPS, CRE, S.E.C., MBA is Senior Investment Advisor with Sperry Van Ness/Ramshaw Real Estate in Champaign. He is currently serving on the IAR Global Working Group.

Past service includes the NAR Commercial Committee and IAR Commercial/Industrial/Investment Committee. Alex can be reached at alex.ruggieri@svn.com.

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Call today to reserve your spot! (410) 772-0820 The publication of any advertisement of a product, service or education idea is not in any way to be construed as the approval, guarantee, or endorsement of IAR of such product, service or idea.

ILLINOIS REALTOR® October 2015

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YOUR CONTRIBUTIONS CAN HELP EDUCATE FUTURE RECIPIENTS OF THE

KINNEY SCHOLARSHIP

By Bill Kozar | Content Marketing Specialist

“YOU HAVE TO KEEP LEARNING. IF YOU QUIT LEARNING, YOU QUIT GROWING.” Whether it’s a boost in self-confidence, a renewed determination or a reduction in financial anxiety, the winners of the James M. Kinney Scholarships have enjoyed a variety of benefits while pursuing their college degrees.

“Winning a scholarship greatly affects a person’s confidence,” says Jenna Ford, who earned an advanced practice nurse license in 2014 after earning a bachelor’s degree from Illinois State University and a master’s degree from OSF St. Francis Medical Center in Peoria. “Due to the scholarships I received, I did not have to work during the academic year, and that allowed me to be very successful with my grades.”

Since it was established in 2004, the James M. Kinney Scholarship has provided 164 students with a total of $164,000 in financial assistance.

Chelsea Domescik is pursuing a degree in Global Studies at the University of Illinois-Springfield and wants to be an English teacher in Japan, then work with nonprofit organizations to improve education overseas. “The scholarship definitely boosts your confidence. I remember

Jim Kinney (center) with past scholarship winners (l to r) Sam Shemwell, Amanda Lading, Amanda Arns and Maxwell Fessler

standing before my high school graduating class, teachers and parents as they announced the scholarships I received and feeling my chest puff up a bit.”

Erin Grider graduated from Eureka College in 2013 and is in her second year of teaching at Brimfield Grade School in Brimfield, Ill. “The scholarship helped pay for school. The money made a big difference.”

The namesake of the scholarships, current IAR President Jim Kinney, says he enjoys meeting the recipients the most. “I look at the kids who win the scholarship as 30 www.illinoisrealtor.org

– Jim Kinney

extended family. What I enjoy most about the process is finding out their dreams. It gives you hope for the future.

They have great ideas about how to change the world for the better.”

The scholarship was created by the Illinois Real Estate Educational Foundation (REEF) board to honor Kinney, who served three terms as REEF president. The scholarship is for children and grandchildren of REALTORS®, REALTOR® Associate members-in-good-standing of the Illinois Association of REALTORS®, or any child or grandchild of an employee of a local, state or National Association of REALTORS® in Illinois. Recipients can pursue an education which will lead to productive careers in any area.

“I’m passionate about education, and I’m passionate about young people,” he says.

A graduate of Northwestern University, Kinney worked in advertising before switching to real estate in 1979. He served on several committees that helped develop and support designations for real estate professionals and personally has earned an Accredited Buyer’s Representative (ABR®), a Certified Real Estate Brokerage Manager (CRB), a Certified Residential Specialist (CRS), a Graduate, REALTOR® Institute (GRI) and Seniors Real Estate Specialist (SRES).

“I like being on the cutting edge of things,” Kinney says.

“I’m a hiker. I like to be the first over the hill, the first to see something. I’m excited about the unknown and education has always taught me about the unknown. I believe the most educated practitioner is the most effective practitioner.”

Kinney, vice president of luxury home sales at Baird & Warner in Chicago, strives to be the best in his profession by learning as much as he can about real estate and anything related to it. “To be seen as an expert, you have to know at least one more thing than everybody else in the room. So you have to keep learning. If you quit learning, you quit growing.”

And in order to keep up with the growing demands of education, REEF relies on the generosity of REALTORS® who value continuing education and skill development, too.

REEF is always looking for donors to keep its 13 different annual scholarships available.

If you would like to make a donation to REEF and its scholarships, go to www.ilreef.org.

REALTOR® COMMUNITY FOLLOW US:

Illinois REALTOR® Vicky Silvano to Lead AREAA in 2016

Congratulations 2015 REALTORS® of the Year Illinois REALTOR® of the Year Loretta Alonzo and this year’s 26 local REALTORS® of the Year were honored at a ceremony at the Abraham Lincoln Presidential Museum in Springfield in June.

Vicky Silvano, of Century 21 S.G.R., Inc. in Chicago, will serve as the 2016 National Chairwoman of the Asian Real Estate Association of America (AREAA). She is a member of the Chicago Association of REALTORS® and is a Major Investor in the REALTORS® Political Action Committee (RPAC).

Increasing REALTOR® Political Involvement at the Local Level Nearly 100 Illinois REALTORS® attended a REALTOR® Political Involvement Committee (RPIC) Strategic Planning Session in July to learn how to generate more political involvement among members at the local REALTOR® association level. Grassroots involvement and mobilization plays a key role in the ongoing success of REALTORS® on industry issues.

IAR Builds Global Bond with Mexico In June, representatives of the Illinois Association of REALTORS® signed a memorandum of understanding with La Asociación Mexicana de Profesionales Inmobiliarios (AMPI) at the 2015 AMPI International Summit in Nuevo Vallerta, Jalisco, Mexico. The memorandum recognizes the strategic importance of Mexico and Illinois and the value of sharing information on education, marketing and real estate best practices with REALTOR® colleagues in Mexico.

The Mainstreet Organization of REALTORS® signed a similar agreement.

MORe’s Krieter Receives Rhino Award for AE Leadership Congratulations to Pam Krieter, CEO of the Mainstreet Organization of REALTORS®, on receiving the IAR Rhino Award which recognizes an association executive who is passionate about service to members and the REALTOR® community.

ILLINOIS REALTOR® October 2015

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OF ILLINOIS