Keeping up with Chicago's North Shore Real Estate Market!

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Thursday, October 14, 2010

Monday, October 11, 2010

My life in real estate: So what's a broker?

Before I got into real estate, I would hear a lot of terms bantered about interchangeably to describe someone in real estate - i.e., broker, real estate agent, Realtor, etc.  While they are assumed to be the same thing, they each actually mean something different.  

So, in case you're wondering...

Illinois has a Department of Financial and Professional Regulation.  The Department's mission is to oversee the licensing of professionals in nearly 100 industries.  They license everything from barbers to banks and architects to veterinarians.  They also license the real estate industry -- there are over 10 types of real estate licenses that the department issues including:  real estate broker, real estate leasing agent, and real estate salesperson.  Consumers can look up the licenses of any agent by going to the IL Division of Professional Regulation site.  It's actually kind of interesting, because it can tell consumers whether the agent is active and whether they have ever been disciplined by the State.

The vast majority of agents within our area have real estate salesperson licenses.  I would venture to guess in each local office, maybe around 15-20% of the agents have a broker's license, the rest have the salesperson license.  The difference between the two is the amount of educational classes each person has taken and the types of things the license allows the person to do.  For example, each office manager must have a broker's license and there must be a broker within a real estate office in order for the office to be in compliance with the law.   These individuals are sometimes called the office manager or office managing broker.   A real estate professional cannot work independently or set up an office without a broker's license.  Also, each real estate salesperson must have a sponsoring broker.

All commissions are paid directly to the sponsoring broker.  So for example, my sponsoring broker is Prudential Rubloff.  Any commission is paid to them.  Only the sponsoring broker can pay the salesperson.   

Every licensee needs to renew their license every two years with about 30 units of continuing education.  Maintaining ones real estate license is considerably more stringent then, for example, maintaining a driver's license.

The other term one often hears is Realtor.  This is actually a subset of Illinois agents and brokers.  A person can have a license, but not be a Realtor.  Only real estate licensees who are members of the NATIONAL ASSOCIATION OF REALTORS® are Realtors. Realtors subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate than the individual states.

This standard is known as the Realtor Code of Ethics, which consists of 17 articles that outline a Realtor’s obligations to clients and customers, the public, and other Realtors. Each article is further broken down into several standards of practice that outline conduct expected of a Realtor.   In our area, this is enforced through the North Shore Barrington Association of Realtors (NSBAR) to ensure the interests of clients and the public are protected.  Anyone can charge a Realtor with an ethics violation, and there are procedures in place to determine if the code has indeed been breached.  The violations are taken seriously and adjudicated by NSBAR.

As a salesperson within my company, I am expected to keep my license in good standing and to become a member of NSBAR, the Illinois Association of Realtors and the National Association of Realtors. 

The law has recently been changed in Illinois.  By 2012, the salesperson designation is going to be eliminated and all real estate professionals with this type of license needs to upgrade their license to a broker's license.  Concurrently, brokers who are managing offices need to upgrade their licenses to be a managing broker's license.  This law will be taking effect in the couple of years through a transition period.  

So when some says they are Realtor, it means that they have memberships at the national level and have additional standards and training with that designation.

Ever wonder what CRS, GRI, ABR, etc. mean?  I'll save that for another time....

Friday, October 1, 2010

My life in real estate: Memories of Wendy

Before I got my license, I really didn't appreciate how real estate offices worked.  What much of the public doesn't understand is that real estate agents are independent contractors.... not employees.  They can move around and change brokerages as they like.  Brokerage offices vie to get the top agents and to add new agents to their ranks.  It's actually somewhat competitive between the various brokerage office managers as to which agent they can bring in to represent their particular company.

Understandably, leading a local real estate office is not easy -- it's a bit like herding cats.   Each agent has a contract with the brokerage and runs their own business, so they often have different marketing materials and approaches as to how they manage their own businesses.   Theoretically, you can have more than two agents in an office vying for the same listings or trying to work with the same buyers.   It can become challenging -- sometimes the office manager can even end up being a referee between agents within their own office.   Every agent I know, who has worked with multiple brokerages, would tell you that the most important factor to their selection of a brokerage was the personality and leadership qualities of the office manager.
This week was a particularly difficult time for all my colleagues in our Lake Forest office... dare I say, for most of the Realtors in Lake Forest.  Our beloved office manager, Wendy Bergseth, passed away.  You can read something about her.

When I first went into real estate, the only broker I interviewed with was Wendy.  After spending an hour in her office, she said something like, "After you speak with the other brokerages and are making your decision where to work..."  I didn't let her finish her sentence.  I told her, I wasn't going to meet with any of the other companies -- I wanted to be on her team.  While the decision was instinctual and hardly well-informed, it was one I never regretted. 

To know Wendy, was to love Wendy.  She was larger than life: loving, caring, loyal, tenacious, smart, joyous, enthusiastic, warm, generous -- magical.   Wendy did everything in a big way -- even her signature would take up two lines.   Once you became part of Wendy's team, you stayed with her.  Agents may leave the business or leave Lake Forest, but they would not leave Wendy.

If you had a particularly difficult transaction, you could sit in her office and she would listen, help you to strategize as to how to meet the challenge and then follow up with you later to see how everything went.   She would join you on listing presentations and notice something nice about the house to complement the sellers whether a rug, a picture, a room -- whatever.  She would hug your buyers when they bought a house; hug you if you had a tough day or lead a loud cheer when you sold a house.  She took great pride when lots of agents had sales -- she didn't think an office with just a few superstars was healthy -- she wanted every agent to be successful.   As Stephen Covey would say, she had "an abundance mentality."

In 2006, her Lake Forest office was the highest producing office in all of Lake County.  In February of  2007, she left that office to start-up a brand new Lake Forest Prudential office.   It came as a shock to many of the agents in her former company and some didn't take the news very well.  Having had a corporate background, I didn't find the move particularly shocking or difficult to accept.  I called Wendy and asked, "When do I start?" For me it was not that difficult to change brokerages.  I had joined an office to be on Wendy's team, and that's where I wanted to stay.

When Wendy began the journey of creating the Prudential Lake Forest office, it started with her vision.  She was going to create a beautiful space and a loving and supportive atmosphere.  She was going to recruit agents who would work hard, play hard and share and support each other.  Slowly, lovingly and with amazing tenacity, Wendy created this beautiful place for us to work.   For her to make this dream a reality, she had to push through so many obstacles from reluctant landlords, city bureaucrats and commissioners, false rumors, unkind and even vindictive behavior against her.  She never wavered. She focused on the vision.   She created an amazing office from nothing.   The night of our grand opening party was fantastic.  She hired a band and we danced. 

Within three years,  she built an office with over 50 agents and we are now ranked the #2 office in Lake Forest. Pretty amazing track record.  Even in the midst of this difficult real estate market, it has been nothing but a joyous experience to be part of her team.

Wendy was often underestimated by her competitors.  I'm not sure they realized how really smart she was.  While I loved her effusiveness and enthusiasm, it was her intelligence that I really admired.   While she was warm and loving and supportive, she was also a brilliant marketer, strategist and business woman.    As a consultant, I worked for a lot of different people throughout my career -- some good, some bad and some great.  That said,  Wendy was one of the best leaders I've ever known.  She knew how to surround herself with a wide variety of people and personalities and bring out their very best qualities.  To say that our office -- actually our company, because her reach was far greater than Lake Forest -- is going to miss her,  is a gross understatement.

She was unique.   She will be in my heart always.  I doubt that I will ever see the likes of someone like that again.    With Wendy now in heaven, I know the world is going to start moving in a whole new direction.  I love you, Wendy.