In order to adequately prepare someone to represent the public in a real estate transaction, Illinois is in the process of transitioning to an all broker state.

There will be two categories of real estate sales licensees; broker and managing broker.  Increased education and an experience requirement have been incorporated into the rewrite of the Illinois Real Estate License Act.

Real Estate Course work and proficiency exams will be determined by Administrative Rule and will be offered through licensed Illinois real estate schools. 

The Revised Act is awaiting the Governor's approval and when signed will become effective on December 31, 2009.

We will keep you posted as more details become available.

Mike Fair, Director

Illinois Academy of Real Estate   

Have you noticed the "Equal Housing Opportunity" logo at the bottom of the Active Rain Blog Page
(Good job people) or do you just take it for granted.

I'm sure that most of us understand the basics of equal opportunity and fair housing and would never intentionally violate the law, however as I surf the net and visit various websites, I have noticed a common area of non-compliance with HUD advertising guidelines.

It is important for both broker owners and associated licensees to understand that advertising has been defined as any media that promotes an item for sale.

Do you put or link listings to Facebook? Advertising.  My Space?  Advertising.  Twitter? Advertising. company or personal web page? Advertising.  Blog? Advertising.  Do you use the equal opportunity logo or language?  If not, you probably should. 

Broker Owners, do you have a written policy regarding advertising and advertising requirements that your associated licensees understand and comply with?  If not, you probably should.

Just a little tip I hope you find helpful.  Mike Fair, Illinois Academy of Real Estate, an equal opportunity educator. 

It appears to me that a large percentage of the blog postings dealing with the challenges of the short sale, criticize the lender for being slow and sometimes almost unwilling to cooperate with the homeowner requesting a short sale.  I have an uneasy feeling that there is something inherently wrong with this picture.

Before I go any further, there are several points I want to make clear:

• I am not defending the banking industry and their response to short sales
• I empathize and sympathize with the homeowner who is engulfed by a financial crisis not of his own making
• I am not criticizing or judging anyone's business practices unless they are unethical and/or ileagal
• I have no idea as to an equitable solution for those trapped in distressful financial situations

Maybe I'm wrong, but I sense a spirit of entitlement that I do not believe is justifiable.

Let me use myself as an example.  John, a friend comes to me asks to borrow $10.00.  He's a little short this month, but he promises me that he will repay me next month.  On the basis of that promise I lend him the money.

Payday of the next month comes, but I don't hear from my friend.  I have my own bills to pay, and the $10.00 would sure help!  I call him at home, I leave messages, I e-mail, but no response.  I just can't get in touch with him.

A few days later, I receive a call from a mutual friend, Bill.  He tells me that John had some unexpected expenses and was laid off and was unable to repay the $10.00 he had promised to pay.  Bill then tells me that if I am willing to accept $2.00 and forgive the debt, that John can pay that $2.00.

I tell Bill to tell John that that he promised to pay me $10.00 and that's what I expect.  Bill tells me that it is really in my best interest to accept the $2.00.  I can accept the $2.00 or take him to court. Hmmm? filing fees $25.00, time off work, I could face a$50.00 - $100.00 loss to take him to court.  Maybe $2.00 is better than nothing, but I'll tell you one thing, I will never ever loan John money again and will tell all of my friends not to loan him money, because he does not keep his word and cannot be trusted.

Maybe I will take him to court.  I might not get my money, but maybe I can write the $50.00 off on my taxes as a bad debt.

Granted, that is an extremely simplified example, but why in the world do John and Bill feel that I should have to accept less than the $10.00 I was promised.  I would think that if asked, it would be up to me as to whether or not I accepted and under what terms I accepted without being accused of being unreasonable or uncooperative and bad mouthed for a determination not to agree.

Maybe I'm wrong, but if the lender did not in some way take advantage of the borrower, the terms were clearly disclosed and the borrower agreed to the terms, why should there be the expectation that the lender must and will take less than he is owed?

I find this attitude somewhat disturbing, but maybe that's because I'm from the old school that believes if you make a promise, you should keep it.  That's integrity.  If in a bind, it is certainly acceptable to discuss the problem with the other party and if the other party modifies the agreement to respond in gratitude, but there should be no expectation of a modification, after all, a promise is a promise.  

IR-2009-69, July 29, 2009

WASHINGTON - The Internal Revenue Service today announced its first successful prosecution related to fraud involving the first-time homebuyer credit and warned taxpayers to beware of this type of scheme.

On Thursday July 23, 2009, a Jacksonville, Fla.-tax preparer, James Otto Price III, pled guilty to falsely claiming the first-time homebuyer credit on a client's federal tax return. Price faces the possibility of up to three years in jail, a fine of as much as $250,000, or both.

To date, the IRS has executed seven search warrants and currently has 24 open criminal investigations in pursuit of potential instances of fraud involving the credit. The agency has a number of sophisticated computer screening tools to quickly identify returns that may contain fraudulent claims for the first-time homebuyer credit.

 "We will vigorously pursue anyone who falsely tries to claim this or any other tax credit or deduction," said Eileen Mayer, Chief, IRS Criminal Investigation. "The penalties for tax fraud are steep. Taxpayers should be wary of anyone who promises to get them a big refund."

Whether a taxpayer prepares his or her own return or uses the services of a paid preparer, it is the taxpayer who is ultimately responsible for the accuracy of the return. Fraudulent returns may result not only in the required payment of back taxes but also in penalties and interest.

First-Time Homebuyer Credit

The First-Time Homebuyer Credit, originally passed in 2008 and modified in 2009, provides up to $8,000 for first-time homebuyers. The purchaser, however, must qualify as a first-time homebuyer, which for purposes of this credit means someone who has not owned a primary residence in the past three years. If the taxpayer is married, this requirement also applies to the taxpayer's spouse. The home purchase must close before Dec. 1, 2009, to qualify, and the credit may not be claimed on the purchaser's tax return until after the taxpayer closes and has purchased the home.

 Different rules apply for homes bought in 2008.

Full details and instructions are available on the official IRS Web site: http://www.irs.gov

The United States Government wanted to settle accounts with the banking industry.  When the accounting began, Lenders owed billions and could not pay.  Uncle Sam ordered them to reduce executive compensation, quit throwing wild parties and paying extravagant bonuses or they would have to sell of their assets and perhaps file bankruptcy.

The banking industry fell on its knees and implored Uncle Sam, "Have patience with me, and I will pay everything."  And Uncle Sam had pity on the banks, forgave them, paid the debt himself.

But when the banking industry went out it found tax paying consumers  that owed hundreds of thousands, seized the consumer, began to choke him saying, "Pay what you owe."  The tax paying consumer fell down and pleaded with the banking industry saying, "Have patience with me and I will pay you."  The banking industry refused, foreclosing on his homes and raising credit card and consumer interest rates.

Maybe the day will come when someone becomes greatly distressed and will report to Uncle Sam all that has happened and on that day Uncle Sam will summon the banking industry and say, "You wicked lenders!  I forgave you because you pleaded with me.  And should you not have mercy on the tax paying consumer as I had mercy on you?"  And Uncle Sam will deliver them to their fate.

He that has ears to hear, let him hear. 

Mike Fair, Director
Illinois Academy of Real Estate

Real Estate Classes Since 1979

Silly question, isn't it?  Or is it?

It has been said that "a person doesn't plan to fail, they just fail to plan."  A statement well worth considering as we enter the new year and look to the future.

Many real estate licensees do not seem to grasp the concept that even though they may be associated with a brokerage firm and work "for" the firm, they are in business for themselves and that individual success requires treating their real estate business like a business.

A critical component of any successful business is having and working a business plan, and the real estate business is no different.

Here are some tips to help you plan your business for the coming year.  You have probably heard many of them before as have I, but a little reminder never hurts. :)

1.  Establish Goals.  Your goals need to be well defined, measurable and in writing.  Take your time as you think about your goals and consider all life areas: spiritual, physical, material, financial, social, work and family.  Consider balance in all areas.

2.  Develop A Plan.  Identify problems that stand in your way and explore opportunities to offset the problem.  A problem is not a problem, but a challenge to overcome.

3.  Act on the Plan.  A simple statement, yet probably the most important step.  If you can't, won't or have difficulty acting on your plan, it just might be time to re-evaluate the plan.

4.  Maintain The System.  Your system is simply your plan "in action".  Keep good record, follow up and provide outstanding customer service.

For further assistance, comprehensive guidance, tools and resources for business planning may be found at the web site of the Small Business Administration.

Mike Fair
Director

Illinois Academy of Real Estate

Welome to 2009

Illinois Escrow Law Changes  - Real Estate Specific
New law provides for the transfer of escrow funds prior to termination or consummation of a real Estate transaction.

New Illinois Law, 2009 A review of more than 100 new Illinois laws that take effect January 1, 2009.

HUD Issues New Mortgage Rules HUD issues new mortgage rules to help consumers shop for lower cost loans.  New good faith estimate will will help borrowers save nearly $700.00.

Illinois Academy Classroom Sessions
45 hour Basic Transactions
Salesperson 2009 CE
Broker Pre-license 
Broker Management CE class schedule. Class Schedules.

Illinois House Bill 5338 is nearly identical to Senate Bill 571 which was unanimously passed by the Senate in 2007, but was held up in the House.

The bill is an update to the Real Estate License Act of 2000 and among other issues:

increases the required education for salesperson licensing from 45 hours to 90 hours with 30 hours of continuing education prior to the first renewal and 12 hours each subsequent renewal,

establishes initial broker licensing requirements of 45 hours of pre-license course work which must be in the area of brokerage management, supervision and administration with 18 hours of continuing education, 6 of which must be in broker management, and

provides that broker applicants must be licensed as real estate sales persons for 2 out of the last three years prior to broker licensing.

If passed, the proposed changes become effective May 1, 2009.  Complete details available here.

There has been much debate over the Illinois state-wide ban on smoking.  Early concerns on part of the business community seem to be the question of the economic impact of the ban on such businesses as bars, resturants and other public gathering places.  The issue is greater than that and many of us who have not thought through the legislation will find ourselves scrambleing to make immediate changes as of January 1.

The smoking ban applies to virtually all businesses and public places and can affect the way we all do business.  At first glance, the broker/owner would need to post no smoking signs, insure that there was no smoking in the workplace, removie ashtrays within15 feet of the building entrance and insuring that no smoking takes place in this 15 foot area.  

Points to Ponder

• Would a business owner be responsible for an individual smoking in an automobile that was in a parking space within 15 feet of the business entry if the space were not designated a non-smoking parking space with appropriate signage?
• How does the business owner tactfully request that a potential customer not smoke with 15 feet of the business entry and would it be necessary to have someone monitor the area to insure that the ban was complied with?
• Who is responsible for cleaning up all of the ciggerette buts that are 15.01 feet from the business entry.
• Would a real estate licensee need to refrain from smoking in his automobile and ask clients to do so if he offered to use it while showing property?

I am sure that there are many other questions that will be asked and that the broker owner or owner of any business needs to consider company policy and additions to a policy manual to specifically address the ban.

Mike Fair, Director
Illinois Academy of Real Estate