Will License Law Changes Impact Illinois Real Estate Brokers?

springfield-1648402_1920There are major changes on the horizon that will impact Illinois real estate licensees and education required for license renewals.

License Law Amendment

On Friday, August 18, 2017, Gov. Bruce Rauner signed HB3528 into law. This updates the Real Estate License Act with changes intended to streamline and modernize various aspects of the law. Some highlighted changes include a restructuring of the Education Advisory Council (EAC), new requirements for school and instructor licensing and requirements for education program content and methods of delivery.

Upcoming Broker License Renewal

With a Real Estate Broker license renewal quickly approaching, we should first take a closer look at how the license law amendments impact (or may not impact) this large group of licensees.

In summary, continuing education requirements will be updated as follows:

  1. The mandatory 3-hour “Core A” curriculum will be replaced by a 4-hour “Core” course. Brokers and Managing Brokers will be required to attend this course via classroom, live webinar or online distance education (a new option for which details are not yet available). The good news – a final exam will not be required!
  2. The remaining 8 hours will continue to be elective credits. A variety of delivery options will be available. Delivery methods with mandatory final exams will require a passing score of 75%. (Currently, a passing score of only 70% is required.)

How Soon?

The Illinois Department of Financial and Professional Regulation (IDFPR) still has many details to sort out before any changes to license law can be implemented. For example, the new “Core” curriculum needs to be clearly outlined before schools can create, seek approval and offer the new course. It will take the Real Estate Division many months to complete the rulemaking process, which won’t officially begin until January 1, 2018.

This means that most likely the full impact of these changes will not impact Brokers during their current renewal period.

What Should You Do?

We strongly recommend that Brokers stay on track and complete currently approved programs in a timely manner.

Real Estate Institute will continue to provide updates as the IDFPR develops implementation plans for the changes. Be sure to JOIN OUR MAILING LIST if you have not done so already.


Real Estate’s Leadership Crisis

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With over 94% of real estate brokerages running in the red, one of the biggest challenges we see in the industry is a crisis of finding and developing tomorrow’s company leaders.

The problem stems from the fact that most real estate brokerage managers/owners, despite being good salespeople who have risen to a certain level of success in their own real estate production, aren’t necessarily good business owners. Typically, these producers get fed up with current company leadership and start believing they can do it better. They then launch out on their own with their new company, only to fail more than 75% of the time.

So how do we help prevent this craziness? The answer is simple: Training.

Companies need to develop and/or outsource leadership development programs that can help train their own agents to be leaders. Unfortunately, most companies refuse to do this, out of fear that they’re simply training a future competitor. As a result, the task falls on trade organizations and real estate schools. The National Association of Realtors®, through its various member-only subsidiaries, used to have one of the best programs available to learn how to start, grow and maintain a successful brokerage. Unfortunately, over time this program became watered-down and has virtually disappeared.

So, the gap in professional education falls to the real estate schools or seminar trainers/consultants. One such school in Illinois, Real Estate Institute, has launched a two-day program called “Building & Growing Your Real Estate Brokerage” in conjunction with my seminar company and based upon my book, “The Real Estate Entrepreneur.” This intensive crash course covers the essential information that future brokerage leaders should have before launching into company ownership, or at the very least, within the first two years of ownership.

The program covers such essential topics as:

  • The Importance of Your Company Vision
  • Your Niche
  • To Franchise or Not to Franchise
  • Policies and Procedures Issues
  • Commission Structures From the Inside Out
  • Targeting and Recruiting Agents
  • And More! 

This course will save a future broker-owner THOUSANDS of dollars in wasted time and energy. Kudos to the Real Estate Institute for stepping up and filling the leadership educational gap in our industry.



Cliff Perotti is a 32-year veteran in the real estate business and has consulted with some of the largest brokerages in the world.  He holds 11 national designations and is the author of “The Real Estate Entrepreneur… A guide to Launching & Growing a Real Estate Brokerage” (McGraw-Hill).


2017 Illinois Managing Broker License Renewal in Two Simple Steps

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The Illinois Department of Financial and Professional Regulation (IDFPR) is now accepting Managing Broker license renewal applications. Follow these instructions for a timely renewal:

Step 1 – Complete 24 Credit Hours of Continuing Education

Illinois real estate Managing Brokers need a total of 24 hours of continuing education (CE) which includes:
12 hours of core and elective CE 
(via self-study, online or classes) plus 12 hours of interactive Broker Management CE (via classes or live webinars).

The current Managing Broker renewal period began May 1, 2015, and ends April 30, 2017. If you complete continuing education courses with Real Estate Institute, our school reports your course completions to the IDFPR.

Exceptions

  • New Licensees: Managing Brokers who are in their first renewal period might not need 24 hours of CE in 2017. Licensees who completed the Managing Broker pre-license courses during the renewal period are exempt from the Broker Management CE requirement. These licensees are required to complete only 12 hours of core and elective continuing education.
  • Attorneys: Currently licensed Illinois attorneys are exempt from the education requirements! Don’t forget to submit your license renewal application. See below.


Step 2 – Submit Your New License Application

After you have completed your CE requirement, you must renew your license with the IDFPR. There are two ways to renew your license:

  1. Apply Online – The IDFPR permits online license renewal applications to be submitted up to 90 days before the license expires. This option allows you to complete the entire renewal application and pay online.  Click here to apply online.

  2. Mail Your Application – The IDFPR no longer mails licensees a pre-printed renewal application. However, you can print the form online. Select Print Renewal and enter the requested information. This application can be completed and returned with payment. If you use the paper application, we strongly recommend that you send it to the IDFPR via USPS Certified Mail so that you receive confirmation of delivery to the IDFPR. Delivery confirmation will be critical in the event of a delay in license renewal. It will take the IDFPR several weeks to process your application.

If you have questions about your education requirements for renewal, please call 800-995-1700 to speak to one of Real Estate Institute’s compliance experts. More information can also be found at InstituteOnline.com/Renew.

Should You Become A Home Inspector? Read This First

magnifying-glass-red-houseAfter 25 years of “crawl spacing” (a friendly term that my friends and I call what we do), I sometimes ask myself why I love the home inspection profession so much.  If you think about the yucky stuff, like crawling around in hot attics and various spider-filled tight squeezes, you might wonder what’s wrong with me.

I asked my friend and colleague Corey why he thought we did it.  He said it’s because we have “FSO disease.”  We love to Figure Stuff Out, including why “stuff” doesn’t work. I can’t tell you how many times I walk by something and it just doesn’t seem right.  I will stare, test, prod and poke it until I figure out what’s wrong with the component I’m looking at.

Another reason I enjoy my work is that we get to use cool tools.  I purchased a thermal imager to help with my inspection business.  Today, I was shooting the ceilings of a condo and found a blue spot on the ceiling in a bedroom.  It didn’t even dawn on me that a register was missing in the room.  It turns out that the ductwork was placed to the point of discharge, but the register was never installed. Someone lived there for four years without heat or AC in the room.

But the biggest and most important reason I do this work is the feeling I get when I’m doing my closing interview with my clients and showing them all the issues that are present in the home they’re about to purchase.  When I finish, they look me in the eye, shake my hand and say “thank you” with the most sincerity. I can’t tell you how much I enjoy that feeling.  I help families with the largest purchase in their lives, and that’s pretty cool.

If you, or someone you know, would like to become an official member of the “FSO” community, please attend our upcoming Home Inspector Informational Seminar.  This no-cost seminar will cover the requirements for obtaining a home inspector license, what it’s like to enter this rewarding career field, and the tools that are used in this exciting profession.

My name is Charles Bellefontaine, and I love crawl spacing!

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Charles Bellefontaine is a veteran home inspector and licensed Illinois home inspector instructor. You can find out more about him at www.thehomeinspectors.com.

Broker Late Renewals: Your Questions Answered

IMPORTANT UPDATE: The deadline for Illinois Real Estate Brokers to renew their licenses on time is only days away, on April 30. Although the vast majority of licensees will renew on-time, many will not. So what happens if you miss the deadline?

There are a few things to think about, including license renewal fees, required education and other compliance considerations.

State License Renewal Fees:

Licensees who miss the renewal deadline will have to pay a $50 late-renewal fee to IDFPR (in addition to the standard $150 renewal fee). Although you might expect the late fee to escalate over time, it does not. The same fee will be due as long as you complete the renewal anytime during the next license renewal period.  However, you only have 30 days to renew online with a credit card payment.  After that, you will be required to print and mail the renewal form with a check or money order.

If you remain in a non-renewed status beyond a full renewal period, you will be responsible for paying any additional missed renewal fees if/when you eventually renew your license. In other words, the IDFPR will require you to “catch up” on all missed fees from the period of time when your license was in a non-renewed status.

This graphic illustrates how the fees escalate over time:

Broker Late Renewal Fee Chart v2

Continuing Education or Post-License Education:

Brokers who renew on time must complete either 12 credit hours of CE or 30 hours of post-license education before renewing their license. (If you’re not sure which one you need, read our prior article.)  The education requirements remain the same for those who complete a late renewal. So, if you miss the renewal and plan to renew sometime in May, be sure to complete your education requirement before applying for your new license. Failure to do so will result in additional fines/penalties.  

Assuming that you complete your education requirement in May 2016 and then apply for your (late) license renewal, take note that the education you completed is retroactively applied to the prior renewal period and may not also be applied to your next license renewal (due by April 30, 2018.)

Individuals who wait more than two years to renew will fall into the “reinstatement” category. At that point, you may be subject to different and/or additional education requirements, as mandated by the IDFPR.

Compliance Considerations:

Late license renewal is no big deal if you are not currently engaged in business that requires you to hold a real estate license. If you just cringed, here’s what you should know:

  • If your license expires and you have active transactions, you may not continue to participate in those transactions. Acting without a license can result in a fine of up to $25,000!  You should immediately notify your sponsoring broker that your license has expired, so that they may take appropriate steps to address the situation.
  • If you are also a REALTOR®, the change in your license status(es) will likely impact your membership(s), including access to the MLS. Contact your local REALTOR® association for more details.

After the April 30 deadline, finding the right education program can be tricky. Real Estate Institute will continue offering our popular 12-hour core/elective CE program and the 30-hour Broker post-license education program that’s required for new licensees.

Call 800-995-1700 if you have any questions about the education required for late renewal.

Quickest Route for Brokers to Beat the April 30th Deadline


Quickest_Route-road-with-motion-cloudsIt’s the second half of April. For Real Estate Brokers in the state of Illinois who have yet to renew their licenses, it can cause panic. But, it doesn’t have to. Follow the two-step process below for a quick and easy way to maintain your license.

Step 1 – Complete Your Education.
Brokers in Illinois are required to completed education before renewing their license. The type of education is dependent upon what date your license was issued. Find out the original issue date of your license by clicking here.

  • Brokers whose licenses were issued before 2/1/14 require 12 hours of core and elective continuing education. While classes are permitted, self-study, is the fastest option. Both class and self-study options require a proctored exam. Real Estate Institute offers convenient continuing education options.
  • Brokers whose licenses were issued between 2/1/14 – 1/31/16 require post-license education. Half of this 30 credit-hour requirement must include live instruction, such as a class or webinar. With limited time remaining, many Brokers choose webinars, which offer more flexible attendance options – review your post-license education options.
  • Brokers whose licenses were issued after 1/31/16 won’t have to renew until 2018, so no education is required at this time. These Brokers should complete their post-license education requirement by 4/30/18.

Step 2 – Renew Your License.
Most Brokers know that they must pay the renewal fee to the IDFPR, but are unsure of the exact process. Read the following for specific details about the renewal process.

  • After completing your required education, you may renew the license. A sponsor and a fee of $150 are also required to renew.
  • The IDFPR strongly encourages Brokers to renew online. You may have received a P.I.N. via e-mail from the IDFPR. However, it’s not needed to renew. The license number, plus one of the following is needed to renew: the social security number, date of birth or P.I.N. A paper-based renewal form is also available with this information.
  • Begin the renewal process by clicking here.

Real Estate Institute has been a leader in real estate education for over 20 years. Our team of experts is standing by to answer your questions about your requirements, our courses and the renewal process. Please don’t hesitate to contact us at 800-995-1700.

Here Come the Changes! Fannie Mae Sets Release Weekend for Desktop Underwriter™ 10.0

Here Come the Changes! Fannie to release DU 10.0

Well, we finally know a *LITTLE* more about Fannie’s plan to release the brand-spanking-new version of Desktop Underwriter™ (DU™).

If you took Real Estate Institute’s live Mortgage continuing education class last year, you heard me talk about Fannie’s plans to revamp and update their underwriting engine to take into account “new and improved” (*your mileage may vary) credit report data that the mortgage industry has not previously utilized. The data to which I’m referring is called trended credit data, and it incorporates much more information about consumers than most of you have ever seen before.

Right now, our mortgage credit reports are basically “snapshot” reports – that is, they show the consumer’s payment history, current balance, credit limit, dates opened, etc. That data is updated typically once per month from each reporting account, and what we know about our customer is what is reported on that day from that creditor. Thus, if Joey Bagadonutz is someone who pays off his credit cards in full each month, but his outstanding balance on the day the account reports to the bureaus is $3,500, we see that balance as $3,500 with no indicator of how long it has been that high. Now, imagine that the limit on Joey’s account is $4,000. Our current underwriting algorithms see him as a SIGNIFICANT CREDIT RISK because of his credit utilization. Not good for Joey.

With trended data, not only will we be able to view the outstanding balance and limit, we’ll be able to see how much Joey has paid on his accounts each month for the past two years! For a guy like Joey who pays his account in full, this is fantastic; we’ll be able to really dig into his excellent credit history beyond today’s “well, he’s never been late.” Thus, Joey gets a better risk evaluation, which leads to a better rate, which leads to happy Joey, pink unicorns, rainbows and Santa Claus! Can’t get any better than this, right?

Well, if you’re Joey, yes.

However, if you’re someone who carries a balance each month, not so much. Let’s say you’re working with Bubba Buysalot on a purchase of a new home. Bubba is a guy who has 6 open credit cards, is under 50% utilization on all of them, and has never missed a payment. In today’s credit world, our algorithms see him as a TOP-TIER RISK LEVEL because of his utilization and payment history. Good for Bubba. Now, with the new trended data, we dig deeper and see that Bubba has made just the minimum payment on all six accounts and his balance over time has been increasing. Now, Bubba is no longer a top-tier borrower. He gets a worse risk evaluation (due to the fact that those who make minimum payments default on debt at a rate 3 to 5 times higher), which leads to a higher rate or a declined loan, which leads to sad Bubba, rain clouds, bee stings and Lucy pulling away the football when he tries to kick it.

You can see both sides of this coin, right? Deeper information and improved risk assessment is good for creditors, Fannie Mae and MBS investors, but it’s not good for every applicant.

OK. So WHEN is this new version of DU coming out? Good question. According to Fannie’s preview document released at the end of January, we can expect the rollout to occur on the weekend of June 25, 2016. We also can expect a series of training webinars and informational communications in the months leading up to the roll-out date. As of right now, all we really know is that this new release will evaluate trended credit data, as well as simplify the process for applicants with multiple financed properties. We’ll learn a lot more when Fannie issues the release notes sometime later this month. It will be interesting to see if they also incorporate some of the other changes they’ve been working on, such as creating a way for DU to evaluate borrowers with non-traditional credit histories, or if those will be relegated to a future release.

Now that you have this knowledge, it’s time to get out there and start educating your prospective borrowers about it, especially those who are sitting on the fence about purchasing a home. While you’re at it, start informing your referral sources, too! I’m sure there are gaggles of real estate agents and financial planners out there who’d like to know about these changes well in advance.

More to come when the Release Notes are, well, released. Until then…

Happy Originating!

Peter



Real Estate Institute is an NMLS-Approved Course Provider, #1400102. Each year, thousands across the country choose Real Estate Institute for its mortgage pre-license, SAFE test prep and continuing education programs. If you have questions about your education requirements, our compliance experts are available at 800-995-1700 from 8 a.m. – 6 p.m. (Central Time), Monday through Friday.

Top 6 Things Real Estate Brokers Get Wrong About License Renewal

There’s no doubt that it’s tough to keep up with all of the ins and outs of renewing an Illinois Broker license. But the renewal deadline is approaching, so it’s time to get your facts straight.

Here’s a short list of common myths about license renewal.

Myth #1: Broker post-license education is a type of continuing education.

It’s no wonder Brokers are confused. Many education providers incorrectly refer to post-license education as a continuing education program. Post-license education is actually a follow-up to your pre-license training, and it takes the place of continuing education for newly licensed Brokers. You must complete this one-time requirement by April 30, 2016 if you became licensed between February 1, 2014 and January 31, 2016.

In case you are thinking about waiting until the last minute to complete your post-license education, think again. Post-license is a two-part program that includes some interactive sessions, so it is strongly recommended that you start your required education NOW.

Post-license education must be provided by a pre-license school that is approved by the Illinois Department of Financial and Professional Regulation (IDFPR). Schools that have only been approved as continuing education providers cannot offer this course. Importantly, post-license credit will not be accepted by the IDFPR as continuing education credit and vice versa.

Myth #2: You must complete an ethics course in order to renew your license.

The National Association of REALTORS® requires its members to complete ethics training every four years. REALTORS® must complete this requirement by 2016. However, you do not need to complete an ethics course in order to renew your Illinois Broker license. Illinois requires brokers to complete 12 credit hours of core and elective continuing education. Required topics for core courses can be found here. (For your convenience, Real Estate Institute includes a 3-credit-hour ethics course in our popular 12-credit-hour CE package.)

Myth #3: Out-of-state licensees have different license renewal requirements.

If you live out of state and want to renew your Illinois Broker license, you must complete the same requirements as a Broker who lives and works in Illinois. Brokers licensed prior to February 1, 2014 must complete the 12-credit-hour continuing education requirement. Brokers licensed on or after February 1, 2014 must complete a 30-credit-hour post-license education program. Brokers must also submit the renewal application and fee to the IDFPR by April 30, 2016.

Myth #4: Attorneys are exempt from all Broker renewal requirements.

Active Illinois attorneys are exempt from the continuing education requirements, but they must submit the renewal application and fee to the IDFPR by April 30, 2016.

Myth #5: Getting an Illinois Broker license through reciprocity provides an education exemption during the first license renewal.

Brokers who acquired their Illinois Broker licenses through a reciprocal state agreement (and did not complete Illinois real estate pre-license education) aren’t off the hook. These licensees in their first renewal have the same requirement as Brokers who completed their pre-license education in Illinois. They must complete 30-credit-hours of post-license education before the April 30, 2016 renewal deadline.

Myth #6: Brokers don’t need to worry about renewing their license until they receive a postcard from the IDFPR.

In previous renewal years, the alarm bell sounded when you received the IDFPR’s renewal reminder postcard with your PIN number. You knew it was time to complete the education requirements (if you hadn’t already) and submit the renewal application and payment. With the IDFPR’s recent decision to only send email renewal notifications and discontinue mailing license renewal notifications, there’s a good chance that there will be a late rush of required education completions and renewal applications being submitted to the state. To avoid late fees, don’t let this happen to you. If you aren’t sure whether you have a current email address on file with the state, you can easily update/add it here.


Real Estate Institute is approved by the Illinois Department of Financial and Professional Regulation. Pre-License Provider #510.000158 and Continuing Education Provider #562.000161. Each year, thousands of licensees choose Real Estate Institute for its flexible continuing education and post-licensing education programs. If you have questions about your education requirements, our compliance experts are available at 800-995-1700 from 8 a.m.- 6 p.m., Monday through Friday.

What You Need to Know About Illinois Broker License Renewal In 2016

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The state’s budget woes will soon be felt by Illinois real estate licensees. Last week, the Illinois Department of Financial and Professional Regulation (IDFPR) advised that it will not mail license renewal notifications. This means that there will be no reminder postcard sent in early February before brokers’ deadline. Many brokers don’t give much thought to the license renewal or the education that must be completed until they receive this reminder. This could cause a late rush of continuing education completions and renewal applications being submitted to the state.

The good news is that the IDFPR will begin sending renewal reminders via e-mail. The bad news is that the IDFPR has never required real estate licensees to provide their e-mail addresses, so the department’s database is incomplete. This is a perfect time for you to update your contact information with the state. To easily update or add your e-mail address, click here.

The IDFPR will start accepting Broker license renewal applications in just a few weeks. It’s important that you follow these instructions for a timely renewal.

Step 1 – Complete Continuing Education or Post-License

Illinois real estate Brokers need 12 hours of core/elective continuing education (CE) every renewal period, EXCEPT Brokers who are in their first renewal period. Brokers in their first renewal period are required to complete a 30-hour Broker Post-License course. The current Broker renewal period began May 1, 2014 and ends April 30, 2016. If you complete CE or Post-License education with Real Estate Institute, our school reports your course completion directly to the IDFPR.

Step 2 – Submit Your New License Application

After you have completed your CE or Post-License requirement, you must renew your license with the IDFPR. There are two ways to renew your license:

  • Apply Online – The IDFPR permits online license renewal applications to be submitted up to 90 days before the license expires. This option allows you to complete the entire renewal application and pay online. Click here to apply online.
  • Mail Your Application – The IDFPR typically mails licensees a copy of the renewal application 60 days before the license expires. However, with the budget cuts, it’s likely that this mailing will be discontinued too. The application can be completed online, printed and mailed with payment. If you use the paper application, we strongly recommend that you send it to the IDFPR via USPS Certified Mail so that you receive confirmation of delivery to the IDFPR. Delivery confirmation will be critical in the event of a delay in license renewal. It will likely take the IDFPR several weeks to process your application.


If you have questions about your education requirements for renewal, please call Real Estate Institute at 800-995-1700 to speak to one of our compliance experts. More information can also be found at InstituteOnline.com/NextSteps.

Should Real Estate Agents Be Worried About Processing Delays at the IDFPR?

Changing Sponsoring Brokers – A Quick Summary
Illinois real estate licensees typically only submit forms to the IDFPR’s Division of Real Estate only once every two years, when it’s time to renew their licenses.  (For Brokers, that time is approaching once again.)  However, you also rely on the IDFPR to process an application if you become sponsored by a new Managing Broker sometime during your license renewal period.

The process to change sponsors is pretty straightforward, as summarized here:

  1. Notify your current sponsor that you no longer wish to be sponsored.  The current sponsor will terminate your license by signing the back of it before returning it to you. (Your license should have been on display at your office location. Your pocket card is not your license.)
  2. Complete the IDFPR’s 45-Day Permit Sponsor Card form.  Provide the form to your new sponsoring broker, so that he or she may complete the bottom section of the form.
  3. Make two copies – one for you and one for your new sponsoring broker.
  4. Within 24 hours, mail the original form, your old (terminated) license and the required $25 processing fee to the IDFPR.

Your copy of the form will serve as a 45-day permit while you’re waiting for the IDFPR to process the form and mail your new license.

Does it Really Take Less Than 45 Days?
Until recently, the Division of Real Estate had been processing license applications and other forms rather promptly.  This was no small feat, since just a few employees at the division process more than 15,000 termination and sponsor change requests every year!

Unfortunately, reductions in staff have led to delays in processing documents like these.  In fact, some applications are taking more than 45 days to process.  

So, What Happens When Your Permit Expires?
Most notably, you would not be able to provide a copy of your license to customers or your sponsoring broker.  Of course, this is just a temporary problem and no fault of your own.

Recently, the division advised that it is doing its best to manage the situation and understands that such a delay would impact licensees.  To mitigate the issue, the division indicated that it will allow these licensees to complete and submit a duplicate 45-Day Permit Sponsor Card – without the $25 payment.  You may reference a copy of this document as needed.  Meanwhile, the division will be working to clear out the backlog and issue your new license as quickly as practicable.

A Word To the Wise…
As you might imagine, the Division’s staff will be under much more pressure we proceed into the upcoming Broker’s license renewal season.  Brokers should look to complete their continuing education requirement early and apply for their new license as soon as permitted (early next year.)  That way, you’ll be out in front of the line!