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The Community Alliance of Chicagoland REALTORS® “All too often the big dreams of visionary leaders are rendered smaller – or worse, non-starters - by the resource limitations of a single organization. But pool the power of two or more complimentary organizations that share a goal, and those dreams can become realities.”

- The Power of Partnership, Plexus Consulting Group, LLC Background: Since the advent of NAR’s “Board of Choice” policies in the mid-1990’s, local REALTOR® associations have strived to provide valuable services (over and above MLS) to real estate practitioners within (and around) their jurisdiction while keeping costs competitive with neighboring REALTOR® associations. In addition, as the geographic boundaries between MLS markets blurred, pressure was placed on the local associations to seriously look at ways to consolidate services or entities, so that: 1) internal processes could be streamlined, with the goal of containing and/or reducing costs; 2) services would be enhanced and/or made more consistent and 3) collectively, they would become more effective and influential in the communities they served. Large brokerages which spanned across association jurisdictional boundaries began demanding associations merge or share services, which would provide greater economic economies of scale. As a result, in the late 1990’s and early 2000’s, there was a rash of consolidations and/or mergers around the country. This was also the case in the Chicagoland area, where seventeen local REALTOR® Associations merged into four large associations, which today are known as the: Chicago Association of REALTORS® (CAR), Main Street Organization of REALTORS® (MORe), North Shore-Barrington Association of REALTORS® (NSBAR) and the REALTOR® Association of Northwest Chicagoland (RANWC). These merged entities further collaborated with each other on regional Professional Standards matters, contracts and forms, occasional events and until 2008, lockbox systems. In addition, in the early 1990’s seventeen REALTOR® associations in Northern Illinois merged their various MLS entities to form MLSNI. In April 2008, MLSNI merged with a competing, broker-owned MLS entity, MAP and the result was a new entity called the Midwest Real Estate Data (MRED), LLC.

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Chicagoland Regional Efforts: In November 2007, the Presidents and CEOs of CAR, MORe, NSBAR and RANWC met to determine if there was any interest in working on collaborative opportunities. Indeed, there was interest expressed at this meeting. These individuals then met with their respective Boards of Directors, where the collaboration concept was positively received. The CEOs were encouraged to formally explore collaborative options and present a game plan to their respective Boards of Directors for consideration for a long-term effort. Based upon this response, a meeting of the CEOs took place in January 2008 to further explore opportunities and possible structures to accomplish regional efforts. A facilitator, Jon Wallace assisted with the day-long session. Several key regional initiatives were identified during this session:

1. Professional Standards training and administration 2. Media Relations 3. Statistical and trend analysis for the region 4. Joint education and events 5. Joint leadership retreat 6. Consolidation of internal systems, such as accounting and IT services 7. Creating consistencies within the member data base systems (one application

form, enhanced – but common databases). 8. The possibility of exploring joint facilities near contiguous borders.

The four associations began to implement several of these initiatives in 2008, with several highly successful outcomes:

1. A Fair Housing event (4th year of participation with all four associations and IAR) which was attended by 300 – 500 members annually;

2. A collaborative media venture between MORe, CAR and WBBM radio station, where the leadership of the two associations is featured in regular spots promoting housing in the region;

3. A leadership retreat, which provided both the opportunity for quality education and extensive networking exchanges between the four Boards of Directors in the region.

Which approach to take? It is clear that the timing and mindset is right for greater collaboration among the associations and the initial steps in that direction have proved successful. There are several approaches which the associations should consider:

1. Continue selective cooperative activities such as those conducted in 2008, which require some shared staff, monetary and/or volunteer resources. There would be no formal, cooperative agreement in place and activities would vary from year-to-year, depending on the goals and resources of the four organizations;

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2. Create some type of formal “umbrella” organization which is focused on regional

issues only, and is managed and supported by the associations. There would be the need for them to commit resources annually to the umbrella organization;

3. Merge into one mega-association and consolidate all services and efforts (Note:

Such a merged entity would be the largest, local REALTOR® Association within the REALTOR® organization).

The Pros and Cons of each approach Regardless of the approach taken, any collaborative venture will only be successful long-term if it is based upon an acknowledgement that the “greater good of all REALTORS® working in the Chicagoland area” is the primary driver of the decision to work collectively, rather than the good of any one association . Further, it is only through mutual benefit, respect and teamwork that any meaningful efforts will occur. Each of the approaches should be measured on its long-term value to the region on three key objectives:

1. It enhances services and/or makes them more consistent throughout the region, so that it is easier for members to conduct business across jurisdictional borders;

2. It provides for the external efforts of the associations, and it’s members, to become more effective and influential in the communities they serve;

3. It streamlines internal processes and creates efficiencies which may result in

future contained and/or reduced costs. Selective Activities While the associations can continue to identify and cooperate on various activities, such as those conducted in 2008, this tends to be an approach which does not entail the resource commitment that other approaches take. Activities can easily be ramped up or down in any given year. As a result, the impacts tend to be short-term and may not meet all key target objectives. Of the three approaches, this one is the least favorable for the associations to adopt, as it does not fundamentally, nor consistently meet the three key objectives. Umbrella Organization This approach requires a more formal investment in resources and staff than the first approach. It is longer-term in nature and can effectively address the three key objectives. There are several ways the umbrella organization can be organized. The association could create an association management company (AMC), which they would jointly own. The AMC would provide staffing and basic services to the associations, such as member database administration, accounting, marketing, communications, and professional standards administration. The focus here would be primarily on internal processes.

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Alternatively, the organizations could form an umbrella organization that is more of a “business cooperative” where the associations unite voluntarily to meet their common business needs and aspirations through a jointly-owned and democratically-controlled enterprise. The focus would be on aligning on “regional” issues (such as media relations, statistical research, advocacy and license law positions), rather than strictly on internal efficiencies, although this could also be a charge of the cooperative organization (i.e. professional standards administration). This is an appealing option to consider as it allows the individual associations to maintain individual autonomy, while forging a strong alliance on those common matters of concerns to the greater Chicagoland region. The downside is that some form of a legal entity would need to be created; a regional “brand” established, and a long-term resource commitment would need to be made by each affiliating association. Merger Each of the four associations represents the culmination of one or more mergers in the past. As such, leadership and the CEOs are well aware of the potential roadblocks that occur when association begin discussing mergers – staffing, identify, governance issues, merging of assets and liabilities, to name a few. This approach would possibly bring about the greatest long-term positive impact for the region and would change the dynamics favorably at the state and national level of the REALTOR® organization, however it is likely the most difficult option to achieve. It is not certain that all of organizations are ready yet to move forward down this path, although it will remain as a future option to consider for one or more of the associations. The Vision: The Community Alliance of Chicagoland REALTORS® (C.A.C.R.) “An alliance is an agreement between two or more parties, made in order to advance common goals and to secure common interests” - Wikipedia It is recommended to take the second approach and form an umbrella “cooperative” organization (rather than an AMC) - the Chicagoland REALTORS® Community Alliance. The C.R.C.A is intended to be a formal, collaborative venture of the REALTOR® associations which primarily serve the greater Chicagoland real estate market, including: CAR, MORe, NSBAR and RANWC. C.A.C.R. is an alliance which:

Addresses those issues and activities which impact the greater Chicagoland region, and which cannot be resolved by the individual, participating associations on their own;

Has collective clout in the Chicagoland community (as the voice for 38,000+ members) on real estate policy issues;

Is not a brick and mortar institution, rather it is organized only to the extent that allows C.A.C.R. to function efficiently and effectively;

Does not compete with, replace, or supplant the associations which participate in it, however, it may afford them the opportunity to consolidate internal systems

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(i.e. accounting, database and/or professional standards administration) so that members are served seamlessly with enhanced services and/or reduced costs.

Will have its’ own regional brand, which is affiliated with the participating associations;

Will have a website separate from the associations;

Connects members to each other through social networking/media;

Connects members to content rich websites related to their businesses;

Stimulates conversations among practitioners about the challenges, opportunities and trends facing the real estate industry in the Chicagoland region;

Provides not just regional statistics and data, but analysis of such, which can be utilized by the members to market more effectively to their clients and customers;

Takes a multi-tiered approach to the delivery of skill-building and relevant education;

Will create an environmental scanning system that allows the alliance to be proactive on industry and community issues which impact the region and the needs of membership;

Will develop a rapid response system to critical, regional issues;

Is fluid, nimble, efficient, effective and utilizes wisely the resources invested in it by the alliance associations;

Is a champion of change for all things real estate-related in the region. The regional alliance is not about formal structures or governance systems. Rather, it is about information sharing and the creation of an environment for a “community of trusted real estate advisors” which can truly service the needs of the greater real estate community within the Chicagoland area. Three strategic goals have been identified which can move the REALTOR® associations towards this regional alliance effort:

1. Create regional efficiencies and increased productivity within internal systems:

Accounting/Finance services

Member Database services

Member data collection and survey

Human Resource administration

Internal Communications

I.T. infra-structures

Combined facilities

Capital equipment and office supply purchases

2. Identify products and services desired by REALTORS® in the region which are better met through shared resources:

Professional Standards training and administration

Forms

Education

Member Benefits

Retail 3. Increase the positive influence of the REALTOR® organization within the Chicagoland region:

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Media relations

Statistics and industry trends (as they apply to the region)

Website – for members, regional issue specific

Fair Housing

Advocacy

Leadership training

Economic development

Community alliances Next Steps:

1. Present to individual Association Boards of Directors for concept approval.

2. Request BOD approval of “seed money” for initial start-up ($10 – 15,000 each) and obtain BOD approval of the time commitment for each CEO to develop plans for the next fiscal cycle and beyond.

3. CEOS meet to develop business plans and budget, including:

a. Annual goals and priorities b. Responsible person(s) within each organization c. Staff and volunteer resources d. Timelines and performance measures e. Budget and ongoing funding (per member assessment?)

4. Upon approval of the four associations of the draft concept, the CEOs will meet

with IAR CEO to update him on the status of regional collaborative efforts and to discuss appropriate role of IAR in the activities of C.A.C.R.

5. Priority activities for 2009:

A. Begin creation of an online regional real estate community: Goal: To create a C.A.C.R. brand and website (www.myCACR.net) and integrate with the associations’ individual websites. Why a priority for 2009: Because this is a key foundational concept and is a structural necessity to make the venture successful. Action Items:

1. Creation of a logo.

2. Analyze existing association sites to identify possible vendors for the C.A.C.R. site – www.myCACR.net.

3. Create standards for posting information on the site.

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4. Associations submit content for upload to site. Content must have regional impact. Content must be reviewed and approved by assigned individual association staff.

5. Upon completion, utilize social media to begin building community buy-in. B. Statistical Analysis and Trend Reporting: Goal: To enhance REALTOR® professionalism by providing statistical data designed to assist members with understanding market dynamics and trends and communicating such information to the clients and customers they serve. Why a priority for 2009: Statistics and trends are vital to the planning needs of brokers and agents’ ability to better market to clients and customers. While the associations have the ability to pull data, we do not possess the staff expertise to view other data sources, analyze trends and provide guidance to our membership. The turbulence of this market makes this a critical first step for C.A.C.R. in 2009. Action Items:

1. Identify statistical data needs of members. 2. Identify and hire key organizations and/or consultants which can assist

with statistical analysis desired by the regional membership (such as, DePaul University, Regional Economics Laboratory Applications Laboratory (REAL) of the University of Illinois at Urbana-Champaign, John Tuccillo, and/or Stefan Swanepoel)

Note: Data MUST be organized by zip code and/or census tracts. 3. Post information on C.A.C.R. website and blast to memberships.

4. Create statistical analysis pieces and a summary of “talking points” which

members can use in communications with clients and customers.

5. Member training on agent/broker metrics and use of statistics generated.

6. Host a regional economic forecast event annually.

7. Other stats we might collect:

Tracking firm info: showings, where calls are coming from, seller/buyer demographics, etc.

Member stats: demographics, education levels, languages spoken, license status, years in business, prior background, income levels, markets served, community and civic involvement.

C. Professional Standards Administration & Volunteer Training: Goal: To streamline and provide consistent application of processes related to professional standards administration and to enhance the perceived

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effectiveness of the professional standards process by both the members and the public. Why a priority for 2009: Because leaders, brokers and members of the various associations have told the CEOs that the process is broken – there is an urgent need for consistency of P.S. administration, training for panels and grievance committees and application of interpretations of hearing decisions.

Action Items;

1. Identify a core group of REALTORS® at each association, annually, who can/will serve on hearing panels (10 – 15 per Association).

2. Provide regular and consistent training to these individuals, as well as individual Association Grievance Committee members.

3. Compensate hearing panels with a flat fee per hearing.

4. Create a venue (database) for sharing “blind” summaries of cases and recommended sanctions for panelists to review, which will assist them with interpretation of hearing decisions.

5. Hire services of a regional professional standards administrator to ensure consistent administration of cases. He/she will provide oversight and training of individual association P.S. support staff, which will, in turn, provide intake services and Grievance Committee administration.

6. Utilize the SOS software, which allows online input of ethics and arbitration cases by members and the public.

7. Create a regional application form for panelists, which will be reviewed by the Professional Standards Administrator. He/she will recommend applicants to the associations for consideration and approval.

8. Create an annual report to the members with summary information on cases: numbers heard, articles violated; sanctions recommended, trends noted on types of cases.

D. Events Goal: To hold three joint events in 2009: Economic Forecast (January); Fair Housing Training (April) and a Leadership Retreat (July or August). Why a priority for 2009: In 2008, the four associations held two successful joint events. Added to that continued mix will be an Economic Forecast event, featuring Lawrence Yun, NAR Chief Economist as the keynote speaker.

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Action Items: 1. Key staff from the four associations will meet throughout the year to set

goals, coordinate the logistics, program and budget of the three events. 2. Events promoted appropriately through each individual organization, as

well as C.A.C.R. 3. Video (as appropriate) portions of the events and place on the C.A.C.R.

website

In summary: The timing is right, players are right. Relations among the local REALTOR® associations are stronger than ever and the ground is fertile for the growth of a concept such as the one presented. Finally, C.A.C.R. makes sense because it will allow the associations to provide services which cannot be done individually, thereby allowing us to give our members a competitive edge in today’s Chicagoland market. FOOTNOTE – Outcomes in 2009 Upon approval of the four association leadership teams in the Fall of 2008, the CEOs developed a business plan for 2009 and collaborative efforts began in earnest. 2009 proved to be a highly successful year, despite economic conditions which hampered full utilization of planned resources. Key activities in 2009 included:

1. Greater dialogue among the association CEOs, staff specialists and volunteer leaders. A sense of camaraderie has developed at all three levels. Relations with the state association have also strengthened as a result of joint collaborative efforts.

2. A regional Economic Forecast event was held in January 2009, which featured

Dr. Lawrence Yun and was webcast to all four associations. 3. The 2nd regional Leadership Retreat was held in July 2009, which featured Stefan

Swanepoel and John Tuccillo. 4. A permanent logo has been created. A website – www.mycacr.net, was

developed although it is only in the initial stages. Focus in 2010 will be on content development and integration with the four associations’ individual websites. Social media applications to be developed. In addition, a CACR Media Kit is in the development stage for use in 2010.

5. In the Spring, the associations focused on the collection and dissemination of

regional market statistics. John Tuccillo was hired to create analytical reports. CACR has purchased a regional overrun on NAR’s Chicagoland PMSA survey.

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6. MORe and NSBAR began shared professional standards administration services. CAR now utilizes a professional standards online tool which was developed by MORe. A regional roster of P.S. members was developed for use in inter-board hearings and regional training is planned.

7. Information sessions for local elected officials on the impacts of foreclosure on their communities were organized and coordinated among the four Government Affairs Directors.

8. The associations began internal promotions of each others’ education programs and special events. Several joint events are being considered for 2010, including a regional social media training event, an international real estate event and a commercial real estate event.

9. Mutual support on regional MLS matters, multi-board contracts and forms, and lockbox systems.

10. Collaborative media opportunities have taken place throughout 2009. In addition, CACR achieved recognition within the Chicagoland area as a new regional real estate entity, in the Chicago Agent Magazine (see attached).

Development of the 2010 Business Plan is to take place in the Fall of 2009.