S.E.C. Real Estate Observer

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In the late 1950s Richard R. Reno of San Diego California suggested to the National Association of Realtors (NAR) that some type of exchange group be set up under the umbrella of NAR. The existing International Traders Club didn’t have much structure or function. A committee was formed to study the idea and Richard Reno chaired the committee. About two years later Reno recommended to the committee that an exchange organization/division be established. Many committee members admitted they had no idea what Reno was talking about and because they didn’t understand it they would not support it. Heated discussions followed and ultimately a vote. Reno lost by one or two votes. The winning side vowed there would never be an organization within national with the word “exchange” attached.

Undiscouraged by his defeat Reno and many of his committee supporters established the Society of Exchange Counselors (S.E.C.) in 1961. This group was independent of organized real estate and you had to be invited in order to become a member of S.E.C. Reno had written a book on exchanging and taught a week long seminar on the subject. His fundamental premise was that real estate was a people and psychology business rather than a property business. People could improve their real estate ownership position in real estate by exchanging and when necessary defer the taxes using IRC 1031. The use of exchanging as a creative marketing tool offered more opportunity to the trained broker/exchangor than the more traditional Buy/Sell approach.

In California the California Real Estate Association had an exchange division. About 1961 they developed a couple of classes on exchanging with major emphasis on property analysis and the tax deferral aspect of exchanging. Those who completed this training could qualify for the Certified Property Exchangor (CPE) designation.

In the 1962/63 era the CPE program was offered to NAR. They liked it and adopted it with just one change, the designation. The new designation was CCIM, Certified Commercial Investment Member of the National Institute of Real Estate Brokers. Those who beat Reno made good on their promise that the word “exchange” would never be part of organized real estate.

Over the years both organizations expanded their educational programs, although the major CCIM focus is still property, numbers, computers and spreadsheets. The S.E.C. emphasis through the Richard Reno Educational Foundation has been people, counseling, relative benefits, creative marketing and sharing among members. The weakness is that there is almost no one left teaching these concepts that made S.E.C. such a different and unique organization.