S.E.C. Real Estate Observer

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In the 1950s, Realtor Richard R. Reno of San Diego, California, observed that many of the real estate problems existing in San Diego’s overbuilt market could be solved by people exchanging real estate. He saw exchanging as an alternative to the unavailable cash buyer.

He believed that people who owned real estate did not necessarily want to divest themselves totally of real estate ownership but were uncomfortable in the circumstances surrounding their current ownership. In effect, the problem was not with the property but with the people who owned it. He went on to hypothesize that there was no bad real estate, only inappropriate or untimely ownership. With the appropriate owner in title to the real estate, there was no problem.

Reno’s hypothesis led to the idea that the most effective way to deal with real estate was to abandon the traditional approach of focusing entirely on the property, the “bricks and mortar,” and incorporate into the process the circumstances surrounding the ownership of the property. He recognized that the reasons an owner wanted to sell, and what the owner would do with the cash if it was obtainable, were key to successful transactions.

Two basic axioms evolved:

1. Working with people is more important than working with property. Properties do not have problems; people do.
2. Client management, the ability to deliver, stems from the relationship between the client and the broker. The underlying premise is that the client’s best interests are paramount.

Mr. Reno also observed that there was a need for education in counseling and in exchanging. He advocated a professional approach that must incorporate the understanding that cash itself is not the answer to all real estate conveyances, and he argued that unless tax matters are considered prior to a real estate transaction, a client’s best interest may not served.

It also occurred to Mr. Reno that a national group, meeting regularly, could effectively address issues and solve a client’s uncomfortable real estate situation. Brokers representing diversified owners and various markets could provide a forum that would generate solutions to troubled owners.

In November 1961, nineteen Realtors met with the common goal of forming a national organization composed of individuals who were committed to practicing creative real estate and counseling. This was the first meeting of the Society of Exchange Counselors and has since become a prototype for most marketing groups internationally.

Today the Society of Exchange Counselors maintains a membership representing most of the North American continent. Membership is by invitation only. Its members are selected from those brokers driven by a focus on people and who possess proven skills in exchanging and creative real estate.