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 the NAR 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 people had to be invited in order to become members 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, deferring 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. Around 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.

Then, around 1962/63, 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 still teaching these concepts that made S.E.C. such a different and unique organization.

Bill Broadbent, S.E.C., CCIM (San Luis Obispo, California), was an active real estate broker in San Luis Obispo, California.  He started his career in 1959. Bill was president of Arnett & Broadbent, Inc. and specialized in investments, exchanging, and consulting—all under Single Agency. A pioneer of Buyer representation since the early 1970s, he is acknowledged as “the Architect of Single Agency.” In 1998, the National Association of Exclusive Buyer Agents honored Bill with an Outstanding Service Award for his service as a “Founding Father of The Exclusive Buyer Brokerage Movement.” He has also been recognized for his major contributions to real estate exchanging, the Consulting alternative, and the discount note business.