5-23-16 — Vol.: 2016 Iss.: 20 • Randy Durham, 2016 President • Phil Newman, TAR Digest Editor
Editor’s note: The Digest is taking Memorial Day week off and will return Monday, June 6. We hope you and yours have a fantastic holiday and a great start to summer.
**Watch our special TAR Digest video recap of this week’s edition on YouTube or Vimeo**
TAR TAKEAWAYS ? Want to get paid? The hotline tells you how ? A TAR committee or trustee seat could be yours ? Meet TREC’s globetrotting grandma ? Try the updated editor in Instanet Forms
CONTENTS In the News
1. Apply for TAR Committee/Trustee Seats
2. Principal Brokers: Privilege Tax Due 6/1
3. TREC Stars: Marcia Franks Member Services
4. TransactionDesk: Updated Forms Editor Professional Development
5. RCS-D: Divorce, Elder Care 6/20-21
6. Open-House Tip: Use Sign-out App
Vote. Act. Invest.
7. Our Annual RPAC-A-THON Is Back! Legal & Ethics Hot Line
8. Can I Pay an Out-of-State Agent?
9. Commission Check to Sole Proprietor?
10. How to Secure the Commission from a Buyer? Key Links & Resources
**Register for Fall Convention!**
1. Apply for TAR Committee/Trustee Seats Applications for 2017 TAR committees, RPAC trustee and TREEF trustee seats are available on the TAR website. Log in and visitthis link. Applications are due Wednesday, August 31. Committee opportunities include Commercial Forms, Convention, Diversity, Governmental Affairs, Professional Standards, Residential Forms, and Strategic Planning.
2. Principal Brokers: Privilege Tax Due 6/1 A reminder for principal brokers only from the Tennessee Department of Revenue: June 1 is deadline for the annual $400 professional privilege tax, which applies to these professionalswho hold an active license or registration, regardless of whether you practice in Tennessee.
Our profiles of the Tennessee Real Estate Commission (TREC) continue with Marcia Franksof Franklin.
How fitting: When we caught up with Marcia Franks last week, she had just completed TAR’s two-day Learning-Centered Instructor (LCI) course at the Williamson County Association of REALTORS® (WCAR). The course is required by the Tennessee Real Estate Commission (TREC) for all aspiring instructors.
Consider the multilayered connections:
— Franks is aTREC commissioner, appointed by Tennessee Governor Bill Haslam to a five-year term beginning in 2014.
— She is a member of WCAR, her home association, having lived and worked in Franklin for 37 years (28 as an agent/broker); she served as WCAR president in 2006 and was named its REALTOR® of the Year in 2007.
— By training to become an instructor, Franks is exemplifying her passion to raise the standards of professional development for all real estate licensees.
“I love learning, I love to teach, and I am excited about getting into real estate education,” she says. In one sense, she’s already way into it by being on the nine-member Commission that oversees licensure. But in another sense, she’s just getting started.
Music City roots Franks’ journey really started in the heart of Nashville. Born at Vanderbilt University Medical Center, she grew up southeast of town in a family with a homebuilder father. After graduating from Antioch High School, Franks—then Marcia Apple—studied at Middle Tennessee State University in Murfreesboro and O’More College of Design in Franklin.
Her foray into real estate began on the creative side—which also led to a timely encounter with a kindred spirit who would catch her eye…and her heart.
“I was an interior designer, and one year I had a house in the Parade of Homes that won Best Overall Home Design,” she recalls. “A REALTOR® picked up my card and took it to a developer in Franklin.”
She landed an interview with the developer, who hired her to design for him. His name was Jay Franks. (See where this might be going?) The job was a hit, as was the personal connection. “Within about six months, we were married,” she says. What sparked the flame? “He is just a Southern gentleman—and that is attractive to any woman—and a really good man. We have a lot in common. We both come from ‘builder blood.’ His father and grandfather were both builders.”
Up from the ground In the three-plus decades since, the Franks’ have reared two daughters and developed some 30 new neighborhoods in Williamson, Maury and Davidson counties while living out a commitment to preservation.
“We love historic properties,” says Franks, and that shows: The couple’s current abode is a Franklin home built in 1864, where they moved in 2010 after a stint living in the 1819-built farmhouse at Homestead Manner in Thompson’s Station.
Their ventures have included operating a tea room in Franklin (“that was the hardest job we ever had; running a restaurant is really tough,” she says), being part owners of Puckett’s Boat House café, and working to develop a hotel/retail project in downtown Franklin (construction is set to begin in September).
Business is truly a family affair at her firm, Franklin REALTORS®. Marcia and Jay each have offices there; daughter Tonya is the office administrator; and daughter Bryana is an agent working toward her broker’s license.
“It has been marvelous for me to see the girls grow up in the business,” says Franks, who envisions “easing Bryana into being the principal broker, which may free me up to teach classes and play with my grandson (age 2½). He’s the light of my life!”
Franks’ impact on the industry extends to TAR, where she has served as a director and an RPAC trustee, among other volunteer-leadership roles.
Changing perceptions of TREC Before she was appointed to the Commission, Franks admittedly knew little about its inner workings. “I had only been to TREC a couple of times. I was afraid to go. I thought they might find something wrong. Looking back, I hate that licensees sometimes have that impression.
“I was delighted when I got the call, humbled and honored to be selected. I’m so thankful, and I have really, really enjoyed it.” While noting that she and her fellow commissioners have “taken an oath to protect the public,” Franks adds that they also hold a positive view of the industry. “All of us love and appreciate the real estate profession,” she says.
Franks’ eyes have opened to the complexity of regulation—and to the need for every licensee to stay informed. “I have learned more in these two years [on TREC] than in the last 28 years that I have been a REALTOR®, things I didn’t know. ‘Oh, that’s a rule?’ I encourage everybody, everywhere I go, to get a copy of the new Manual of Tennessee Real Estate.** I know it came from TAR and not from TREC, but it is such a valuable resource.”
She also encourages licensees to attend at least one TREC meeting to get a feel for the process—and to pick up eight hours of CE simply by being there.
No room for Grandpa? Franks is especially passionate about two topics: grandfathering and licensure requirements. “The biggest difference I possibly could make in my tenure at TREC is to help accomplish some things” in those areas, she says.
Noting that few other industries permit licensees to “grandfather” out of CE based on tenure or experience, Franks (who is grandfathered herself) says momentum is building toward much-needed change. “I think I’m seeing a little light coming through the door. Just about everyone I talk to agrees that ending it would only help us all in the long run, and especially help the public.
“I see principal brokers who come to TREC and just don’t know the law, because they haven’t had to take a class in 20 years. The professionals in real estate get this; they see that education is a part of doing business. Everybody needs to keep up because the laws and rules change.”
Franks also believes that Tennessee’s initial licensure requirements should increase, along with the amount of CE required for renewal. “Kentucky just announced that their legislature passed an increase from 16 to 64 hours every two years,” she notes. “This is an area that we really need to think about as well.”
Exotic escapades In her down time, Franks especially enjoys crisscrossing the globe.
“I’ve lived within a 30-mile radius my whole life. Maybe that’s why I love to travel so much,” says Franks, who has globetrotted to France, Italy, Greece and many other far-flung destinations. “I love taking my daughters, my grandson, my husband. We try to work it in as much as we can.”
She also embarks on jet-setting adventures with a fun bunch of pals. “We have a group of about 16 girlfriends,” she says. “The nucleus is [WCAR Executive Vice President] Marti Veto. She is Italian. She got us together from all over the United States. We go on these trips for two weeks. I can’t tell you the amount of fun that we have. We just laugh nonstop.”
Nothing to fear At the end of her LCI class last week, a fellow student remarked to her: “I’m just glad I don’t have to be afraid of real estate commissioners anymore.”
Franks appreciated the sentiment. “I know how that feels, because that used to be me,” she says. “I want licensees to know that the commissioners are real people just like they are who care about our business and about protecting the public.”
4. TransactionDesk: Updated Forms Editor 5/24 For those of you who work with Instanet Forms via TransactionDesk, an update to the forms editor will be available Tuesday morning, May 24. The desktop version—the one used on a laptop or desktop computer—will only have minor icon and labeling updates; we don’t expect a need to learn anything new. The larger changes will be seen when editing forms on mobile devices. It will be easier to navigate and use the menus and functions. This is a positive change for creating/editing forms on devices with smaller screens. The forms editor actually is designed in the same format as the navigation schema similar to AuthentiSign.
5. RCS-D Covers Divorce, Elder Care 6/20-21 TAR is hosting an opportunity for you to become better equipped in helping clients navigate seasons of life that can be painful and challenging. The RCS-D designation course (Real Estate Collaboration Specialist–Divorce), June 20 and 21 at TAR, will help you to work with divorce and elder-care clients, and their attorneys, throughout the property buying/selling process. To learn more and register, visit this link (login required).
6. Open House Tip: Use a Sign-out App From our friends at the Real Estate Buyer’s Agent Council (REBAC, an NAR subsidiary), here’s a note on the basics of Maximizing Open Houses. “Some agents send an assistant to cover their open houses, or don’t run open houses at all,” says Today’s Buyer’s Rep. “They’re missing a great opportunity to generate leads and establish that all-important personal contact with people who belong in a lead-development pipeline and could very likely become buyer-clients.” One tip comes from agent Shay Hata: “With each visitor, she makes a point of offering her help and encouraging them to use her as a resource. ‘I use the Open Home Pro app on my iPad and ask visitors to sign out, not in,’ explains Hata. ‘I think people are often hesitant to provide information when they first walk in the door. When I ask them to sign out, they’ve already been talking with me, and I’ve already gotten to know them a bit, which makes them more comfortable giving me information.’ Hata also thinks that using an app encourages people to provide a genuine email address or phone number.” Look for more Open House insights in future editions.
7. Our Annual RPAC-A-THON Is Back Join us Wednesday, May 25, as the REALTOR® Party’s grassroots efforts are on full display to demonstrate that REALTOR®-to-REALTOR® contact gets it done for RPAC in the Volunteer State. As an individual, it can be tough to make a difference in the political arena, but by investing in RPAC we are more powerful and can speak with one, united voice. Through RPAC we can all support elected officials and candidates at the local, state and national levels who care about protecting the commercial and residential real estate industry and private-property rights. Each investment, no matter the amount, only affirms that REALTORS®do make a difference.
**If you’d like to make calls, contact RPAC@tarnet.comand we’ll help you connect with one of several locations where you can reach out to your fellow REALTORS® to strengthen the REALTOR® Party. And be sure to do your part: make an investment in RPAC today at this linkand show that you believe in protecting your industry. You can also watch our live stream Wednesday atRPAC-A-THON.comto see your REALTOR® friends in action.
Source: TAR Legal & Ethics Hot Line Counsel
Who To Pay, How To Pay, and Making Sure You Get Paid REALTORS® perform a great service to the people of Tennessee, and for this service they are compensated. The hotline receives many questions regarding issues of payment. This week we answer some of the most common questions, including paying an out-of-state broker, whether or not a licensee can be paid as an incorporated entity, and getting a buyer to pay an agent’s commission.
8. Can I Pay an Out-of-State Agent?
QUESTION: I have a client who has an out-of-state agent that identifies property for them. This agent is not licensed in Tennessee. Can I pay them a commission or finder’s fee?
ANSWER: TCA §62-13-302(a) states:
“It is unlawful for any licensed broker to employ or compensate any person who is not a licensed broker or a licensed affiliate broker for performing any of the acts regulated by this chapter. A licensed broker may pay a commission to a licensed broker of another state if such nonresident broker does not conduct in this state any of the negotiations for which a commission is paid.”
Therefore, you may compensate an out-of-state licensee if he or she did not conduct any of the negotiations in Tennessee. If the licensee performed any activities in Tennessee requiring a real estate license, they may not be compensated. The same rule applies to referral fees. All fees would have to be paid to the agent’s broker for distribution.
9. Commission Check to Sole Proprietor?
QUESTION: We have an agent that wants their commission check written to their company (a sole proprietorship). Is this acceptable?
ANSWER: An agent can only be paid by their broker, and a broker can only pay a licensed broker or licensed affiliate broker. An agent can only be paid in the name of their license. Therefore, an individual licensee that has “incorporated” himself or established a sole proprietorship CANNOT be paid a commission through the company. The individual holds the real estate license, not the company. The only time that a company can hold a license is if it is a firm license.
10. How to Secure a Commission from a Buyer?
QUESTION: I represent a buyer on a FSBO. We have a signed buyer’s rep agreement. I need to know how to document the payment of my commission from the buyer.
ANSWER: I recommend using the Exclusive Buyer Representation Agreement, form RF141. On line 38 of that form, there is an opportunity for you, as an agent, to have the buyer agree to compensate you if the seller does not offer or pay you for your services. If you have already executed the exclusive buyer representation agreement and that portion was not filled out so the buyer would compensate you, you may consider an amendment to the buyer’s rep agreement, which can be accomplished using form RF641.