CONTENTS
1. The Busby Case & Administrative Fees
2. Congratulations to TREC’s New Leadership!
3. HOT LINE: Disclosing Sellers’ Contact Info?
4. HOT LINE: Are Contracts Assignable?
5. FREE Guide to TN Agency Law
6. Upcoming TAR Courses & Events!
7. Rates Dropped This Past Week
8. Tennessee Vs. Alabama!!!

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1. The Busby Case & Administrative Fees

Much discussion — and unfortunately much misinformation — has been communicated broker-to-broker in recent weeks, in the wake of the “Busby Case” and a federal district court’s ruling regarding a brokerage’s administrative fees charged in addition to its commission.

Included in the MISinformation that’s been circulated are statements that any type of transaction fees, administrative brokerage fees, or fixed dollar commissions are now illegal because of the Busby case. Please do not jump to any unwarranted conclusions because of this case.

Instead, we encourage all brokers to read a letter reviewing the facts of that case and its implications from NAR General Counsel Laurie Janik, by going
HERE.

If you will visit the following page on REALTOR.ORG, you can also access the recording of a June 23 webinar on the Busby Case & RESPA, conducted by RESPA expert Phil Schulman. Go HERE.

[SOURCE: NAR]

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2. Congratulations to TREC’s New Leadership!

At its meeting last week, members of the Tennessee Real Estate Commission (TREC) elected a new Chairman, Grover Collins, a longtime TAR member and owner-broker of Grover Collins Real Estate & Auction in Lewisburg, TN. Isaac Northern, another longstanding TAR member and Memphis broker, was elected Vice Chairman of the Real Estate Commission. This is obviously a critical time for the industry and the state’s real estate markets, and we look forward to their leadership of the Commission.

Congratulations to both gentlemen!

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3. HOT LINE: Disclosing Sellers’ Contact Info?

QUESTION: This past Friday I received an email from a person who was the buyer of a home I had listed in March of 2008. The email stated this: “You were the listing agent on the home I purchased in March of 2008. The Sellers failed to disclose a drainage problem in the back yard. I want to contact them to discuss this situation, which has cost me several hundred dollars to repair. Would you send me their address so I can discuss this situation with them? I don’t want to bring an attorney into this, so I’m hoping we can work it out between us.”

I immediately pulled the file and called my sellers and told them of the email and asked them if they knew of a drainage problem at their home I sold for them over one year ago. They said, “No, we had no idea.” They lived in the home for about three years and they never had an issue with a drainage problem in the back yard whatsoever. I told them what the buyer was requesting, and they told me “Don’t give her any information yet.” I told them to let me know what to do and that I would not respond to the email. I also placed a call to the buyer’s agent that was involved and left her a message to call me. The buyer did have a home inspection. Please advise me on how to handle this situation.

ANSWER: Under agency law, you are required to follow the lawful instructions of your client. Therefore, you CANNOT provide their current contact information without their permission to do so. You also have no obligation to give this information to them. All you can do is pass along information to your client. Be careful if your client wants you to negotiate a solution. You cannot do more than simply pass along information. Anything further will require an attorney.

The only way that you can disclose the client’s information would be subject to a subpoena or testifying at a deposition or in court (required under a subpoena). Otherwise, you cannot legally disclose this information.

You could possibly be brought into a lawsuit if one is filed. This does not mean that you have done anything wrong. You will need to contact your E&O provider immediately to determine if you have coverage and if so, whether they will provide you with an attorney. If they do not provide you with an attorney, I would recommend that you get one of your own as quickly as possible as you only have a certain period of time in which to respond to a lawsuit.

[SOURCE: TAR's Legal & Ethics Hot Line Attorneys]

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4. HOT LINE: Are Contracts Assignable?

QUESTION: Regarding the Purchase and Sale agreement, is the agreement Assignable to a different buyer as it is currently written, or does language have to be added to make it assignable? We have an agent who has been told by an attorney that contracts in Tennessee are assignable unless the contract specifically states that it is not.

ANSWER: The TAR contracts are assignable as written. If you do not want them to be assignable to a different buyer, then additional language would have to be added to the special stipulations paragraph. Please understand that the original buyer will still be obligated to close on the transaction if the second buyer fails to close on the transaction. If you have a buyer who wishes to assign his rights under the Purchase and Sale Agreement, I would recommend having an attorney draft the assignment documents so as to provide as much protection as possible for your client.

[SOURCE: TAR's Legal & Ethics Hot Line Attorneys]

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5. FREE Guide to TN Agency Law

At the end of June, we announced the availablity of a new resource. As a FREE service to our members, a complete Guide to Tennessee’s Agency Law has been produced by TAR, in cooperation with the Tennessee Real Estate Educational Foundation (TREEF). As noted recently, agency topped the list of problems nationally in NAR’s 2009 Legal Scan!

This Guide to Tennessee’s Agency Law is written for our REALTOR members, their brokers, and instructors. It can be downloaded in PDF format for FREE HERE.

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6. Upcoming TAR Courses & Events!

TAR Forms 101 — July 27 (Nashville, TAR Office), 4 hours CE. For more information, go HERE.

TransactionDesk Basic Course — July 27 (Nashville, TAR Office), 3 hours CE. For more information, go HERE.

Educators Conference 2009 — July 28-29 (Nashville, TAR Office). This annual event, hosted by TREEF, features education sessions and workshops for association staff & Instructors. For more information, go HERE.

Instructor-Training Workshop — August 27-28 (Nashville, TAR Office), 16 hours CE. This is another offering of our popular two-day instructor-training workshop, “The Learning-Centered Instructor”, at the TAR Office in Nashville. For more information, go HERE.

TAR’s 2009 Annual Convention! — September 15-18 (Point Clear, AL), 12 hours CE. TAR will be hosting the 2009 TAR Annual Convention in Clear Point, Alabama, at the Grand Hotel Marriott Resort, Golf Club, & Spa. National speakers include real estate guru Stefan Swanepoel, Karel Murray, Internet-savvy Randy Eagar, and productivity wizard Merlin Mann! For more information about the Convention program or our hotel in Point Clear, go HERE.

PLEASE NOTE: SAVE $80!!! Early-bird registration deadline for the TAR Convention is July 28! Register by July 28 for $195 …the fee jumps to $275 after that date!

Watch each week’s TAR DIGEST for schedule changes and additions!

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7. Rates Dropped This Past Week

Interest on 30-year fixed mortgages, 15-year fixed loans, five-year adjustable-rate mortgages, and one-year ARMs all fell this past week, according to Freddie Mac. The average on 30-year financing slipped to 5.2 percent from 5.32 percent a week ago. The 15-year mortgage declined to 4.69 percent, down from 4.77 percent; five-year ARMs were down to 4.82 percent from 4.88 percent; and one-year ARMs fell to 4.82 percent from 4.94 percent.

[SOURCES: Freddie Mac; Information, Inc.]

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8. Tennessee VS. Alabama!!!

No …it’s not what you’re thinking! TAR has been invited by the Alabama Association of REALTORS to participate in a food drive — a “head-to-head” competition between associations. Since TAR is having its Convention in Alabama and AAR is having its Convention in Tennessee, this little rilvary was dreamed up. To make this year interesting, Alabama REALTORS have challenged Tennessee REALTORS to see who can donate the largest number of cans of food!

TENNESSEE’s STRATEGY: To put a “W” in the WIN column, Tennessee is doing it a little bit different than Alabama. You don’t have to physically bring in cans of food to any location. Rather a simple donation of ten dollars ($10) purchases one case of can goods (24 cans). Even better, you can make your donations online! Totals will be tallied and presented at the TAR Convention in September. Let’s show Alabama how Tennessee REALTORS CAN make a difference!!!

We’re going to see which local associations CAN donate the most cans to this drive! Awards will be given to the top “small”, “medium”, and “large” local association categories. Visit the TAR Newsroom now!

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TAR’s Home Page: http://www.tarnet.com

Members receive the TAR DIGEST automatically, through their email address in NRDS. Non-members (such as Office Managers) may subscribe at: http://www.tardigest.com

Back issues of the DIGEST may be viewed and searched at: http://www.tardigest.com

CONTENTS
1. EXCERPT: Guide to TN Agency Law
2. Upcoming Courses & Events!
3. Almost No Change in Rates
4. IMPORTANT NOTICE TO READERS — Please Read!

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1. EXCERPT: Guide to TN Agency Law

A complete Guide to Tennessee’s Agency Law has been produced by the Tennessee Association of REALTORS (TAR), in cooperation with the Tennessee Real Estate Educational Foundation (TREEF).  It’s now available for FREE to all licensees, brokers, and instructors and can be downloaded in PDF format HERE! [There is also a link to this Guide to the Newsroom Section of the TAR Website.]

Following is an excerpt from the Guide:

——

MYTH: You can be a seller’s agent (the listing agent) and a facilitator for the buyer at the same time.

Wrong! A licensee can only wear one “agency hat” at a time in a given transaction. A licensee cannot be working as a seller’s agent for a seller whose property the licensee has listed and simultaneously represent himself/herself as a facilitator to an unrepresented buyer who might like to purchase that property! At best, this practice is deceptive and an obvious effort to gain or keep everyone’s trust without telling them the truth. A licensee has only one agency status at a time in a transaction.

If the licensee is the listing agent, for example, and a buyer approaches the licensee regarding this property, then normally the licensee would disclose to this buyer that he/she represents the seller. There is nothing in Tennessee law that prevents a seller’s agent from assisting this buyer, completing an offer to purchase for the buyer (if that’s what the buyer wants to do), presenting that offer, etc., while the licensee remains a seller’s agent …as long as the buyer knows that the licensee represents the seller and is going to promote the seller’s best interests.

Some Tennessee firms have adopted office policies that call for their salespeople to default to facilitator status automatically if they have listed a property and an unrepresented buyer approaches them regarding their listing. The listing agreement used by these offices typically includes language by which the seller gives prior consent for their listing agent’s default to facilitator status if an unrepresented buyer comes along. If a licensee’s office policy dictates this kind of action, the licensee is STILL obligated to go back to the seller at the time he/she defaults to facilitator and communicate to the seller that the licensee no longer represents him/her (confirming this subsequent disclosure in writing).

Once a licensee tells any party or prospective party to a transaction that the licensee is a facilitator, the licensee is saying, “I don’t represent anybody – seller or buyer – as an agent in this transaction!”

——

As noted in last week’s DIGEST, agency topped the list of problems nationally in NAR’s 2009 Legal Scan! To download the complete Guide in PDF format, click HERE.

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2. Upcoming TAR Courses & Events!

July 27: TAR Forms 101 (Nashville, TAR Office), 4 hours CE. For more information, go HERE.

July 27: TransactionDesk Basic Course (Nashville, TAR Office), 3 hours CE. For more information, go HERE.

A Special Event for Educators & Instructors: On July 28-29, TREEF will host its Educators Conference 2009, an annual event with sessions and workshops for instructors and association staff. For more information, go HERE.

Instructor-Training: On August 27-28. we will hold another offering of our popular two-day instructor-training workshop, “The Learning-Centered Instructor”, at the TAR Office in Nashville, accredited for 16 hours of CE. For more information, go HERE.

TAR’s 2009 Annual Convention! From September 15th – 19th, TAR will be hosting the 2009 TAR Annual Convention in Clear Point, Alabama, at the Grand Hotel Marriott Resort, Golf Club, & Spa. National speakers include real estate guru Stefan Swanepoel, Karel Murray, Internet-savvy Randy Eagar, and productivity wizard Merlin Mann! For more information about the Convention program or our hotel in Point Clear, go HERE.

Watch each week’s TAR DIGEST for schedule changes and additions!

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3. Almost No Change in Rates

Interest on 30-year fixed mortgages settled at an average of 5.42 percent this past week, reports Freddie Mac, up from 5.38 percent in the previous week but lower than the prevailing rate of 6.45 percent a year ago. Five-year, hybrid adjustable-rate mortgages also bumped up a couple of notches to 4.99 percent; but 15-year fixed loans and one-year ARMs moved in the opposite direction. The former slipped to 4.87 percent from 4.89 percent, while the latter fell to 4.93 percent from 4.95 percent.

[SOURCES: Freddie Mac; Information, Inc.]

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4. IMPORTANT NOTICE TO READERS

After this issue, we are changing email distribution of the TAR DIGEST. The current email distribution list for the TAR DIGEST will be discontinued at this time!

There will be no TAR DIGEST next week.

MEMBERS: Starting with the 7-14-09 issue, the TAR DIGEST will be emailed to ALL TAR members who have a valid email address in their NRDS records (that the local associations of REALTORS maintain). NOTE: TAR Members no longer need to subscribe! To continue receiving the DIGEST in July and beyond, please ensure that your local association of REALTORS has entered your current, correct email address in NRDS.

NON-MEMBERS: Non-members (e.g., office managers) who have been receiving the TAR DIGEST may re-subscribe at the TAR DIGEST website AFTER JULY 10. [Do NOT re-subscribe before then. The current email list will be deleted just before that date.]

The TAR DIGEST will still be posted on the www.tardigest.com website, for easy searchable access to past editions, and access to a printer-friendly current edition.

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TAR’s Home Page: http://www.tarnet.com

CONTENTS
1. Agency Issues Top Legal Concerns Nationally!
2. Fannie Mae Reconfirms Short Sale Commission Policy
3. TAR Is On Twitter!
4. HOT LINE: Messing with the Escrow Account?
5. HOT LINE: No Copy of the HUD-1?
6. Upcoming Courses & Events!
7. Rates Ease A Little!
8. IMPORTANT NOTICE TO READERS

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1. Agency Issues Top Legal Concerns Nationally!

The National Association of REALTORS (NAR) has just released its 2009 NAR Legal Scan, a survey of the current legal environment faced by real estate professionals. NAR undertakes this comprehensive research project every two years. It analyzes current legal liability issues and identifies emerging legal and risk issues. The Scan is based on surveys of key people in the real-estate industry, as well as data obtained from case law and statutory research.

Agency issues are the top area of concern for real estate professionals, along with RESPA and Property Condition Disclosure. These issues, along with As-Is Clauses and Commission Disputes, seem to be particularly important in the current down market, where many licensees may be unsure of how to handle the unique challenges being presented. Other issues emerging from the current economy include wage-and-hour claims and potential liability for “mortgage rescue” scams.

To download the entire 2009 NAR Legal Scan (Warning: it’s a large file!), click HERE.

Next week’s 7-2-09 edition of the TAR DIGEST will be a special edition focused exclusively on Tennessee Agency Law! Look for it!

[SOURCE: NAR's Legal Affairs Department]

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2. Fannie Mae Reconfirms Short Sale Commission Policy

In discussions between NAR and Fannie Mae, Fannie Mae has reconfirmed its short sale commission policy and established a process for REALTORS to follow if issues arise.

On February 24, 2009, Fannie Mae sent Announcement 09-03 to its servicers instructing them not to negotiate commissions on short sales below the amount negotiated by the listing agent, unless the commission exceeds 6 percent. The Announcement reminded servicers that third party approvals (i.e., private mortgage insurers) may be required and can affect commissions.

In response to concerns raised by NAR that some servicers of Fannie Mae loans are unaware of this policy or believe it is not binding, Fannie Mae has established a process for NAR members when short sale commission issues arise.

To download a PDF of the contact information and steps to take if you want to appeal an action taken by a lender, click HERE.

[SOURCES: NAR; Fannie Mae]

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3. TAR Is On Twitter!

This past week, someone remarked that the next Nobel Peace Prize should go to whoever invented Twitter … because Twitter, Facebook, and other social media have been the only means by which the Iranian people could truly communicate with one another and with the outside world during the turmoil in Iran!

Twitter is a free Internet service by which you can send and receive SHORT (140 characters or less!) updates to your Twitter page from those you choose to “follow”! [You can also opt to receive updates on your phone, etc. You choose how much -- and by which means -- you want to receive and/or send updates.]

TAR is now on twitter! To follow TAR — and receive a brief update whenever there is an announcement — go to:
http://twitter.com/TNAOR

If you already have a Twitter account, simply login and click to follow TNAOR. If you don’t already have a Twitter account, you can sign up for free and then click to follow!  It’s an easy — unobtrusive — way to get quick, short updates from TAR staff.

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4. HOT LINE: Messing with the Escrow Account?

QUESTION: I am the managing broker at a company in which I have an ownership interest. The other owner of the company is messing with the funds in the trust account. What degree of responsibility do I have with regard to this matter? What should I do?

ANSWER: Unfortunately, since you are the principal broker, in TREC’s view you are ultimately responsible. Therefore, it may be ultimately up to you to replace any missing funds, at least in the short run. We recommend an immediate audit of the accounts to determine if any money is gone and, if so, where it went, when it went and on whose instructions. You can request copies of all statements and checks from the bank.

If you can determine who authorized any missing funds to be removed, you should be able to go after them to return them. We would recommend talking to your lawyer about your legal options at this point.

[SOURCE: TAR's Legal & Ethics Hot Line Attorneys]

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5. HOT LINE: No Copy of the HUD-1?

QUESTION: A title company has refused to release a copy of the HUD-1 to the agents for the buyer or seller. Under Tennessee law, is a real estate agent required to retain a copy of the HUD-1 in their files? This title company will not release a sealed document in case of audit either. How do I handle this situation?

ANSWER: You indicated that this sale did not involve a federally regulated mortgage. Therefore, RESPA will not apply. Your main concern is to make sure that your files are as complete as possible for your audit. If you cannot get a copy from your client and the title company will not give you one either, we would recommend that you document this in your file. We would recommend sending a letter back to the title company which confirms their refusal to provide a copy and then send it to them. Keep a copy of a return receipt card or fax confirmation sheet in your file to demonstrate that they received it. This should provide any auditor with evidence that you attempted to get the HUD-1, but were unable to do so.

[SOURCE: TAR's Legal & Ethics Hot Line Attorneys]

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6. Upcoming TAR Courses & Events!

July 27: TAR Forms 101 (Nashville, TAR Office), 4 hours CE. For more information, go HERE.

July 27: TransactionDesk Basic Course (Nashville, TAR Office), 3 hours CE. For more information, go HERE.

A Special Event for Educators & Instructors: On July 28-29, TREEF will host its Educators Conference 2009, an annual event with sessions and workshops for instructors and association staff. For more information, go HERE.

Instructor-Training: On August 27-28. we will hold another offering of our popular two-day instructor-training workshop, “The Learning-Centered Instructor”, at the TAR Office in Nashville, accredited for 16 hours of CE. For more information, go HERE.

TAR’s 2009 Annual Convention! From September 15th – 19th, TAR will be hosting the 2009 TAR Annual Convention in Clear Point, Alabama, at the Grand Hotel Marriott Resort, Golf Club, & Spa. National speakers include real estate guru Stefan Swanepoel, Karel Murray, Internet-savvy Randy Eagar, and productivity wizard Merlin Mann! For more information about the Convention program or our hotel in Point Clear, go HERE.

Watch each week’s TAR DIGEST for schedule changes and additions!

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7. Rates Ease A Little!

Coming down from a seven-month high of 5.59 percent a week ago, rates on 30-year fixed home loans settled at 5.38 percent last week. Freddie Mac reports that interest on 15-year fixed mortgages was lower as well, slipping to 4.89 percent from 5.06 percent over the same period. An upward trend in borrowing costs over the past three weeks was linked to rising yields on long-term government debt, sparked by investor concerns over inflation. According to Freddie Mac, however, new data suggest that inflation is under control.

[SOURCES: Freddie Mac; Information, Inc.]

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8. IMPORTANT NOTICE TO READERS

After July 4, we will be changing email distribution of the TAR DIGEST. The current email distribution list for the TAR DIGEST will be discontinued at that time!

Starting with the 7-14-09 issue, the TAR DIGEST will be emailed to ALL TAR members who have a valid email address in their NRDS records (that the local associations of REALTORS maintain). To continue receiving the DIGEST in July and beyond, please ensure that your local association of REALTORS has your current and correct email address.

For non-members (e.g., office managers) who have been receiving the TAR DIGEST, there will be a mechanism set up so that you may continue to receive it.

The TAR DIGEST will still be posted on the www.tardigest.com website, for easy searchable access to past editions, and access to a printer-friendly current edition.

_______________________________________________________
TAR’s Home Page: http://www.tarnet.com

TO SUBSCRIBE to the TAR DIGEST: Simply go to the TAR DIGEST website at www.tardigest.com with your web browser, and look down the left-hand column of that page for “Get News By E-Mail”. Click on that and follow the instructions.

After entering your email address, you will receive an email from the system (confirmations@emailenfuego.net) with a link that you MUST click on, to activate your subscription. Thanks!

CONTENTS
1. Short Sale Scams
2. “Impressing” Your Sphere of Influence
3. TAR Governmental Affairs Survey - PLEASE RESPOND!
4. HOT LINE: Lender Dictating Who Closes?
5. HOT LINE: Being Truthful About Who You Are
6. Upcoming Courses & Events!
7. Rates Go Higher Again
8. IMPORTANT NOTICE TO READERS

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1. Short Sale Scams

This spring, FBI Deputy Director John Pistole gave some enlightening testimony before Congress. In a wide-ranging presentation, he noted: “The FBI has experienced and continues to experience an exponential rise in mortgage fraud investigations. The number of open FBI mortgage fraud investigations has risen from 881 in FY 2006 to more than 2,000 [in 2009].”

In his testimony (that you can read HERE in its entirety), Deputy Director Pistole commented on a variety of fraudulent scams and schemes that have sadly become even more common in the midst of the nation’s financial troubles.

There are a growing number of companies and individuals more than willing to profit from others’ misfortunes, not always ethically or legally! Some of the scams involve short sales and attempts to “help” consumers through the short sale process.

REALTORS should, at the very least, become more familiar with some of the legal and ethical pitfalls that surround the short sale process. NAR’s REALTOR Magazine Online has published several articles to help members become better-informed on this topic. Here are two worth reading …and even discussing at your next sales meeting:

Short Sales: The New Wild West

Short Sales: 7 Legal Pitfalls

[SOURCES: FBI.GOV; REALTOR Magazine Online]

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2. “Impressing” Your Sphere of Influence

Last week, REALTY TIMES columnist Jennifer Allan wrote “‘Touching’ Your Sphere of Influence versus ‘Impressing’ them.“ It’s one of those articles with a simple but profound lesson that more REALTORS should take to heart, if they want to see their businesses grow …especially in the current market!

Jennifer explains the difference between “touching” folks and “impressing” them:

*** BEGIN QUOTE ***
…by impress, I mean that the person you just interacted with walks away from the interaction feeling just a little bit (or a whole lot) better than he did before.

Obviously, he’s not saying to himself “Thank GOD I got away – I thought she’d never shut up.” Or “That’s the last time I answer the phone when HE calls” or “What a flake.” The cool thing about impressing someone is that the positive impression you make on them will stick around a lot longer than the impression you make with a farming postcard, drip email or quarterly newsletter.
*** END QUOTE ***

To read the entire article, go HERE.

[SOURCE: Realty Times]

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3. TAR Governmental Affairs Survey – PLEASE RESPOND!

The staff and volunteers who work with the Governmental Affairs programs of the Tennessee Association of REALTORS (TAR) work hard to represent and promote your interests. We’ve posted a simple, SIX-QUESTION survey to help us deliver those services more effectively. PLEASE take just a couple of minutes to give us your opinions. And thank you in advance for your help!

To take the TAR Governmental Affairs Survey, just go HERE.

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4. HOT LINE: Lender Dictating Who Closes?

QUESTION: I have a buyer whose lending company is dictating who the closing company is. They only gave her one choice for a closing company. Is this a RESPA violation?

ANSWER: A lender can dictate who will represent their interests and close their portion of a loan. However, the buyers can hire their own attorney to represent their interests if they wish. In addition, the lender cannot dictate who will close the seller’s portion of the transaction.

[SOURCE: TAR's Legal & Ethics Hot Line Attorneys]

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5. HOT LINE: Being Truthful About Who You Are

QUESTION: A property is on a 30-day lease. A REALTOR tells the occupants that he is an insurance representative and needs to take pictures, but his intent is to put the pictures on the MLS. Is this legal/ethical?

ANSWER: NO. The taking of the photographs may be permissible – that depends upon the terms of the lease. However, the real estate agent CANNOT misrepresent to the tenants that he is a representative from the insurance company. Pursuant to Tenn. Code Ann. 62-13-312(b)(1), a real estate agent can be disciplined for “Making any substantial or willful misrepresentation.” In addition, if the agent is a REALTOR, he has violated Article 12 of the NAR Code of Ethics which states:

REALTORS shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations. REALTORS shall ensure that their status as real estate professionals is readily apparent in their advertising, marketing, and other representations, and that the recipients of all real estate communications are, or have been, notified that those communications are from a real estate professional.

[SOURCE: TAR's Legal & Ethics Hot Line Attorneys]

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6. Upcoming TAR Courses & Events!

July 27: TAR Forms 101 (Nashville, TAR Office), 4 hours CE. For more information, go HERE.

July 27: TransactionDesk Basic Course (Nashville, TAR Office), 3 hours CE. For more information, go HERE.

A Special Event for Educators & Instructors: On July 28-29, TREEF will host its Educators Conference 2009, an annual event with sessions and workshops for instructors and association staff. For more information, go HERE.

Instructor-Training: On August 27-28. we will hold another offering of our popular two-day instructor-training workshop, “The Learning-Centered Instructor”, at the TAR Office in Nashville, accredited for 16 hours of CE. For more information, go HERE.

TAR’s 2009 Annual Convention! From September 15th – 19th, TAR will be hosting the 2009 TAR Annual Convention in Point Clear, Alabama, at the Grand Hotel Marriott Resort, Golf Club, & Spa. National speakers include real estate guru Stefan Swanepoel, Karel Murray, Internet-savvy Randy Eagar, and productivity wizard Merlin Mann! For more information about the Convention program or our hotel in Point Clear, go HERE.  Register soon!

Watch each week’s TAR DIGEST for schedule changes and additions!

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7. Rates Go Higher Again

Higher interest rates put the brakes on mortgage refinancing last week, according to Freddie Mac. The firm’s weekly survey pegged interest on 30-year fixed mortgages at an average of 5.59 percent — up from 5.29 percent last week and the highest rate since November 2008. Interest climbed to 5.06 percent from 4.79 percent for 15-year fixed loans; to 5.17 percent from 4.85 percent for five-year, adjustable-rate mortgages; and to 5.04 percent from 4.81 percent for one-year ARMs. Freddie Mac chief economist Frank Nothaft said the gains are not yet affecting home purchase loans.

[SOURCES: Freddie Mac; Information, Inc.]

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8. IMPORTANT NOTICE TO READERS

In July of 2009, we will be changing email distribution of the TAR DIGEST!

Our first issue in July will be the 7-14-09 issue, and — starting with that issue — the TAR DIGEST will be emailed to ALL TAR members who have a valid email address in their NRDS records (that the local associations of REALTORS maintain). To continue receiving the DIGEST in July and beyond, please ensure that your local association of REALTORS has your current and correct email address.

For non-members (e.g., office managers) who have been receiving the TAR DIGEST, there will be a mechanism set up by then so that you may continue to receive it.

The TAR DIGEST will still be posted on the www.tardigest.com website, for easy searchable access to past editions, and a printer-friendly current edition.

_______________________________________________________
TAR’s Home Page: http://www.tarnet.com

TO SUBSCRIBE to the TAR DIGEST: Simply go to the TAR DIGEST website at www.tardigest.com with your web browser, and look down the left-hand column of that page for “Get News By E-Mail”. Click on that and follow the instructions.

After entering your email address, you will receive an email from the system (confirmations@emailenfuego.net) with a link that you MUST click on, to activate your subscription. Thanks!

Our TAR Legal & Ethics Hot Line attorneys wanted to clarify one of their Hot Line Questions-and-Answers published in the most recent TAR DIGEST. The question involved providing the appraiser with a copy of the contract. Their clarification follows:

——————-

This is to clarify the response provided in the June 9, 2009 TAR Digest regarding whether it is permissible to give an appraiser a copy of the executed contract. Pursuant to the 2008-2009 Uniform Standards of Professional Appraisal Practice,

When the value opinion to be developed is market value, an appraiser must, if such information is available to the appraiser in the normal course of business:
(a) analyze all agreements of sale, options, and listings of the subject property current as of the effective date of the appraisal; and
(b) analyze all sales of the subject property that occurred within the three (3) years prior to the effective date of the appraisal.

Note that this does not necessarily mean that the contract should be provided by the real estate agent. If the agent does provide the appraiser with a copy, however, the agent should first secure the permission of all parties to the contract. This is because the parties to the contract may deem the contract to contain confidential, personal information.

The other party involved in this issue is the lender. If the appraiser is hired by the lender and the lender requests that the agent provide a copy of the contract to the appraiser, it is acceptable to do so once the agent has the consent of all parties to the contract. If possible, it would be a better practice for the agent if the appraiser is provided a copy of the contract by the lender. This would allow everyone to receive the information they need and will prevent the agent from inadvertently upsetting either the parties to the contract or the lender. As far as the Home Valuation Code of Conduct is concerned, it specifically states that this is permitted. Specifically, it prohibits the lenders or a third party authorized by the lender from “providing to an appraiser an anticipated, estimated, encouraged, or desired value for a subject property or a proposed or target amount to be loaned to the borrower, except that a copy of the sales contract for purchase transactions may be provided.“ Section I.B.(6) of the Home Valuation Code of Conduct. (Emphasis added).

——————-

The regular edition of the TAR DIGEST will be still be published early next week.

CONTENTS
1. The Home Valuation Code of Conduct
2. HOT LINE: Giving the Appraiser a Copy of Contract?
3. HOT LINE: Misleading Advertising?
4. HOT LINE FOLLOW-UP: Housing for Older Persons
5. A Video Clip To Watch Online
6. IMPORTANT NOTICE TO READERS
7. Get to the Point!
8. Upcoming Courses & Events!
9. Rates Jump Higher

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1. The Home Valuation Code of Conduct

On December 23, 2008, New York State Attorney General Andrew M. Cuomo, Fannie Mae and Freddie Mac (government sponsored enterprises) announced the final agreement of the Home Valuation Code of Conduct (HVCC). The agreement establishes standards on solicitation, selection, compensation, conflicts of interest and appraiser independence. The HVCC took effect on May 1, 2009, for any mortgage that will be sold to the GSEs. Federal Housing Administration (FHA) and Federal Home Loan Bank (FHLB) mortgages are not covered in the agreement.

At the recent meetings of the National Association of REALTORS (NAR) in Washington, many REALTORS came away still concerned about the impact of this new Home Valuation Code of Conduct. Concerns revolve around whether or not REALTORS can still communicate directly with appraisers, providing additional comps, etc.

NAR has published a downloadable flyer to address some of the myths surrounding this new Code. Dispelling one myth, NAR is assuring members that “REALTORS and lenders can talk to appraisers, including requests to consider additional data or to correct errors.”

For a more complete briefing on this Home Valuation Code of Conduct — including what is and is not permitted — and a link to the above-mentioned flyer, go HERE.

NAR’s leaders are continuing to monitor this new Code and are doing what they can to address a number of unresolved problems that have arisen with its implementation!

[SOURCE: NAR]

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2. HOT LINE: Giving the Appraiser a Copy of Contract?

QUESTION: An appraiser is asking for a copy of the contract on a property. Can I legally give it to him?

ANSWER: NO. You should not give the appraiser a copy of the contract. This is confidential information, and the appraiser does not need a copy of the contract in order to perform the appraisal. If the lender wants him to have a copy of the contract, then the lender can provide it to the appraiser.

[SOURCE: TAR's Legal & Ethics Hot Line Attorneys]

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3. HOT LINE: Misleading Advertising?

QUESTION: When I do an Internet search on my local area, another company appears that has no office anywhere near here! That company simply doesn’t serve this part of the state. Is this not in violation of Article 12, Standard of Practice 12-10? This is deceptive to me and, when I contacted them and asked how they handled the leads, the young lady on the phone stammered all over herself, put me on hold and came back and said they have local companies they work with. When I asked who, she would not tell me. I wonder if they are selling the leads back to people who have the properties listed or giving them for a referral fee? Anyway, this does not seem right to me. What do you think?

ANSWER: We agree with you on this. This is terribly misleading if they are advertising or using the Internet in such a way as to lead the consumer to believe that they are in one area of the state and are not. You can always file a complaint with their local association under Article 12, SOP 12-10. Or you could file a complaint with TREC for misleading advertising. (Tenn. Code Ann. 62-13-312(b)(4).

[SOURCE: TAR's Legal & Ethics Hot Line Attorneys]

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4. HOT LINE FOLLOW-UP: Housing for Older Persons

In the May 5th TAR DIGEST, we published an article on senior retirement facilities. The Hot Line attorney based the response on the Housing for Older Persons Act, a federal law. There is ALSO a statute in Tennessee that is a bit more strict. It has two different classifications of “housing for older persons”.

The first requires that the housing is intended for persons who are 55 years of age and older. At least 90% of the units must be occupied by at least one person who is 55 or older. It must provide significant facilities and services that are specifically designed to meet the social and/or physical needs of persons aged 55 and older, and it must publish and adhere to policies and procedures which demonstrate that the owner and/or manager intends to provide housing for those aged 55 and older. The second requires that the housing is intended for and it only used by those who are 62 years and older. This information comes from Tenn. Code Ann. 4-21-602(d)(2).

[SOURCE: TAR's Legal & Ethics Hot Line Attorneys]

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5. A Video Clip To Watch Online

At the May 7, 2009, membership meeting of the Northeast Tennessee Association of REALTORS (NETAR), state RPAC Fundraising Chair Pat Beech addressed the membership, and her presentation was captured on video! It is well worth watching and is viewable on the NETAR website HERE.

Kudos to Pat …and to NETAR for providing such an easy way for others to view her presentation!

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6. IMPORTANT NOTICE TO READERS

In July of 2009, we will be changing email distribution of the TAR DIGEST!

Our first issue in July will be the 7-14-09 issue, and — starting with that issue — the TAR DIGEST will be emailed to ALL TAR members who have a valid email address in their NRDS records (that the local associations of REALTORS maintain). To continue receiving the DIGEST in July and beyond, please ensure that your local association of REALTORS has your current and correct email address.

For non-members (e.g., office managers) who have been receiving the TAR DIGEST, there will be a mechanism set up by then so that you may continue to receive it.

The TAR DIGEST will still be posted on the www.tardigest.com website, for easy searchable access to past editions, and a printer-friendly current edition.

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7. Get to the Point!

From September 15th – 19th, TAR will be hosting the 2009 TAR Annual Convention in Point Clear, Alabama, at the Grand Hotel Marriott Resort, Golf Club, & Spa. National speakers include real estate guru Stefan Swanepoel, Karel Murray, Internet-savvy Randy Eagar, and productivity wizard Merlin Mann! For more information about the Convention program or our hotel in Point Clear, go HERE.

This should be a WONDERFUL Convention, in a great place to relax and recharge after a challenging year!

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8. Upcoming TAR Courses & Events!

June 16: TAR Forms 101 (Nashville, TAR Office), 4 hours CE. For more information, go HERE.

June 16: TransactionDesk Basic Course (Nashville, TAR Office), 3 hours CE. For more information, go HERE.

[The June 11 offerings of the above two courses are full, but there is still room in the June 16 offerings!]

A Special Event for Educators & Instructors: On July 28-29, TREEF will host its Educators Conference 2009, an annual event with sessions and workshops for instructors and association staff. For more information, go HERE.

Instructor-Training: On August 27-28. we will hold another offering of our popular two-day instructor-training workshop, “The Learning-Centered Instructor”, at the TAR Office in Nashville, accredited for 16 hours of CE. For more information, go HERE.

Watch each week’s TAR DIGEST for schedule changes and additions!

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9. Rates Jump Higher

Freddie Mac reports a jump in the 30-year fixed mortgage rate to a 25-week high of 5.29 percent during the week ended June 4, up from 4.91 percent the prior week. The 15-year fixed rate also increased, rising to 4.79 percent from 4.53 percent, with Freddie Mac chief economist Frank Nothaft indicating that the gains follow a surge in long-term bond yields. Meanwhile, the five-year adjustable mortgage rate climbed to 4.85 percent from 4.82 percent; and the one-year ARM surged to 4.81 percent from 4.69 percent.

[SOURCES: Freddie Mac; Information, Inc.]

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TAR’s Home Page: http://www.tarnet.com

TO SUBSCRIBE to the TAR DIGEST: Simply go to the TAR DIGEST website at www.tardigest.com with your web browser, and look down the left-hand column of that page for “Get News By E-Mail”. Click on that and follow the instructions.

After entering your email address, you will receive an email from the system (confirmations@emailenfuego.net) with a link that you MUST click on, to activate your subscription. Thanks!

CONTENTS
1. Ins and Outs of Short Sales
2. HUD Clarifies Guidance on Tax Credit
3. HOT LINE: Reducing My Commission?
4. HOT LINE: A Conflict of Interest?
5. BEWARE: Lead Generation Companies
6. Fewer Than 200 To Go!
7. Upcoming Courses & Events!
8. Rates Rise

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1. Ins and Outs of Short Sales

How much do YOU know about short sales? Since they now represent a significant portion of market activity in many areas, you should probably check your own Short Sales IQ to ensure that you’re at least familiar with the basics!

To help out, NAR’s REALTOR Magazine has posted an 8-question self-test online that you can take and discover what you know …or don’t know. It’s easy to take! To do so, go HERE.

TIP for Brokers: This could make a good exercise for your next sales meeting.

[SOURCE: REALTOR Magazine Online]

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2. HUD Clarifies Guidance on Tax Credit

Late last week, HUD finally issued further guidance on using the first-time homebuyer tax credit as (part of) a buyer’s down payment:

*** BEGIN QUOTE ***
Under the guidance, FHA-approved lenders can develop bridge loans that home buyers can use to help cover their closing costs, buy down their interest rate, or put down more than the minimum 3.5 percent.

The loans can’t be used to cover the minimum 3.5 percent, senior HUD officials told reporters on a conference call Friday morning.

Thus, buyers applying for FHA-backed financing with an FHA-approved lender that offers a bridge-loan program can get a bridge loan to bring down the upfront costs of buying a home significantly but would still have to come up with the minimum 3.5 percent downpayment.
*** END QUOTE ***

To read more, go HERE.

[SOURCES: REALTOR Magazine Online; HUD]

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3. HOT LINE: Reducing My Commission?

QUESTION: I am getting requests from buyers whoare not represented by an agent.  They want me to compromise (reduce) the commission due to this fact. Is there something I can present to them showing that, regardless of whether they are represented or not, the full commission is paid?

ANSWER: There really isn’t a black and white rule that states that, if there is not a cooperating agent, the seller’s agent gets the entire amount of the commission. HOWEVER, the amount of the commission is payable to you by the seller regardless of whether there is another agent. This is addressed in the listing agreement; this information is confidential between you and your client. The listing agreement indicates that you can cooperate with other agents by listing it in the MLS and can offer a cooperative commission. We would recommend speaking to your clients about this since you must keep them informed of information that concerns their property. You can agree to cut your commission rate, but you do not have to do so.

The purchase and sale agreement is a separate contract to which you are NOT a party. Therefore, a reduction of your commission should not be addressed in this contract. Your commission and any cooperating commission that may be offered should be addressed in a separate agreement (i.e., the listing agreement or a cooperating commission agreement).

[SOURCE: TAR's Legal & Ethics Hot Line Attorneys]

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4. HOT LINE: A Conflict of Interest?

QUESTION: Is it a conflict of interest for the seller’s listing agent to use a remodeling company affiliated with the listing company to do repairs stipulated in the Buyers Contingency Removal Agreement that was signed by all parties?

ANSWER: This is permitted as long as it is FULLY disclosed and does not result in an unlawful kick-back under RESPA. Pursuant to Article 6 of the NAR Code of Ethics,

REALTORS shall not accept any commission, rebate, or profit on expenditures made for their client, without the client’s knowledge and consent. When recommending real estate products or services (e.g., homeowner’s insurance, warranty programs, mortgage financing, title insurance, etc.), REALTORS shall disclose to the client or customer to whom the recommendation is made any financial benefits or fees, other than real estate referral fees, the REALTORS or REALTORS’s firm may receive as a direct result of such recommendation.

Standard of Practice 6-1 states: “REALTORS shall not recommend or suggest to a client or a customer the use of services of another organization or business entity in which they have a direct interest without disclosing such interest at the time of the recommendation or suggestion.”

We would recommend that this is received in writing. Also, if there are concerns about whether this would create problem with the loan, then you need to consult the loan officer.

[SOURCE: TAR's Legal & Ethics Hot Line Attorneys]

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5. BEWARE: Lead Generation Companies

There are surely some good responsible lead-generation companies out there, but we encourage ALL members to thoroughly investigate any companies with whom they may do business. A company may promise delivery of “validated” or “qualified” leads, but they may have their own, very limited definition of “validated” or “qualified” …and you may end up paying a substantial amount of money for bona fide names, addresses, and phone numbers of people who are not really interested in buying or selling!  Without naming names, some of our members have been burned by lead-generation providers.

Investigate before you buy, ask for references from other REALTORS, and talk to other REALTORS about their experiences.

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6. Fewer Than 200 To Go!

As of Monday, June 1, 803 specialty license plates for Tennessee REALTORs have been sold! As soon as 1,000 are sold, they can go into production!

Take pride in your profession and Celebrate Homeownership in Tennessee! For $35, you can put an attractive license plate on your car that tells everyone you help make the American dream a reality for Tennesseans. REALTOR license plates only cost $35 for a standard plate and $70 for a personalized vanity plate with 5 characters.

QUESTION: My license plate renews in September. Should I just wait to order my specialty plate then?

NO. None can be produced and distributed until 1,000 are sold. REALTORS who want a REALTOR license plate must PRE-ORDER them now on-line and they will receive a NEW renewal date and a PRO-RATED renewal amount with their county clerk’s office based on when the plates are shipped. The only cost to the licensee is the COST OF THE PLATE not the full vehicle’s registration.

For more information, go to the NEWSROOM section of the TAR website (at http://www.tarnet.com/main/newsroom/) and scroll down to see the License Plate, and order one online! There you can also access a one-page information sheet with more Frequently Asked Questions about the Plates.

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7. Upcoming TAR Courses & Events!

June 11: TAR Forms 101 (Nashville, TAR Office), 4 hours CE. For more information, go HERE.

June 11: TransactionDesk Basic Course (Nashville, TAR Office), 3 hours CE. For more information, go HERE.

A Special Event for Educators & Instructors: On July 28-29, TREEF will host its Educators Conference 2009, an annual with sessions and workshops for instructors and association staff. For more information, go HERE.

Instructor-Training: On August 27-28. we will hold another offering of our popular two-day instructor-training workshop, “The Learning-Centered Instructor”, at the TAR Office in Nashville, accredited for 16 hours of CE. For more information, go HERE.

Watch each week’s TAR DIGEST for schedule changes and additions!

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8. Rates Rise

Sad but true. Freddie Mac reports that interest on long-term mortgages rose this past week. According to the firm, 30-year fixed loans came in last week at an average rate of 4.91 percent, up from 4.82 percent a week earlier; while 15-year fixed mortgages settled at 4.53 percent compared to 4.5 percent over the same period. Interest also was higher on five-year adjustable-rate mortgages, which bumped up to 4.82 from 4.79; but the one-year ARM slipped down to 4.69 percent from 4.82 percent.

The increases are the byproduct of a big jump in yields on long-term Treasury bonds, which impact the cost of home loans.

[SOURCES: Freddie Mac; Wall Street Journal; Information, Inc.]

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TAR’s Home Page: http://www.tarnet.com

TO SUBSCRIBE to the TAR DIGEST: Simply go to the TAR DIGEST website at www.tardigest.com with your web browser, and look down the left-hand column of that page for “Get News By E-Mail”. Click on that and follow the instructions.

After entering your email address, you will receive an email from the system (confirmations@emailenfuego.net) with a link that you MUST click on, to activate your subscription. Thanks!

CONTENTS
1. Mixed Reports on Tax-Credit Loans
2. “Redefaults” Continue…
3. TAR Education Survey (Please respond!)
4. HOT LINE: Commission Based on Net Selling Price?
5. HOT LINE: A Transfer of Listings?
6. Upcoming Courses & Events!
7. Rates Dropped Last Week

Publication was delayed by one day this week in observance of Memorial Day.

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1. Mixed Reports on Tax-Credit Loans

We reported last week that HUD Secretary Shaun Donovan told the National Association of REALTORS that the First-Time Homebuyers Tax Credit could be “monetized” and used as a down payment under forthcoming HUD guidelines.

Since then, there have been a variety of news reports — some confirming and others denying that this would in fact happen. Some sources have claimed that the government was backing away from this proposal for a variety of reasons. In a May 21 news story, however, NAR reaffirmed the original plan:

*** BEGIN QUOTE ***
News reports that the federal government is backing away from its plan to permit eligible borrowers to monetize the first-time homebuyer tax credit are off the mark, a spokesperson for the U.S. Department of Housing and Urban Development says.

“The technical details are still being finalized and will soon be published in a mortgagee letter and posted on our Web site,” Lemar Wooley, a HUD spokesperson, told REALTOR magazine Wednesday afternoon.

Under the guidance that’s under development, state agencies and other HUD-approved entities would be able to provide short-term bridge loans that households could use to help with their downpayment. The loans would be repaid with the proceeds from the households’ federal tax credit.
*** END QUOTE ***

[SOURCE: REALTOR Magazine Online]

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2. “Redefaults” Continue…

Fitch Ratings is slated to release a report this week showing that 65 percent to 75 percent of modified subprime loans will still fall behind by 60 days or more within one year of the loan change. Although some experts believe that reducing the principal amount owed is the best way to keep distressed borrowers in their homes, Fitch found that 30 percent to 40 percent of loans that had lowered principal amounts were still redefaulting after 12 months. Borrowers are redefaulting at a high rate because home prices continue to fall, unemployment is rising, and because of public pressure to help homeowners — even those who are still likely to default even after receiving assistance.

[SOURCES: Wall Street Journal; Information, Inc.]

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3. TAR Education Survey

The Tennessee Association of REALTORS (TAR) and the Tennessee Real Estate Educational Foundation (TREEF) work together to deliver quality education and educational services to TAR members. We’ve posted a simple, SIX-QUESTION survey to help us deliver those services more effectively. PLEASE take just a couple of minutes to give us your opinions. Thank you in advance for your help!

This TAR Education Survey will close soon, so please respond no later than 12 Noon, on Tuesday, June 2. To take the survey, just go HERE.

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4. HOT LINE: Commission Based on Net Selling Price?

QUESTION: I have a transaction wherein the listing broker is trying to pay my commission based on the sales price minus closing costs. This was not disclosed up front. Is this legal?

ANSWER: The MLS Rules indicate that the commission is to be paid on the gross selling price. See Note 1 to Policy 7.23:

The compensation specified on listings filed with the multiple listing service by the participants of the service shall appear in one of two forms. The essential and appropriate requirement by a multiple listing service is that the information to be published shall clearly inform the participants as to the compensation they will receive in cooperative transactions unless advised otherwise by the listing broker in writing in advance of their producing an offer to purchase. The compensation specified on listings published by the MLS shall be shown in one of the following forms:
1. by showing a percentage of the gross selling price
2. by showing a definite dollar amount (Revised 11/95)

Therefore, the commission is to be paid on the gross sales price (i.e., BEFORE the closing costs are deducted). The only exception to that is:

7.2 (g) In the event that the gross commission established in the listing contract is subject to court approval or lender approval, and may be reduced by a court or by a lender, the fact that the gross commission is subject to court or to lender approval and either the potential reduction in compensation payable to cooperating brokers or the method by which the potential reduction in compensation will be calculated must be clearly communicated to potential cooperating brokers prior to the time they produce an offer that ultimately results in a successful transaction.

You are welcome to file a grievance with the local board for a hearing to determine the entire commission amount owed to you.

[SOURCE: TAR's Legal & Ethics Hot Line Attorneys]

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5. HOT LINE: A Transfer of Listings?

QUESTION: I left another firm and had several listings. My clients had signed withdrawal forms, and I turned those in to my previous broker. The broker said she wouldn’t withdraw them but transfer them and retain a referral fee. My clients have also sent letters to the previous broker asking for the withdrawal. Is the previous broker required to sign these withdrawals?

ANSWER: You should not discuss this issue with the sellers at all. These are clients of your former broker. Therefore, if you are discussing this issue with them, you could be accused of interference with a contract, and such interference is in violation of the Broker’s Act and the NAR Code of Ethics. This could result in a lawsuit, a complaint with TREC and/or a complaint with the local board.

Another important thing to understand is that the listings belong to the firm. The principal broker can transfer them to you, but that is completely up to the principal broker. In addition, the principal does not have to agree to the seller’s request to terminate the listing.

[SOURCE: TAR's Legal & Ethics Hot Line Attorneys]

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6. Upcoming TAR Courses & Events!

June 11: TAR Forms 101 (Nashville, TAR Office), 4 hours CE. For more information, go HERE.

June 11: TransactionDesk Basic Course (Nashville, TAR Office), 3 hours CE. For more information, go HERE.

A Special Event for Educators & Instructors: On July 28-29, TREEF will host its Educators Conference 2009, an annual event with sessions and workshops for instructors and association staff. For more information, go HERE.

Instructor-Training: On August 27-28, we will hold another offering of our popular two-day instructor-training workshop, “The Learning-Centered Instructor”, at the TAR Office in Nashville, accredited for 16 hours of CE. For more information, go HERE.

Watch each week’s TAR DIGEST for schedule changes and additions!

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7. Rates Dropped Last Week

Freddie Mac reports a drop in the 30-year fixed mortgage rate to 4.82 percent during the week ended May 21 from 4.86 percent the prior week, while the 15-year fixed mortgage rate dipped to 4.5 percent. The Federal Reserve is working to hold down rates by purchasing upwards of $1.25 trillion in mortgage-backed securities and $300 billion in Treasuries. Mortgage rate premiums have declined substantially over the last couple of months even as Treasury yields climbed.

[SOURCES: Freddie Mac; Information, Inc.]

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TAR’s Home Page: http://www.tarnet.com

TO SUBSCRIBE to the TAR DIGEST: Simply go to the TAR DIGEST website at www.tardigest.com with your web browser, and look down the left-hand column of that page for “Get News By E-Mail”. Click on that and follow the instructions.

After entering your email address, you will receive an email from the system (confirmations@emailenfuego.net) with a link that you MUST click on, to activate your subscription. Thanks!

CONTENTS
1. FHA Makes Welcome Announcement
2. TAR News!
3. The 2009 NAR Member Profile
4. FRAUD ALERT RE: Craigslist!
5. HOT LINE: A Stolen Client?
6. The Recession & TAR’s Dues
7. Upcoming Courses & Events!
8. Rates Stay Under 5

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1. FHA Makes Welcome Announcement

At last week’s NAR Mid-Year Conference in Washington, HUD Secretary Shaun Donovan, said that the Federal Housing Administration (FHA) is going to permit its lenders to allow home buyers to “monetize” the $8000 tax credit for first-time homebuyers, to be used as a down payment. In his remarks to REALTORS, Secretary Donovan indicated that details of this plan will be released shortly.

[SOURCES: NAR et al.]

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2. TAR News!

Committee Request Forms Are Online: In the Members Only section of the TAR website, there is a new page titled “Officer & Committee Forms” – see the link in the left-hand menu – with the Request Form that you can use to request appointment to a 2010 TAR Committee, as well as nomination forms for TAR Officer positions and TREEF Trustee positions.

A Special Event for Educators & Instructors: On July 28-29, TREEF will host its Educators Conference 2009, an annual with sessions and workshops for instructors, education volunteers, and association staff. For more information, go HERE. You can also download a brochure in PDF form by clicking HERE.

Instructor-Training: On August 27-28. we will hold another offering of our popular two-day instructor-training workshop, “The Learning-Centered Instructor”, at the TAR Office in Nashville. For more information, go HERE.

FIVE NAR Designation Courses Are Online: The ABR and ABRM course, as well as a CIPS course and two others, are now available online through REALTOR University and are CE-accredited in Tennessee! For more information, or to enroll, go to the TAR Education Information page of the TAR website at http://www.tarnet.com/main/education_information/ and scroll down to “REALTOR University Online Courses.”

[SOURCE: TAR]

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3. The 2009 NAR Member Profile

The National Association of REALTORS (NAR) has published its 2009 NAR Member Profile. As part of its “Right Tools, Right Now” campaign, this 84-page report is available to all NAR members for FREE, as a PDF download! You still have to go through the online REALTOR Store process, as though you were purchasing it, but it really is FREE.

A few highlights:

• Median gross income of REALTORS fell 14 percent to $36,700 in 2008, a rate consistent with the decline in prices and transaction volume over the past year.
• The profile of the typical REALTOR has changed only slightly in the past year. The median age of REALTORS rose to 54 from 52, however, reflecting the difficultly many younger, less experienced entrants face when working to earn sufficient income to remain in the real estate business.
• REALTORS continue to embrace new technology, the latest being social networking; 35 percent indicated that they used one or more social networking web sites on a regular basis.
• The typical REALTOR has 10 years experience.

To read more, get the Report at REALTOR.ORG, or see NAR’s press release summary of the Report HERE.

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4. FRAUD ALERT RE: Craigslist!

Within the past seven days, we’ve received notices of two different, but similar, instances of attempted fraud using Tennessee listings and Craigslist. There is a very good chance these two cases are not isolated incidents!

In both cases that came to our attention (one from Hendersonville and one from Clarksville), properties that had been listed by Tennessee REALTORS showed up – without the listing agent’s knowledge – as rental properties on Craigslist, with an email address to contact for information …although the email address is a fake Yahoo or Gmail address using the actual listing agent’s name as part of the address! The party behind the scam poses, via email, as the listing agent and attempts to collect the first month’s rent and a deposit by email or overnight delivery.

Both Craigslist and (in one of these cases) the FBI have been notified of the scam. In the meantime, it would probably be wise for each firm to scan the rental property listings on Craigslist for their area, just to ensure that none of your listings are being misrepresented.

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5. HOT LINE: A Stolen Client?

QUESTION: On or about the first of April 2009, Agent X in my office began working with a potential home buyer. This “buyer customer” signed a Buyers Representation Agreement (exclusive right to buy). This buyer client then made an offer on a home and subsequent to two counteroffers contracted on said home. A short time later, we were notified by the bank there was an issue with the appraisal, and the transaction fell through. Agent X continued to search for properties for this buyer-client, but no properties were found in her price range. Daily contact with the buyer client was and has been maintained.

Recently, while still under contract as a client, the prospective buyer notified Agent X that she had been approached by a friend of hers about buying her home which was listed on the MLS by her mother, a licensed principal broker. Buyer client told her friend that the property was priced out of her range. The listing broker (owner’s mother) contacted our buyer client directly and told her if the home was purchased using her she could cut the commission to make the deal work. The buyer client has told me she advised the listing agent she had been working with an agent (Agent X) but was told again she could cut the commission if the listing broker wrote the offer to purchase. The buyer client told me she did sign a contract to purchase along with a personal interest disclosure stating the listing agent was related to the seller.

ANSWER: If the listing agent knew that the buyer was subject to an agency agreement, then there is definitely a problem! A licensee can be disciplined for “Inducing any party to a contract, sale or lease to break such contract for the purpose of substitution in lieu thereof a new contract, where such substitution is malicious or is motivated by the personal gain of the licensee.” Tenn. Code Ann. 62-13-312(b)(10). You can file a complaint with TREC against this broker for convincing the buyer to work directly with her rather than through the agent with whom the buyer had an agency relationship.

In our opinion, it may also violate the NAR Code of Ethics. If the listing agent is a REALTOR, you could file a complaint with the local association for interference with a contract pursuant to Article 16 of the NAR Code of Ethics which states “REALTORS shall not engage in any practice or take any action inconsistent with exclusive representation agreements that other REALTORS have with clients.”

In addition, you could also potentially have a civil lawsuit if the agent received a fee for this transaction based upon her working with the buyer. We would recommend that you speak with an attorney in your area to determine whether you have a strong interference with a contract case.

[SOURCE: TAR's Legal & Ethics Hot Line Attorneys]

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6. The Recession & TAR’s Dues

The recession has taken a painful toll on all of TAR’s members, member firms, and our local and state associations. In response, TAR has reduced its budget significantly in a number of areas. Also, in March, the TAR Board of Directors approved a $20 dues assessment for 2010 to ensure that basic services are continued. This action generated a number of questions regarding TAR’s dues structure, the reasoning behind this assessment, and the earmarked increase for Issues Mobilization that was approved a year earlier.

TAR’s 2009 President Fontaine Taylor has addressed all of those questions in a letter to members explaining the assessment and related issues. That letter may now be read and/or downloaded (it’s in PDF format) at the NEWSROOM section of the TAR website: http://www.tarnet.com/main/newsroom/

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7. Upcoming TAR Courses & Events!

May 21-22: GRI 3 – Financing the Successful Transaction (Memphis), 16 hours CE. For more information, go HERE.

FREE – May 18-29: Referral Expo 2009 an online educational opportunity featuring several national speakers, to help you build or REbuild your business! To learn more and register, go HERE.

June 11: TAR Forms 101 (Nashville, TAR Office), 4 hours CE. For more information, go HERE.

June 11: TransactionDesk Basic Course (Nashville, TAR Office), 3 hours CE. For more information, go HERE.

Watch each week’s TAR DIGEST for schedule changes and additions!

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8. Rates Stay Under 5

Freddie Mac reports a slight rise in the 30-year fixed mortgage rate to 4.86 percent during the week ended May 14 from 4.84 percent the previous week, and the 15-year fixed mortgage rate climbed to 4.52 percent from 4.51 percent. Meanwhile, the five-year adjustable mortgage rate slipped to 4.82 percent from 4.9 percent; and the one-year ARM fell to 4.71 percent from 4.78 percent.

[SOURCES: Freddie Mac; Information, Inc.]

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TAR’s Home Page: http://www.tarnet.com

TO SUBSCRIBE to the TAR DIGEST: Simply go to the TAR DIGEST website at www.tardigest.com with your web browser, and look down the left-hand column of that page for “Get News By E-Mail”. Click on that and follow the instructions.

After entering your email address, you will receive an email from the system (confirmations@emailenfuego.net) with a link that you MUST click on, to activate your subscription. Thanks!

CONTENTS
1. The Turning of the Tide
2. HOT LINE: Referral Fee When License Is Retired?
3. HOT LINE: Contacting the Owner of a Listed Property?
4. Where ARE You?
5. WORKING SMARTER: Cultivating & Generating Referrals
6. UPCOMING COURSES & EVENTS
7. REALTOR License Plate Update!
8. Rates Inch Upward

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1. The Turning of the Tide

A couple of weeks ago, we referenced a cautiously optimistic outlook on the economy (”Is the End in Sight?”) by NAR’s former Chief Economist John Tuccillo. At the end of last week, John sounded even more positive: “…Real estate professionals who are in this for the long haul are back in business in a big way. All in all, the late summer beginning of the recovery appears to be right on track.”

To read more, go HERE.

[SOURCE: RealBlogging.com]

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2. HOT LINE: Referral Fee When License Is Retired?

QUESTION: Can an agent who has retired their license be paid a referral fee?

ANSWER: It will depend upon whether the agent’s license was active when the property came under contract. An agent is deemed to earn their commission or referral fee when the contract is signed. Therefore, even if their license is inactive or in retirement when the property closes, they will still get their commission.

HOWEVER, if the agent’s license was not active when the property went under contract, then that agent cannot be paid the commission or referral fee. Furthermore, whether the agent is entitled to a commission or referral fee will depend upon the terms of their independent contractor’s agreement.

[SOURCE: TAR's Legal & Ethics Hot Line Attorneys]

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3. HOT LINE: Contacting the Owner of a Listed Property?

QUESTION: Under Tennessee law, can you contact a person who already has their house listed?

ANSWER: This will depend upon the reason for contacting that seller. If you know that the person has already listed their property and are trying to solicit the listing away from another agent, this is NOT permitted. It would be in violation of BOTH Tennessee law AND the NAR Code of Ethics. Any communication with that seller should be done through the agent with whom they have an exclusive listing.

If a seller contacts you directly to try and break their listing with someone else, you should advise them that you cannot assist them while they are under contract with another agent.

[SOURCE: TAR's Legal & Ethics Hot Line Attorneys]

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4. Where ARE You?

At last week’s meeting of the Tennessee Real Estate Commission (TREC) in Memphis, the Commission staff noted the State of Tennessee does not forward their mail. If an agent has a new address and has not changed it with TREC, then their mail from the Real Estate Commission ends up in someone else’s waste basket.

PLEASE make sure that you change your mailing address with the Real Estate Commission and keep it current!

You can always check much of the information that TREC has on file for you — including the CE credits you’ve earned — by searching for your own license record at:
http://licsrch.state.tn.us/

Any email from your State and National Associations of REALTORS may also get lost — or never delivered — IF you do not keep your local association advised when you change email addresses …so they can update your NRDS record!

[SOURCES: TREC; TAR]

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5. WORKING SMARTER: Cultivating & Generating Referrals

In the first news item above, John Tuccillo referred to “professionals who are in this for the long haul”. If you’re truly in business for the long haul, then you need a steady stream of referrals to keep your business growing and on track! A new article by trainer Dirk Zeller (“Three Golden Rules For Cultivating Referrals”) covers the steps needed for building a and maintaining a referral-based business. It will be a refresher course for many …but who couldn’t use a refresher every now and then?

To read what Dirk has to say, go HERE.

[SOURCE: RealtyTimes]

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6. UPCOMING COURSES & EVENTS

May 12: TAR Forms 101 (TAR Office, Nashville), 4 hours CE. For more information, go HERE.

May 13: TransactionDesk Basic Course (TAR Office, Nashville), 3 hours CE. For more information, go HERE.

May 21-22: GRI 3 – Financing the Successful Transaction (Memphis), 16 hours CE. For more information, go HERE.

FREE – May 18-29: Referral Expo 2009 an online educational opportunity featuring several national speakers, to help you build or REbuild your business! To learn more and register, go HERE.

Watch each week’s TAR DIGEST for schedule changes and additions!

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7. REALTOR License Plate Update!

As of Monday, May 11, 752 members have purchased the new REALTOR License Plate! That means only 248 more plates need to be purchased before they can go into production! The plates are an attractive way to support your profession and “Celebrate Homeownership!” We’re three-quarters of the way to our goal!

For more information, go to the NEWSROOM section of the TAR website (at http://www.tarnet.com/main/newsroom/) and scroll down to see the License Plate, and order one online! There you can also access a one-page information sheet with more Frequently Asked Questions about the Plates.

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8. Rates Inch Upward

Freddie Mac reports a jump in the 30-year fixed mortgage rate to 4.84 percent during the week ended May 7 from 4.78 percent the previous week, which matched the record low. Meanwhile, average interest on 15-year fixed loans climbed to 4.51 percent from 4.48 percent. Low borrowing costs have energized the refinance market, which now accounts for about three-quarters of new home-loan requests.

[SOURCES: Information, Inc.; Freddie Mac]

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TAR’s Home Page: http://www.tarnet.com

TO SUBSCRIBE to the TAR DIGEST: Simply go to the TAR DIGEST website at www.tardigest.com with your web browser, and look down the left-hand column of that page for “Get News By E-Mail”. Click on that and follow the instructions.

After entering your email address, you will receive an email from the system (confirmations@emailenfuego.net) with a link that you MUST click on, to activate your subscription. Thanks!