The TAR Digest: The Membership Newsletter of the Tennessee Association of Realtors
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  Printer Friendly Version Printer Friendly Version 10-21-08 TAR DIGEST
Posted by Pug

The Weekly Membership Newsletter of the Tennessee Assn. of REALTORS
Editor: Pug Scoville


CONTENTS
1. Surviving & Thriving in a Slowing Market
2. HOT LINE: Refusal To Disclose Property Condition?
3. HOT LINE: Agent Payment of Closing Costs?
4. HOT LINE FOLLOW-UP: Falsifying Deed Info
5. WORKING SMARTER: The Myth of Multitasking
6. Rates Jump Significantly
7. UPCOMING EVENTS


1. Surviving & Thriving in a Slowing Market

“The U.S. has entered a recession,” said the National Association of REALTORS’ Chief Economist Lawrence Yun in his latest forecast, “and (the economy) will contract for the next three quarters.”

Our current market is certainly a challenge for many, if not most! When a hot housing market has cooled down, REALTORS, as well as their seller and buyer clients, ALL need to readjust their strategies and expectations. To address this need, the National Association of REALTORS (NAR) has created a new Field Guide to Surviving & Thriving in a Slowing Market — a TRULY impressive collection of articles, resources, and tips to help you navigate a sluggish market successfully!

This free, online Field Guide is posted on REALTOR.ORG, and you can find it HERE.

[SOURCE: NAR]


2. HOT LINE: Refusal To Disclose Property Condition?

QUESTION: I am a buyer’s agent and I’m currently dealing with a FSBO, but the seller will not complete the Property Condition Disclosure. What do I do about this?

ANSWER: All that you as an agent can do is to advise the seller of his responsibility under the Tennessee Residential Property Disclosure Act. If he fails to comply with the terms of the act, then he may be subject to a lawsuit from a buyer for failure to disclose information pursuant to the act. You should document all conversations with both the seller and buyer in the event that a later lawsuit develops. You may advise the client to seek the advice of an attorney if he or she wishes to pursue a lawsuit.

If there is not a binding contract in place, then the buyers can obviously refuse to purchase the house.

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


3. HOT LINE: Agent Payment of Closing Costs?

QUESTION: To make a transaction work, can the agent pay part or all of the closing costs in a transaction?

ANSWER: NO. An agent in Tennessee cannot offer to pay closing costs for this transaction. The Legislature recently passed a new law which states:

“A real estate licensee shall not give or pay cash rebates, cash gifts or cash prizes in conjunction with any real estate transaction.  As part of the Tennessee Real Estate Commission’s general rulemaking authority the commission may regulate the practices of real estate licensees in regard to gifts, prizes or rebates that are not otherwise prohibited by law.” Tenn. Code Ann. 62-13-302(b)

TREC has interpreted this to mean that agents are no longer permitted to pay closing costs for buyers or sellers.

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


4. HOT LINE FOLLOW-UP: Falsifying Deed Info

From our Hot Line attorneys…

Last week, the TAR DIGEST published a Question and Answer to the effect that falsifying information (i.e., the property selling price) on a deed would constitute fraud.

Several members emailed, questioning this response.  One example of the comments:

*** BEGIN QUOTE ***
The affidavit that is signed on the deed states “I or we hereby swear or affirm that the actual consideration for the transfer or value of the property of interest in the property transfer, whichever is greater, is $_______________, which amount is equal to or greater than the amount which the property or interest in property would command at a fair and voluntary sale.”

Based on the way it reads, if the value actually is $145,000 and it is a true discount to $120,000, it would be fraud not to put $145,000 in the blank.
*** END QUOTE ***

We stand by our original answer. To clarify the answer, you are somewhat correct. By statute for TAXATION purposes, the affiant is required to state the consideration for the transfer (the sales price) or the value of the property, whichever is greater.

However, the statute on the Recordation Tax states that the value of the property is defined as the “amount that the property transferred would command at a fair and voluntary sale, and no other value.” The $120,000 (the actual sales price) meets this definition. This is the amount that the property commanded at a fair and voluntary sale. The seller chose to sell the property for $120,000. If he could have sold it for $145,000 at that particular time, he would have.

This point is clarified in an Attorney General’s Opinion (Opinion No.91-06) issued on January 16, 1991.  In that opinion it states:

“Normally, the value of the property is equal to the consideration paid. Only in the rare situation where the transfer is not a fair and voluntary sale, as, for example, in some transactions between family members, is the actual consideration paid not the proper measure of the tax. In such rare circumstances, the property should be valued at an amount which it would command at a fair and voluntary sale.”

It goes on to address the very scenario posed in the Hot Line question – “…where developers sell the first few lots in a development below their market value to attract buyers, the developers may request that the market value be used in the valuation affidavit for tax purposes.” The Attorney General responds by stating “In the discounted price situation, if the transaction is a fair and voluntary sale, then the value of the property is the consideration paid. The value cannot be based on a price that the seller would have charged if he had not discounted the price to build sales momentum. The price that was actually paid was the amount paid in a fair and voluntary sale.  It must be the value because the seller might not have been able to command the higher price at a fair and voluntary sale.”

As you can see, the price reflected on the deed should be the ACTUAL sales price in this situation, not what the other lots are selling for in the neighborhood.

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


5. WORKING SMARTER: The Myth of Multitasking

You may realize this injutuitively, but multitasking IS a myth. A new book by Dave Crenshaw, The Myth of Multitasking: How “Doing It All” Gets Nothing Done, explains this and reportedly offers some very practical advice.

A very positive review of the book on the GTD Times website, points out:

*** BEGIN QUOTE ***
Humans simply cannot do two things that both require concentration at the same time.  We may think we can but in reality we’re “switch-tasking”, not multitasking.

The problem with this, as Dave explains in his book, is that each time we switch from one task to another we lose valuable time. This is because we have to reset of mental processes to deal with the changing task and we have to figure out just where we were before we get started again.
*** END QUOTE ***

This review also includes a link to a free online self-assessment on your own “multitasking” behavior.

To read the full review, go HERE.

To order the book, go HERE.

[SOURCE: GTDTimes.com]

_____________________________________________________
6. Rates Jump Significantly

Freddie Mac reports that the 30-year fixed mortgage rate rose to 6.46 percent during the week ended Oct. 16 from 5.94 percent the prior week, marking an eight-week high. The 15-year fixed mortgage rate climbed to 6.14 percent from 5.63 percent over the same period. The report indicates that lenders remain skittish, and more borrowers will find it difficult to secure financing.

This was reportedly the single largest one-week jump in rates in 21 years!

[SOURCES: Information, Inc.; Freddie Mac]


7. UPCOMING EVENTS

Oct. 28-29: GRI 2 – Smart Marketing (Knoxville)

Nov. 5-10: NAR Convention (Orlando, FL)

Nov. 13-14: GRI 5 – Systems for Success (Nashville, Cool Springs area)

Nov. 17-18: GRI 4 – From Offer To Contract To Closing (Chattanooga)

Nov. 19-20: GRI 6 – Sticky Situations (Memphis)


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!

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


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