CONTENTS
1. Need Motivation? Read This…
2. Social Media Usage and Risks
3. Credit Scores Slip Across U.S.
4. Last Week for Early-Bird Rates!
5. HOT LINE: Removing Spouse from Contract?
6. HOT LINE: Which Items Stay with the Property?
7. GRI and Other Courses
8. Rates Hit New Record Lows, Again!

To ask a TAR Legal and Ethics Hot Line question, CLICK HERE.

For other questions about this newsletter, please use the “CONTACT” form HERE.

Follow TAR on Twitter!

…And see TAR’s page on Facebook!

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1. Need Motivation? Read This…

Every now and then, an article captures my attention with a wake-up call and a good motivational message in the midst of otherwise depressing news!

This past week, a blog posting by speaker Denise Lones “hit the spot”!  Her article (“You Make the Market – The Market Doesn’t Make You!”) contains good advice, and steps to take, for agents who refuse to let the market determine their attitude or their success:

*** BEGIN QUOTE ***
When I managed a large real estate office, I learned a powerful lesson. Sitting at my desk one day, it suddenly hit me. It was a revelation.

The revelation was this: I make my own market. No matter how dire the news.  No matter how “downward trending” the statistics may be. No matter what anyone else says.  My market is the one I create for myself.
*** END QUOTE ***

To read her entire posting, CLICK HERE.

[SOURCE: BrokerAgentSocial.com]

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2. Social Media Usage and Risks

Last week, Facebook announced that it had reached a major milestone: there are now 500 MILLION users on Facebook! In a recent TAR survey, Facebook was also – by far – the most popular social media platform among our REALTOR members.

A new article by Jim Crawford on Realty Times, however, emphasizes the need for brokers to establish policies on social media use by the agents for whom they are legally responsible! The article — “Public Social Media Policy: Does Your Office Have One?”

*** BEGIN QUOTE ***’
Be careful what you say is sage advice for anyone, and even more so in what you Blog or comment about online. The recent story of a real estate Blogger and his broker being sued by a developer should’ve reached the ears of many in our industry, but I am sure it hasn’t. It should be viewed as a wake up call that we will be held accountable for what is placed online either by ourselves or our agents. Agents need to understand the basics of what we can or cannot put into writing, and then share it with the world. If they do not, they may find themselves in a similar uncomfortable life changing legal event.
*** END QUOTE ***

Since Mr. Crawford’s admonition that “Brokers are charged by the state to review all advertising of their agents and are responsible for their agents’ actions” is very true for Tennessee, his warnings are timely!

To read the entire article, CLICK HERE.

[SOURCE: Realty Times]

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3. Credit Scores Slip Across U.S.

FICO data show that more than a quarter of consumers have a credit score of 599 or below, making them a poor risk to lenders and likely unable to get mortgages under tougher bank criteria. The analysis also shows that 17.9 percent of consumers have a top score of 800 or above, up from the historical average of 13 percent; and that the ranks of those with moderate credit – scores between 650 and 699 – has fallen from the historical average of 15 percent to 11.9 percent.

[SOURCES: Information, Inc.; Detroit News]

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4. Last Week for Early-Bird Rates!

This is your last week to register at Early-Bird Registration Rates for the TAR Convention in September. The deadline is THIS FRIDAY, JULY 30, so ACT NOW and save $80! Those registering by July 30 will ALSO be entered in a drawing for a FREE iPad!

The 2010 Annual Convention of the Tennessee Association of REALTORS – slated for September 15-17 in Memphis – features a star-studded array of national speakers this year, to help TAR members recharge and rebuild their businesses in a troubled economy:

• Entertainer and guitar virtuoso Mike Rayburn
• Famed entrepreneur David Oreck
• Tech guru Brian Copeland
• National CRB President John Mayfield
• Popular NAR instructor Tony Macaluso
• National consultant and speaker Mike Staver
• CRS instructor Pam Ermen
• National safety expert Andrew Wooten

It’s a program you don’t want to miss. And Memphis offers a wealth of things to do and see while you’re there!

For more information and/or to register online, go to:
http://www.tarnet.com/main/conferences_and_conventions/

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5. HOT LINE: Removing Spouse from Contract?

QUESTION: A married couple made an offer to purchase (and was accepted), however, the husband’s bad credit prevented the bank from granting the loan. Can the husband be removed from the purchase contract to allow the wife to continue as the buyer on her acceptable credit status alone? What would be the legal procedure to remove him from a contract and move forward to closing?

ANSWER: Any change to a contract would require an amendment. If the parties and the lender agree to remove the husband from the transaction, then you can draft an amendment to the contract removing the husband as a purchaser of the property. You would need to have all the parties to the original contract (including the husband) sign this amendment. F6 is a TAR form which you can use for the amendment.

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]

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6. HOT LINE: Which Items Stay with the Property?

QUESTION: If an agent submits an offer on a property and the MLS states certain things are included with the property at the listed price and an offer comes in at a price below the asking price, which items stay with the property?

ANSWER: The Hot Line cannot determine who is entitled to certain items in a particular sale. However, in order to avoid issues after the contract has been executed, we ALWAYS advise agents to make sure that any desired appliances and/or personal items are included in the real estate contract (such as refrigerators, washer/dryers, dishwashers, microwaves, flat screen tvs, water filters, pool tables, etc.). In addition, if you represent the sellers and you do not want to include something specific, make sure that you put that in the contract as well.

We also recommend that you NOT attach the MLS sheet as part of the contract. This is a very dangerous practice in that it makes everything in the MLS sheet binding (such as square footage, acreage, etc.) – items that are often in dispute and the causes of lawsuits.

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]

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7. GRI and Other Courses

July 29: Agency In Tennessee Course (4 hrs. CE) – Chattanooga. For more information or to register, call 423-698-8001.

Aug. 2: TransactionDesk Advanced Course (3 hrs. CE) – Chattanooga. For more information or to register, call 423-698-8001.

Aug. 4: 2009-2010 Core CE Course (4 hrs. CE) – Clarksville. For more information or to register go to: http://armscar.realtracs.com/memberaccess/

Aug. 5 – Sept. 8: E-Class GRI 2, Smart Marketing – Your Listings & Your Services (16 hrs. CE) – a distance learning course. For more information or to register, CLICK HERE.

Aug. 6: 2009-2010 Core CE Course (4 hrs. CE) – Chattanooga. For more information or to register, call 423-698-8001.

CLICK HERE for the complete 2010 schedule of Classroom and E-Class GRI Courses!

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

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8. Rates Hit New Record Lows, Again!

Long-term mortgage borrowing costs continued in a downward pattern this past week, according to the Mortgage Bankers Association, which reported new lows in the 30- and 15-year rates. Average interest on the former dropped to 4.56 percent from 4.57 percent the previous week, while interest on the latter averaged 4.03 percent compared to 4.06 percent a week earlier. Also hitting a new low was the one-year adjustable-rate mortgage, which slipped to 3.7 percent from 3.74 percent the prior  week. The five-year ARM, meanwhile, was down to 3.79 percent from 3.85 percent week over week.

Freddie Mac chief economist Frank Nothaft said the slide in rates over the past few weeks “echoes the recent signs of weakening confidence in the strength of the economy, particularly the housing and consumer sectors.”

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

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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. Real Estate Scam Hits Memphis Market
2. PMI Revises Forecast, Downward
3. National Speakers Featured at TAR Convention!
4. HOT LINE: Asking for a Higher Commission?
5. HOT LINE: Shedding a Problem Buyer?
6. TECH TIP: See What NAR Has For You…
7. GRI and Other Courses
8. Rates Remain at Record LOW Levels

To ask a TAR Legal and Ethics Hot Line question, CLICK HERE.

For other questions about this newsletter, please use the “CONTACT” form HERE.

Follow TAR on Twitter!

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1. Real Estate Scam Hits Memphis Market

The National Association of REALTORS (NAR) has issued a fraud warning about a real estate scheme involving an alleged out-of-market buyer offering to buy a property, sight unseen.  You can download a PDF of the NAR warning by CLICKING HERE.

BRIEFLY, HOW IT WORKS
The buyer provides a large earnest money check and a down payment check towards an all cash purchase. The funds ultimately are proved to be insufficient; however, if successful in the scam, the buyer walks away with money as refunded to him by the entity holding the earnest money and down payment.

Recently, the Memphis Area Association of REALTORS (MAAR) has become aware of at least three such incidences in the Memphis area. NAR’s alert (see above) includes more details of how the scam works. If you suspect you are a victim of this scheme, you should not proceed any further with the transaction without verifying the validity of the check(s) received and contacting the nearest FBI Field Office who may direct you to file an Internet Crime Complaint at: http://www.ic3.gov

Our thanks to Carol Culpepper for passing this along!

[SOURCES: MAAR; NAR]

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2. PMI Revises Forecast, Downward

Mortgage insurance company PMI has lowered its national outlook for new- and existing-home sales by more than 50 percent despite continued low interest rates. The mortgage insurer previously had predicted that resales would rise 6.1 percent but has downgraded that forecast to a more modest 2.9 percent to 5.31 million units. It also has revised its growth forecast for new-home sales from an earlier 16.6 percent down to 9.4 percent.

[SOURCES: Star Global Tribune; Information, Inc.]

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3. National Speakers Featured at TAR Convention!

The 2010 Annual Convention of the Tennessee Association of REALTORS – slated for September 15-17 in Memphis – features a star-studded array of national speakers this year, to help TAR members recharge and rebuild their businesses in a troubled economy!

Tennessee regularly features more national speakers at its Convention than any other state in our region!

This year, for the first time ever, the Convention boasts TWO outstanding Keynote speakers: entertainer and guitar virtuoso Mike Rayburn, and famed entrepreneur David Oreck! Following that opening, we have education sessions by tech gurus Brian Copeland and (national CRB President) John Mayfield. Popular NAR instructor Tony Macaluso will provide an intro to international real estate. National consultant and speaker Mike Staver will help you create the key to success – a better customer experience, and CRS instructor Pam Ermen will teach you how to read the “signs of the times”! Finally, national safety expert Andrew Wooten will help everyone learn how to navigate the safety risks in real estate!

It’s a program you don’t want to miss. And Memphis offers a wealth of things to do and see while you’re there!

The Early-Bird Registration Rates end on July 30, so ACT NOW and save $80! For more information and/or to register online, CLICK HERE.

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4. HOT LINE: Asking for a Higher Commission?

QUESTION: I represent a buyer in a transaction. My buyer requested that I be paid a greater commission than the amount that the listing broker originally offered to cooperating brokers. The listing agent is stating that it is illegal to ask for a certain commission and include such in the contract. Is it illegal for a buyer to request that their buyer’s rep be paid a certain commission on a contract and state such within the contract?

ANSWER: Offers of compensation are established and/or negotiated before an offer is submitted. There are several Standards of Practice that address this issue.

Standard of Practice 3-1 states:

REALTORS, acting as exclusive agents or brokers of sellers/landlords, establish the terms and conditions of offers to cooperate.  Unless expressly indicated in offers to cooperate, cooperating brokers may not assume that the offer of cooperation includes an offer of compensation.  Terms of compensation, if any, shall be ascertained by cooperating brokers before beginning efforts to accept the offer of cooperation.

Standard of Practice 3-2 states:

To be effective, any change in compensation offered for cooperative services must be communicated to the other REALTOR prior to the time that REALTOR submits an offer to purchase/lease the property.

Standard of Practice 3-3 states:

Standard of Practice 3-2 does not preclude the listing broker and cooperating broker from entering into an agreement to change cooperative compensation.

Standard of Practice 16-16 states:

REALTORS, acting as subagents or buyer/tenant representatives or brokers, shall not use the terms of an offer to purchase/lease to attempt to modify the listing broker’s offer of compensation to subagents or buyer/tenant representatives or brokers nor make the submission of an executed offer to purchase/lease contingent on the listing broker’s agreement to modify the offer of compensation.

Under NO circumstances should a deal be held hostage due to a commission dispute between agents!

Based upon the above, any change in compensation to the buyer’s firm which is paid based upon cooperative compensation paid by the seller’s firm should be negotiated separately and before an offer to purchase is made.  Furthermore, the agents and the firms are NOT parties to the purchase and sale agreement, so the commission should not be addressed there. It should be in a separate agreement involving the two firms. It could be difficult to enforce otherwise.

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]

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5. HOT LINE: Shedding a Problem Buyer?

QUESTION: I have a buyer’s rep agreement that I want to get out of. I have asked the buyer to sign the TAR release form. If the buyer signs this form, will it release me from any further liability or responsibility with regard to this specific buyer?

ANSWER: Please remember that the Listing/Agency Mutual Release Agreement only releases the agent and the client from the obligations of the contract from that date forward.  Obviously, there may be some carry-over provisions provided for in the release itself. However, this does NOT remove any sort of liability or responsibility of the agent for their actions prior to the release date.

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]

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6. TECH TIP: See What NAR Has For You…

The Center for REALTOR Technology (CRT) is a department within the National Association of REALTORS (NAR). CRT strives to provide REALTOR members with information to assist in their day-to-day business.

Recently, CRT released new (FREE!) tools for REALTORS and REALTOR Staff, and you might find something useful there!

Current resources include an iPhone app, a listings Flash display application, an app that helps define neighborhood boundaries on maps, RETS resources, and more. Take a moment to look through these resources at: http://www.crt.realtors.org/cms/projects

[SOURCE: NAR]

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7. GRI and Other Courses

July 22: Homeownership Options for TN Workforce (6 hrs. CE) – Jackson. For more information contact the Central West TN Association of REALTORS at: monica@cwtar.com

July 22: TransactionDesk Basic Course (3 hrs. CE) – Chattanooga. For more information or to register, call 423-698-8001.

July 29: Agency In Tennessee Course (4 hrs. CE) – Chattanooga. For more information or to register, call 423-698-8001.

Aug. 2: TransactionDesk Advanced Course (3 hrs. CE) – Chattanooga. For more information or to register, call 423-698-8001.

Aug. 4: 2009-2010 Core CE Course (4 hrs. CE) – Clarksville. For more information or to register go to: http://armscar.realtracs.com/memberaccess/

Aug. 5 – Sept. 8: E-Class GRI 2, Smart Marketing – Your Listings & Your Services (16 hrs. CE) – a distance learning course. For more information or to register, CLICK HERE.

Aug. 6: 2009-2010 Core CE Course (4 hrs. CE) – Chattanooga. For more information or to register, call 423-698-8001.

CLICK HERE for the complete 2010 schedule of Classroom and E-Class GRI Courses!

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

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8. Rates Remain at Record LOW Levels

Borrowing costs on mortgages remained mostly flat in the past week, sticking at or near the previous week’s record lows, reports Freddie Mac. Average interest on 30-year fixed loans were unchanged at 4.57 percent, while the rate on 15-year loans dipped even further to a new bottom of 4.06 percent from 4.07 percent the previous week. Five-year adjustable-rate mortgages bumped up from a low of 3.75 percent the prior week to 3.85 percent on July 15. One-year ARMs, meanwhile, dropped to their lowest level since Freddie Mac began tracking the statistic. The rate settled at 3.74 percent, down a notch from 3.75 percent a week earlier.

[SOURCES: Freddie Mac; Information, Inc.]

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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. Fannie Mae’s Loan Quality Initiative
2. Enforcement of New Lead Paint Rule Delayed
3. Giving Credit Where It’s NOT Due…
4. HOT LINE: Can the Buyer’s Agent Pay?
5. HOT LINE: Responsibility for Earnest Money?
6. 2011 TAR Committee Requests
7. GRI and Other Courses
8. Rates Hit a New All-Time Low
9. The TAR DIGEST Takes a Break!

NOTE: No DIGEST next week or the week after that!

To ask a TAR Legal and Ethics Hot Line question, CLICK HERE.

For other questions about this newsletter, please use the “CONTACT” form HERE.

Follow TAR on Twitter!

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1. Fannie Mae’s Loan Quality Initiative

As pointed out in a recent Realty Times article by Bob Hunt: “Buyers and their agents need to be aware that it is a very bad idea for buyers to increase their credit balances or to open new lines of credit shortly before they close escrow on their new home. More specifically, they should avoid such activity during the period of time between loan application and closing. This is because policies under Fannie Mae’s Loan Quality Initiative, effective June 1, 2010, requires lenders to ‘refresh’ a borrower’s credit report just prior to closing.”

This is already causing problems, frustrating closings, etc., so counseling your buyers properly is a must!

To access Bob Hunt’s complete article, CLICK HERE.

To access the actual Fannie Mae guidelines (as a PDF download), CLICK HERE.

[SOURCES: Realty Times; Fannie Mae]

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2. Enforcement of New Lead Paint Rule Delayed

On June 21, the U.S. Environmental Protection Agency (EPA) announced that it will delay enforcement of the new lead paint rule until Oct. 1. The rule requires home-improvement contractors to employ “lead-safe” practices in houses, day care centers, and schools built prior to the lead paint ban in 1978.

The agency made the decision amid complaints from lawmakers and industry groups that contractors could not meet an April deadline for training due to a lack of trainers. To give firms plenty of time to file paperwork indicating that they have implemented lead-safe practices and allow contractors to finish the training courses, the EPA requires contractors to sign up for training by Sept. 30 and complete training by Dec. 31.

To access complete information about the new rule itself, CLICK HERE.

[SOURCES: Associated Press; Information, Inc.; EPA]

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3. Giving Credit Where It’s NOT Due …

Thousands of tax filers – including some serving time behind bars — have bilked the federal government out of billions of dollars in home buyer tax credits, according to Treasury Inspector General for Tax Administration J. Russell George. His report determined that 1,295 prisoners – including 241 lifers – received $9.1 million in credits despite being locked up during the time that they reported purchasing a home. Additionally, $17.6 million went to 2,555 people who bought their homes outside of the target dates; and 10,282 taxpayers received credits for properties that were also listed by other individuals to claim the tax break. “This is very troubling,” George stated.

“Troubling” is an understatement…

[SOURCES: USA Today; Information, Inc.]

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4. HOT LINE: Can the Buyer’s Agent Pay?

QUESTION: I have an agent who represents the seller. The buyer’s lender has an FHA requirement that the water heater pipes be lowered by three inches. It will cost $75 to complete this per the buyer’s lender FHA guidelines. Can my listing agent ask for the buyer’s agent to pay for half of that cost?

ANSWER: The Tennessee Real Estate Commission (TREC) will not allow agents to pay closing costs on behalf of either the buyer and the seller. Therefore, if this cost is NOT a closing cost and it is permissible to the lender for the agents to pay for the costs, then it is OK.

The agents, however, would have to pay the third party contractor directly. They CANNOT pay either the buyer or seller and have them then pay to have the pipes fixed.

Pursuant to T.C.A. 62-13-302(b), “A real estate licensee shall not give or pay cash rebates, cash gifts or cash prizes in conjunction with any real estate transaction.” Therefore, a licensee cannot give a buyer or seller cash or anything which can be converted into cash in conjunction with a transaction.

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]

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5. HOT LINE: Responsibility for Earnest Money?

QUESTION: Is the listing broker responsible for the earnest money in a transaction no matter who holds the earnest money?

ANSWER: The Tennessee Real Estate Commission (TREC) enacted some revisions which went into effect on June 14, 2010. One of these rules deals with escrow accounts and your question specifically. Pursuant to the relevant portions of TREC Rule 1260-2-.09:

*** BEGIN QUOTE ***
(1)  Each broker shall maintain a separate escrow account for the purpose of holding any funds which may be received in his fiduciary capacity as deposits, earnest money, or the like.  Rental deposits must be held in a separate account.

(2)  An affiliate broker shall pay over to the broker with whom he is under contract all deposits and earnest money immediately upon receipt.

(3)  Brokers are responsible at all times for deposits and earnest money accepted by them or their affiliate brokers, in accordance with the terms of the contract.

(4)  Where a contract authorizes a broker to place funds in an escrow or trustee account, the broker shall clearly specify in the contract:
(a)  the terms and conditions for disbursement of such funds; and
(b)  the name and address of the person who will actually hold such funds.

(5)  Where a contract authorizes an individual or entity other than either broker to hold such funds in an escrow or trustee account, the broker will be relieved of responsibility for the funds upon receipt of the funds by the specified escrow agent.
*** END QUOTE ***

Based on the above, the Broker/agent is only responsible for the funds until they have given it to the entity who is stated in the contract to be holding the escrow funds. Therefore, if the Broker is not holding the funds, the Broker’s liability ends as soon as the funds are given to the entity holding the funds as stated in the contract.

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]

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6. 2011 TAR Committee Requests

2011 TAR Committee Request Forms Are Now Online: In the Members Only section of the TAR website, there is a new page titled “Officer & Committee Forms” at: http://www.tarnet.com/members/officerforms.php

If you are interested in serving on a TAR Committee, you can access the application online. The DEADLINE for receipt of the Committee Request form is August 13, 2010!

On the same page, you can also access the online application form to be considered for nomination as a TREEF Trustee. The DEADLINE for receipt of the TREEF Trustee Application form is July 8, 2010!

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7. GRI and Other Courses

July 15 – Aug. 18: E-Class GRI 1, Professionalism in Real Estate (16 hrs. CE) – a distance learning course. For more information or to register, CLICK HERE.

July 22: Homeownership Options for TN Workforce (6 hrs. CE) – Jackson. For more information contact the Central West TN Association of REALTORS at: monica@cwtar.com

July 22: TransactionDesk Basic Course (3 hrs. CE) – Chattanooga. For more information or to register, call 423-698-8001.

July 29: Agency In Tennessee Course (4 hrs. CE) – Chattanooga. For more information or to register, call 423-698-8001.

The complete 2010 schedule of Classroom and E-Class GRI Courses is online at: http://www.tarnet.com/main/education/gri_courses

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

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8. Rates Hit a New All-Time Low

Average interest on a 30-year fixed mortgage fell to an all-time low of 4.69 percent this past week, down from 4.75 percent a week earlier, reports Freddie Mac. Although rates have held below 5 percent since early May, Michael Fratantoni of the Mortgage Bankers Association notes that demand for purchase loans has fallen in six of the past seven weeks and now is at a 13-year low. Consumers have grown used to low rates, he explains, adding that they balk at buying because they are more concerned about stagnant wages and high unemployment.

[SOURCES: Freddie Mac; Information, Inc.]

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9. The TAR DIGEST Takes a Break!

This is the last TAR DIGEST for three weeks. There will be no TAR DIGEST again until the July 20 Edition …so please celebrate our nation’s birthday on July 4th, be safe, be prosperous, and we’ll be back in three weeks!

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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. Operation Stolen Dreams
2. NAR Reports REALTOR Sentiment
3. Two New Resources for TAR Members!
4. HOT LINE: Who Is Considered the Seller?
5. HOT LINE: Can Seller Give Cash Back?
6. TAR Communications Survey Results!
7. GRI and Other Courses
8. Rates Remain VERY Low

To ask a TAR Legal and Ethics Hot Line question, CLICK HERE.

For other questions about this newsletter, please use the “CONTACT” form HERE.

Follow TAR on Twitter!

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1. Operation Stolen Dreams

It is a sad commentary on human nature that a recession and tough economic times will attract even MORE unscrupulous individuals trying to take advantage of those in trouble!

Mortgage fraud has been on the rise throughout this recession, with several schemes targeted at properties and sellers involved in either short sales or foreclosure. That’s the reason for the FBI’s new crackdown on mortgage fraud, Operation Stolen Dreams:

*** BEGIN QUOTE ***
Launched on March 1, 2010, the multi-agency initiative has led to a total of 485 arrests. More than 330 convictions have been obtained, and nearly $11 million has been recovered. Losses from a variety of fraud schemes are estimated to exceed $2 billion.

Operation Stolen Dreams is the government’s largest mortgage fraud take-down to date. But FBI Director Robert S. Mueller cautioned that there is still much work to be done. The Bureau is currently pursuing more than 3,000 mortgage fraud cases, he said, which is almost double the number from the last fiscal year.
*** END QUOTE ***

To read the full story – including several links that explain various fraudulent schemes – CLICK HERE.

[SOURCE: FBI]

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2. NAR Reports REALTOR Sentiment

NAR just released their Surveys of REALTOR Sentiment for each region of the country. Tennessee is in Region 4 (with Kentucky, North Carolina, and South Carolina), represented this year at NAR by Tennessee’s Jewell McKinney, Region 4 Vice President.

The Survey of REALTOR Sentiment compiles both REALTOR comments from around the region, as well as survey data measuring member confidence in the market, through May of 2010.

The latest report indicates cautious optimism, as compared with the same period a year earlier. 53% of respondents to the NAR survey reported participation in a real estate purchase or sale during the previous month, with 44% of the purchasers in those transactions being first-time buyers.

To download and read your own copy of the complete report (in PDF format), go to:
http://www.realtor.org/research/research/srs_rvpr

[SOURCE: NAR]

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3. Two New Resources for TAR Members!

We are pleased to announce two new online “resource centers” for TAR members – one for instructors and company trainers, and a second site for REALTOR Association and company leaders. Both websites are sponsored by TREEF. They offer a wealth of information and recommendations, and both sites will be updated periodically with new suggestions and resources:

Instructor Resources …a resource center for learning-centered instructors!
http://instructorresources.wikispaces.com/

Resources for REALTOR Association Leaders
http://leadingeffectively.wikispaces.com/

If you ever lose the bookmarks to either of the above sites, just check back in the Education section of the TAR website at: http://www.tarnet.com/main/education/

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4. HOT LINE: Who Is Considered the Seller?

QUESTION: I submitted an offer on a short sale. In the case of a short sale who is considered the seller? It appears that the selling agent that I submitted the offer to did not submit the offer to the bank or seller. What’s the remedy if an agent does not present an offer?

ANSWER: The listing agreement is with the seller, not the bank in a short sale situation. The seller still owns the property until the bank retakes it in a foreclosure. Therefore, any offer that is received must be presented to the seller by the listing agent, unless the seller has given the listing agent specific written instructions to the contrary. The lender must approve the transaction, but the agent’s client is the seller.

If you feel that the seller’s agent violated any of legal and ethical requirements to present all offers to their client (unless instructed not to do so), then you can file a complaint with TREC for violations of the Broker’s Act and TREC Rules, or with the local association for violations of the Code of Ethics if the agent is a REALTOR. If the buyer feels that he has been wronged, then he may wish to speak with his own legal counsel concerning his individual legal rights.

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]

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5. HOT LINE: Can Seller Give Cash Back?

QUESTION: Is it permissible for a seller to offer a buyer cash back at closing? I have seen this advertised recently and was under the impression that seller concessions had to be in the form of credits toward buyer closing costs and had to be disclosed on the HUD statement. I can’t find the reference, but isn’t it precluded because of mortgage fraud implications?

ANSWER: This will all depend upon what the lender will allow. We would strongly recommend contacting the lender to determine whether they will permit this. Most often, the lender will not permit the seller to give cash back to the buyer at closing. They are more likely to permit a check to be issued directly to a third party.

PLEASE NOTE that you will need verification (always in writing for your protection) from the lender and NOT the mortgage broker! They are two very different entities! You need verification from the entity that is actually funding the loan.  This will also have to appear on the HUD-1.

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]

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6. TAR Communications Survey Results!

Last week, we invited readers to complete a five-question survey on TAR Communications.  THANK YOU to all who took the time to respond! Following is a summary of what you told us:

Changes Members would like to see in this newsletter (the TAR DIGEST):

• 37.0% – No changes at all
• 28.0% – Short surveys and survey results
• 28.0% – Problem-solving contests for readers
• 25.2% – Bi-monthly instead of a weekly newsletter
• 22.5% – Occasional interviews with prominent TN brokers
• 14.4% – Shorter articles with links

Members are split EXACTLY down the middle on the value of social media (Facebook, Twitter, blogs, etc.), with 50.0% feeling that social media are somewhat or extremely valuable, and 50.0% either unsure or negative on their value!

Nevertheless, 72.8% consider themselves somewhat or extremely knowledgeable about social media.

As to which social media members actually use, Facebook is the clear favorite, with 56.2% of members using it versus the next most popular choice, Linked-In (used by 30.3% of members). All other choices (Twitter, ActiveRain, blogs, etc.) are used by MUCH smaller percentages of members. 36.7% of members don’t use any social media.

How do members want to receive communications from TAR? 90.2% of members prefer email only.

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7. GRI and Other Courses

June 28: TransactionDesk Basic Course (3 hrs. CE) – Union City. For more information contact Jennifer Hooks with the Reelfoot Regional Association of REALTORS at: rrarinc@usit.net

A new series of E-Class GRI courses begins in July, and more classroom GRI courses are scheduled in 2010, beginning in August. The complete 2010 schedule of Classroom and E-Class GRI Courses is online and accessible by CLICKING HERE.

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

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8. Rates Remain VERY Low

Last week, Bankrate.com reported very favorable rates, with the 30-year fixed remaining unchanged from the previous week’s record low.

The benchmark 30-year fixed-rate mortgage remained 4.88 percent last week, according to the Bankrate.com national survey of large lenders. The mortgages in this week’s survey had an average total of 0.48 discount and origination points. One year ago, the mortgage index was 5.76 percent; four weeks ago, it was 4.96 percent.

In the nearly 25-year history of Bankrate’s weekly rate survey, the 30-year fixed has fallen below 5 percent just five times. And all five times were the last five weeks.

Meanwhile, the Mortgage Bankers Association reported that three-fourths of recent financing applications were from homeowners who wanted to refinance.

[SOURCES: Bankrate.com; Mortgage Bankers Association]

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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. TREC’s New Rules Effective June 14, 2010
2. TAR Survey Results!
3. HOT LINE: Listing Advertised by Someone Else?
4. HOT LINE: Listing a Condo?
5. Special Offer on Our Online Courses!
6. GRI and Other Courses
7. Rates and Mortgage Applications BOTH Hit New Lows!

To ask a TAR Legal and Ethics Hot Line question, CLICK HERE.

For other questions about this newsletter, please use the “CONTACT” form HERE.

Follow TAR on Twitter!

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1. TREC’s New Rules Effective June 14, 2010

The Tennessee Real Estate Commission (TREC) passed new rules last year, which became effective this week on June 14, 2010!

Everyone needs to become familiar with the new rules, as they will may affect your business in several areas:

• Handling of deposits and earnest money
• Advertising (in print, in signage, and on the Internet)
• CE courses and requirements
• Termination of affiliation with a company

To download your own PDF copy of the new rules, CLICK HERE.

[SOURCE: TREC]

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2. TAR Survey Results!

Last week, many of our readers (approximately 700!) were kind enough to give us their opinions in a 2010 TAR Membership Survey, and the answers were interesting:

• 61.4% of members feel SOMEWHAT or VERY OPTIMISTIC about the future of the real estate business!
• 65.4% of members feel SOMEWHAT or VERY OPTIMISTIC about the future of their PERSONAL real estate business!

Note that more people feel confident about their own future success than they feel about the industry’s success. In both cases, however, most members are optimistic about the future.

Another question asked about which of TAR Services members have used or are using:

95.4% — TAR Forms
91.8% — TAR DIGEST
60.2% — TAR Education (GRI and CE courses)
48.1% — TAR Legal & Ethics Hot Line
38.7% — Governmental Affairs Updates
26.9% — TAR Spring Conferences (in March)
17.5% — TAR Fall Conventions (in September)
14.1% — Other reference materials on TAR’s website
8.7% — Instructor Training
8.5% — Podcasts (Audio and Video)
6.7% — Leadership Training (Leadership Conferences and/or Leadership TAR)

WE NEED YOUR HELP AGAIN! This week, we ask everyone to respond to the (VERY SHORT) 2010 TAR Communications Survey! This is the only other survey planned for this summer, and it will only take you a minute or two. To complete this survey, CLICK HERE.

Thanks again! We love our readers!

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3. HOT LINE: Listing Advertised by Someone Else?

QUESTION: My company represents the seller in an Exclusive Right To Sell Listing Agreement and my client has contacted me regarding another firm marketing their home in a postcard mailing. The postcard lists and describes my client’s property (along with 6 other properties), and the marketing material makes it appear as though this other firm has the listing. It is not a “farming” mailing, but rather states: “The following homes are now offered For Sale”. Do they have the right to send out these mailings without my permission and the seller’s permission?

ANSWER: As specified in Rule 1260-02-.12, part (2) of the new TREC Rules now in effect [see above]:

(d) No licensee shall advertise property listed by another licensee without written authorization from the property owner. Written authorization must be evidenced by a statement on the listing agreement or any other written statement signed by the owner.
(e) No licensee shall advertise in a false, misleading, or deceptive manner.

The REALTOR Code of Ethics and Standards of Practice emphasize the same requirement. Pursuant to Standard of Practice 12-4: “REALTORS shall not offer for sale/lease or advertise property without authority….”

This type of advertising could certainly be deemed to be misleading by TREC and/or the local board. When advertising someone else’s listing, you should take the following steps to avoid possible complaints:

1. Get the permission of the listing agent and the seller;
2. On ALL advertising, you should list the firm name and telephone of both the advertising company AND the listing company.  This will prevent the public from being misled.

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]

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4. HOT LINE: Listing a Condo?

QUESTION: What form do I use when listing a condo?

ANSWER: TAR does not have a listing agreement specifically geared toward condominiums. However, we would recommend that you use the Listing Agreement for residential property. You will want to include a better legal description that will be suitable for condos. You can use the language on F19, the Condominium Legal Exhibit (for the Purchase and Sale Agreement). You should also request that the seller obtain a copy of the bylaws, the declarations, etc. You will also need to get the name of the condominium association and/or declarant.

Although it is not something that you will have the seller complete, you may see form F23, Request for Condominium Association Information. This is a form which would be given to the condo association or declarant (usually the developer) to produce the documents requested.

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]

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5. Special Offer on Our Online Courses!

NEW! An online version of the 2009-2010 Core CE Course (4 hrs. CE) – developed with assistance from TREEF – is now available through one of TAR’s education partners, The CE Shop, at a special 25% discount!

This course is designed to clarify the common misconceptions and misunderstandings related to the TAR Purchase and Sale Agreement. The course walks through the Agreement along with the required disclosures and other forms. You will learn how to complete the common forms, adhere to timelines and notices, disclose material defects, and handle earnest money appropriately. The course also addresses important legal issues, including agency law and the rules and regulations of the Tennessee Real Estate Commission. To access the course, CLICK HERE …and enter the following Promo Code at checkout: TN25

AND…the seven other online courses offered by The CE Shop to TAR members are now available at a 15% discount! To get this discount, enter the following Promo Code at checkout: EDU15

Discounts are available only through the end of June, so act soon!

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6. GRI and Other Courses

June 28: TransactionDesk Basic Course (3 hrs. CE) – Union City. For more information contact Jennifer Hooks with the Reelfoot Regional Association of REALTORS at: rrarinc@usit.net

A new series of E-Class GRI courses begins in July, and more classroom GRI courses are scheduled in 2010, beginning in August. The complete 2010 schedule of Classroom and E-Class GRI Courses is online and accessible by CLICKING HERE.

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

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7. Rates and Mortgage Applications BOTH Hit New Lows!

Mortgage rates this past week dropped to another record low. The benchmark 30-year fixed-rate mortgage fell 7 basis points this past week, to 4.88 percent, according to the Bankrate.com national survey of large lenders. A basis point is one-hundredth of 1 percentage point.

This was the third time in four weeks the benchmark 30-year rate has set a record low in Bankrate’s weekly survey. The old record, set two weeks ago, was 4.92 percent.

Meanwhile, the Mortgage Bankers Association (MBA) reported the fifth consecutive weekly decline in mortgage applications on June 9, marking a 13-year low as purchase requests fell 5.7 percent and refinancing applications plunged 14.3 percent. Michael Fratantoni, vice president of research and economics at MBA, says low mortgage rates have failed to trigger another refinancing boom because borrowers have already refinanced, owe more than their homes are worth, or lack the job security or credit necessary to do so. Observers believe the decline indicates that the federal tax credits ending in April stole from future sales.

[SOURCES: Bankrate.com; Newsday; Information, Inc.]

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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. “Disclosure By Neighbor”
2. Your Help IS Needed
3. HOT LINE: Advertising Listings on Facebook?
4. HOT LINE: Census Takers Asking Questions?
5. HOT LINE: TAR Forms Made Available to Public?
6. Upcoming Courses
7. Rates Remain Near Record lows

To ask a TAR Legal and Ethics Hot Line question, CLICK HERE.

For other questions about this newsletter, please use the “CONTACT” form HERE.

Follow TAR on Twitter!

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1. “Disclosure By Neighbor”

A blog post by Antonio Cardenas caught our attention last week: “Sellers, If You Don’t Tell The Buyer Everything… Your Neighbors Will”

His article captures a truth that all experienced REALTORS know …full disclosure at the outset is always preferable when dealing with property conditions that many sellers would rather not talk about, or document!

In addition to good advice, Mr. Cardenas’ article includes the story of one seller’s non-disclosure of a foundation issue that had occurred long before the seller even acquired the house, a non-disclosure that resulted in a costly lawsuit:

*** BEGIN QUOTE ***
But how did the new owner knew? The neighbor across the street come to greet the new owners, and as they unloaded their belongings, she told them the history of the house, and how the foundation gave way, and how it was fixed. The new buyers felt they should have been told, consulted an attorney who made a case and got some money from the seller.
*** END QUOTE ***

The result? The sellers ended up paying $120,000 to the buyers, on top of legal fees for both parties after two years of haggling and sleepless nights!

To read the full posting, CLICK HERE.

[SOURCE: BrokerAgentSocial weblog]

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2. Your Help IS Needed

We want your opinions ….no, let me rephrase that: We NEED your opinions!

Please take just a minute or two and respond to a SHORT (5-Question) survey of the TAR membership by CLICKING HERE.

We are preparing to update our Strategic Plan for the Tennessee Association of REALTORS and we want to know what YOU think about the future! This won’t take long, the survey ends in one week, and we’ll publish a summary of survey results in next week’s TAR DIGEST, for your viewing pleasure!

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3. HOT LINE: Advertising Listings on Facebook?

QUESTION: Can I advertise my listing on Facebook?

ANSWER: Advertising on Facebook would be just like advertising in any other medium. You must comply with all advertising rules and regulations. At a MINIMUM, all advertising must contain the firm’s name AND firm telephone number.

In addition, Standard of Practice 12-9 in the REALTOR Code of Ethics states:

“REALTOR firm websites shall disclose the firm’s name and state(s) of licensure in a reasonable and readily apparent manner.

Websites of REALTORS and non-member licensees affiliated with a REALTOR’s firm shall disclose the firm’s name and that REALTOR’s or non-member licensee’s state(s) of licensure in a reasonable and readily apparent manner.”

Since a REALTOR’s Facebook page may be construed as just another website, compliance with all of the above would appear necessary.

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]

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4. HOT LINE: Census Takers Asking Questions?

QUESTION: I am getting calls on my listings and foreclosures from people saying they are with the Census Bureau about either the occupancy of the home or the forwarding address of the owners. They are giving me a call back number; but I am concerned this may violate my clients’ privacy. Should I respond?

ANSWER: You have a duty to preserve your client’s confidential information (and this would include information received from clients who have already closed). Therefore, you cannot disclose this information to the census workers unless you have the permission of your client. You can take down the census worker’s information and offer to ask your client to call them.

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]

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5. HOT LINE: TAR Forms Made Available to Public?

QUESTION: Is it acceptable for a firm (or an individual REALTOR) to have the TAR Forms online and accessible to the general public, without a password? I thought these forms are for the exclusive use of TAR members and should at least be secured behind a password.

ANSWER: You are correct that these forms are copyrighted and may ONLY be used by members of TAR. Therefore, it is NOT permitted for these forms to be posted online for use by members of the general public.

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]

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6. Upcoming Courses

June 28: TransactionDesk Basic Course (3 hrs. CE) – Union City. For more information contact Jennifer Hooks with the Reelfoot Regional Association of REALTORS at: rrarinc@usit.net

A new series of E-Class GRI courses begins in July, and more classroom GRI courses are scheduled in 2010, beginning in August. The complete 2010 schedule of Classroom and E-Class GRI Courses is online and accessible by CLICKING HERE.

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

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7. Rates Remain Near Record Lows

The national average 30-year fixed-rate mortgage rose 3 basis points this past week, to 4.95 percent with an average total of 0.45 discount and origination points, according to the Bankrate.com national survey of large lenders. A basis point is one-hundredth of 1 percentage point. One year ago, the 30-year mortgage index was 5.65 percent. Last week, the benchmark 15-year fixed-rate mortgage edged up at 4.36 percent.

Today’s mortgage rates remain near record lows, spurring on refinance activity. Refinance mortgage loan application volume is now at its highest level since October 2009, according to the Mortgage Bankers Association.

[SOURCE: Bankrate.com]

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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. Disaster-Related Sources of Assistance
2. FHA To Lower Cap on Seller Concessions
3. HOT LINE: Listed in 2009, But Sold in 2010?
4. HOT LINE: Seller Excluding Certain Buyers?
5. TECH TIP: Digital Signatures with TransactionDesk
6. A Welcome Testimonial…
7. Rates Hit Another Record Low

To ask a TAR Legal and Ethics Hot Line question, CLICK HERE.

For other questions about this newsletter, please use the “CONTACT” form HERE.

Follow TAR on Twitter!

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1. Disaster-Related Sources of Assistance

FEMA encourages everyone in Tennessee affected by the floods to register immediately for federal assistance.  For those affected by the recent floods, you can register for federal assistance by calling 1-800-621-FEMA (3362) or by visiting www.DisasterAssistance.gov.  You can also visit m.fema.gov from your mobile device for information or visit the FEMA-TEMA Facebook page at: www.facebook.com/TNDisasterInfo

Additional Information

• Resources for Storm Survivors: http://www.tennesseeanytime.org/gov/flood-help/
• Disaster Assistance: http://www.disasterassistance.gov/daip_en.portal
• Disaster Unemployment Assistance Information: http://www.fema.gov/assistance/process/additional.shtm#1
• Additional Assistance: http://www.fema.gov/assistance/process/additional.shtm
• What to do After a Flood: http://www.fema.gov/hazard/flood/fl_after.shtm
• Rebuilding Resources: http://www.fema.gov/rebuild/recover/resources.shtm
• Fixing Flood Damage: http://www.fema.gov/hazard/flood/coping.shtm

The deadline to apply for Physical Damage Disaster Loans is JULY 6!

[SOURCE: FEMA]

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2. FHA To Lower Cap on Seller Concessions

The FHA is expected this summer to slash the cap on “seller concessions” from 6 percent of the home price to 3 percent. In announcing the policy change, FHA officials said the 6 percent maximum “exposes the FHA to excess risk by creating incentives to inflate appraised value.” Some have called for a “sliding scale” approach, with higher concessions allowed on lower-priced homes and the lowest concessions permitted on more expensive property. Seller concession rules allow the seller to pay for an array of services and taxes connected with the deal.

[SOURCES: Information, Inc.; Chicago Daily Herald]

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3. HOT LINE: Listed in 2009, But Sold in 2010?

QUESTION: If property is listed in 2009 using 2009 forms and a contract is written in May 2010 using the 2010 Purchase and Sale agreement, do all the 2009 listing documents need to be redone using 2010 forms?

ANSWER: As long as the most current version of the form was used when it was executed, then everything is fine. You will just need to make sure that all disclosures were made according to F85 if they were present. Several of the provisions of that form were enacted during 2009.

Therefore, if the seller knows of an exterior injection well, soil absorption rates, percolation tests or if the home was moved from one foundation to another, it must be disclosed. In addition, if the property is in a PUD, the seller must disclose this as well.

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]

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4. HOT LINE: Seller Excluding Certain Buyers?

QUESTION: The current owner recently divided her property into two parcels and built a new home on one parcel. She wishes to sell the old home, but she does not want to sell her old home to an investor because she does not want to have renters next to her new home. Can I list the home as available to “owners only” – no investors? She also does not want to sell to the “trashy people” (her words) who now live next to her. I don’t want to violate Fair Housing standards, and this is not a race issue. I have explained those concerns to her.

ANSWER: The TAR Hot Line cannot advise the seller as to their legal obligations. However, you are permitted to list a house as long as you know that the homeowner is not going to discriminate against a protected class – race, color, religion, sex, handicap, familial status, or national origin. The seller can omit specific people or classifications of people as long as it does not fall into one of the aforementioned categories. We would recommend getting these in writing along with the reasons for the omission.

If the seller has questions about what she can do, she should speak with her own legal counsel.

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]

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5. TECH TIP: Digital Signatures with TransactionDesk

Buzz Steele, TAR’s Director of Marketing and Research oversees TAR forms and TransactionDesk. Buzz has produced a very useful webcast on how to use digital signatures with TransactionDesk!

To view it, CLICK HERE.

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6. A Welcome Testimonial…

Our latest series of E-Class GRI courses is drawing to a close this week, but a new series of E-Class courses begins on July 15! Our instructor-coached E-Class GRI courses are among our most popular educational offerings. One student’s testimonial, sent to his instructor, follows:

*** BEGIN QUOTE ***
Thanks for the latest GRI class. Having obtained my brokers license, I wanted to devote my next education to getting my GRI. I had no idea how much it would benefit me. All of the classes have been structured to make the student go out and find the answers. …It is mine, and my principal broker’s opinion, that the company pay for our agents to take the GRI courses. They are that great. Please pass this on to TAR and the other instructors. Thanks!
*** END QUOTE ***

To learn how E-Class GRI courses work, go to:
http://www.tarnet.com/main/education/e-class_gri_info/

The complete 2010 schedule of Classroom and E-Class GRI Courses is online HERE.

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

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7. Rates Hit Another Record Low

The average 30-year fixed-rate mortgage slid 4 basis points, to 4.92 percent. A basis point is one-hundredth of a percentage point. The new rate is the lowest in the nearly 25-year history of the weekly Bankrate survey, eclipsing the previous record set last week.

Meanwhile, this week’s average 15-year fixed-rate — a popular option for refinancing — remained unchanged, at a Bankrate survey record-low 4.34 percent.

Nationally, home prices are now at the same level they were in the Spring of 2003.

[SOURCE: Bankrate.com]

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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. Tennessee Rated Very Good for Business!
2. Mortgage Applications Fall, Economists Cautious
3. HOT LINE: Depositing Earnest Money for a Short Sale?
4. HOT LINE: Terminating a Listing?
5. Upcoming GRI and Other Courses
6. Rates Hit 25-Year Low

To ask a TAR Legal and Ethics Hot Line question, CLICK HERE.

For other questions about this newsletter, please use the “CONTACT” form HERE.

Follow TAR on Twitter!

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1. Tennessee Rated Very Good for Business!

CHIEF EXECUTIVE magazine annually reports which states offer the best and worst conditions for businesses to prosper (evaluating such things as tax policies, quality of life, infrastructure, regulatory environment, etc.)

In their newly released report, those states rated as the best places to do business are:

1. Texas
2. North Carolina
3. Tennessee
4. Virginia
5. Nevada

And the states rated as the worst places?

1. California
2. New York
3. Michigan
4. New Jersey
5. Massachusetts

Notwithstanding floodwaters, Tennessee’s a great place to live and work!

[SOURCES: REALTOR Magazine Online; Chief Executive Magazine]

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2. Mortgage Applications Fall, Economists Cautious

This report from the Mortgage News Daily NewsWire last week is concerning:

*** BEGIN QUOTE ***
The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending May 14, 2010.

Michael Fratantoni, MBA’s Vice President of Research and Economics summed up the survey:

“Purchase applications plummeted 27 percent last week and have declined almost 20 percent over the past month, despite relatively low interest rates. The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season. In fact, this drop occurred even as rates on 30-year fixed-rate mortgages continued to fall…
*** END QUOTE ***

We hope that Mr. Frantonini is wrong in his analysis!

Economists at the National Association of Home Builders are more optimistic, with reservations: “Economists participating in yesterday’s [May 18, 2010] NAHB Construction Forecast Conference Webinar agreed that the housing market is on the road to recovery, but cautioned that several factors could contribute to a bumpy ride in the coming months.”

To read the full NAHB analysis, CLICK HERE.

[SOURCES: Mortgage News Daily; Mortgage Bankers Association; National Assn. of Home Builders]

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3. HOT LINE: Depositing Earnest Money for a Short Sale?

QUESTION: I am currently working a short sale. The buyer and seller have agreed on price subject to lender approving short sale. Buyer gave us a check for the earnest money. Are we to deposit the earnest money or wait until the lender agrees to the contract?

ANSWER: Pursuant to TREC Rule 1260-2-.09(8), “Earnest money shall be deposited into an escrow or trustee account promptly upon acceptance of the offer, unless the offer contains a statement such as “Earnest money to be deposited by:”. Therefore, you are to deposit it according to the terms of the contract or if the contract is silent, upon acceptance of the offer by the seller.

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]

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4. HOT LINE: Terminating a Listing?

QUESTION: I need a form to use when a seller wants to terminate his listing agreement. I cannot find it in the list of TAR Forms. Will you please give me the form number?

ANSWER: A listing agreement is a written contract that establishes an agency relationship between a seller and a real estate company. In order to terminate this contract, it requires a termination and release in writing and signed by all parties to the listing agreement. It should terminate the contract and release both sides from the obligations under the original listing agreement. Until this is completed, the listing agreement will continue in place until its natural termination.

If a seller wants to terminate his listing agreement with you, your principal broker must decide whether you wish to hold them to that contract or not. This is completely up to the broker as to whether they want to release them from the listing. TAR provides a form for you to use if you agree to terminate the listing – form F82. It does provide a carry over clause (if they sell their home within X days without the help of another agent who was introduced to it by the original listing agent) and a place to negotiate a cancellation fee. It also provides for a complete release with no fees having to be paid.

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]

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5. Upcoming GRI and Other Courses

May 26: Workshop for Agency Instructors (4 hrs. CE) – Nashville, TAR Office.

May 26-27: GRI 2, Smart Marketing (16 hrs. CE) – Knoxville.

June 2-3: Leadership TAR Retreat, “Leading Others Effectively” – Montgomery Bell State Park.

The complete 2010 schedule of Classroom and E-Class GRI Courses is online!

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

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6. Rates Hit 25-Year Low

Bankrate.com reports that mortgage rates hit a new low in the nearly 25-year history of its weekly survey, with the average 30-year fixed mortgage dropping to 4.96 percent. The Mortgage Bankers Association, though, forecasts this benchmark to rise from an average of 5 percent in the first quarter to 5.4 percent by the end of next month. The group’s Michael Fratantoni comments, “I think you’re going to see weeks where private investors are in and weeks when private investors step back from mortgages — and as a result, you’ll see higher rate volatility in the next couple of months.”

Note that Bankrate.com computes weekly rates by averaging rates reported by major lenders. Freddie Mac’s weekly rate reports are calculated differently. Freddie Mac reported 30-year rates averaging 4.84 percent in its most recent survey, the lowest rate reported in 2010.

[SOURCES: Bankrate.com; Freddie Mac; Information, Inc.]

_______________________________________________________
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. Call for Action: Prevent New Tax Burdens on Real Estate!
2. Tax Credit Extended for Some Military and Foreign Service Employees Based Overseas
3. HOT LINE: Can I Use TAR Form for the Counter?
4. HOT LINE: Buyer and Seller Signing Different Copies?
5. HOT LINE: A Possible Lien on a Short Sale?
6. Upcoming GRI and Other Courses
7. Get Tech Tips …and Help a Worthy Cause!
8. Rates Hit New Low for 2010

To ask a TAR Legal and Ethics Hot Line question, CLICK HERE.

For other questions about this newsletter, please use the “CONTACT” form HERE.

Follow TAR on Twitter!

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1. Call for Action: Prevent New Tax Burdens on Real Estate!

Congress is considering changes to the tax code in order to pay for a number of tax provisions expiring in 2010. Two of these provisions would impact real estate. The first would require all owners of rental properties to file IRS 1099 forms for all contractors they do business with if they pay that contractor $600 or more in any given year. This onerous provision would apply to even the smallest landlord.

In addition, Congress is considering taxing “carried interest” at ordinary income rates instead of capital gains. Carried interest rules govern how general partners in real estate investments pay taxes when the investment is sold.

These new tax burdens will further delay the real estate market recovery. These proposals are ill-advised, inopportune and potentially destructive. Please tell Congress to oppose them today! To take action, CLICK HERE.

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2. Tax Credit Extended for Some Military and Foreign Service Employees Based Overseas

While the Homebuyer Tax Credit has expired for most buyers signing contracts after April 30, 2010, the credit remains in effect for certain military personnel and foreign service employees deployed overseas for 90 days or more between January 1, 2009 and April 30, 2010.

They can still claim the credit if they sign a contract on or before April 30, 2011 and close on or before June 30, 2011. While this is a relatively small group, it is worth keeping in mind — particularly for members of the military ending tours of duty in Iraq and Afghanistan among other places, as well as for sailors returning from naval deployments across the globe.

For more details, CLICK HERE.

[SOURCES: NAR; IRS]

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3. HOT LINE: Can I Use TAR Form for the Counter?

QUESTION: I received an offer from an unrepresented buyer on one of my listings. This buyer works for a bank and had a title company draw up the contract. She was told by TAR that, not being a REALTOR, she could not use a TAR purchase and sale agreement. I do not want to use the contract that the title company used because it is missing a lot of language that is in the TAR purchase and sale agreement. Is it ok for me to use the TAR Purchase and Sale Agreement as a counter so that the contract is on that instead of her title company’s contract?

ANSWER: First, we would recommend speaking to your client concerning the offer. Explain the elements which are missing from the attorney-drafted offer and determine whether or not the seller is comfortable.  If the seller wishes to use the TAR form, this is fine since you are representing the seller. You can always counter back with the completed TAR form or counter, requesting that the buyer use this form instead.

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]

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4. HOT LINE: Buyer and Seller Signing Different Copies?

QUESTION: If I prepare an addendum to a contract and the buyer and seller both sign it, but not on the same copy, is that legal?

ANSWER: This will depend upon the terms of the original contract. Look to see if the original contract will allow the documents to executed in counterparts. This generally means that one party can sign one copy and the other party can sign another copy. Please keep in mind that we cannot provide you with an interpretation of an executed contract. If you have specific questions about this particular contract, you will need to speak with your own attorney.

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]

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5. HOT LINE: A Possible Lien on a Short Sale?

QUESTION: I am working with a seller on a short sale. In the residential property disclosure, the seller stated that the roof was in good condition. I just learned that the roof was recently replaced; however, the seller has not yet paid the contractor. The contractor is threatening to put a lien on the property, but hasn’t done so yet. Because I now know of this fact, am I required to disclose it to the lender and/or buyer?

ANSWER: As a real estate agent, you are required as a real estate agent to disclose adverse facts.  Pursuant to Tenn. Code Ann. 62-13-403(2), a real estate agent is required to “[d]isclose to each party to the transaction any adverse facts of which the licensee has actual notice or knowledge.” Tennessee law defines an adverse fact as “conditions or occurrences generally recognized by competent licensees that have a negative impact on the value of the real estate, significantly reduce the structural integrity of improvements to real property or present a significant health risk to occupants of the property.” Tenn. Code Ann. S 62-13-102(2).

THEREFORE, if an agent has actual knowledge of an adverse fact, he MUST disclose it. A lien on the property could have a negative impact on the value of the property. If you determine that it would, then you are required to disclose it.

We would advise that you talk with the seller and advise him of the situation. He may volunteer to disclose it and have it addressed in the contract. We would also recommend that the seller contact his own legal counsel for advice on this situation as it may affect his ability to close (both from the standpoint of the contractor and possibly the lender since it is a short sale).

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]

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6. Upcoming GRI and Other Courses

May 18-19: GRI 3, Financing the Successful Transaction (16 hrs. CE) – Nashville, TAR Office.

May 20-21: 2-Day ABR Course (16 hrs. CE) – Hendersonville. For more information, contact the Sumner Association of REALTORS, 615-824-6629.

May 24: eBuyer Course (8 hrs. CE) – Hendersonville. For more information, contact the Sumner Association of REALTORS, 615-824-6629.

May 26: Workshop for Agency Instructors (4 hrs. CE) – Nashville, TAR Office.

May 26-27: GRI 2, Smart Marketing (16 hrs. CE) – Knoxville.

June 2-3: Leadership TAR Retreat, “Leading Others Effectively” – Montgomery Bell State Park.

The complete 2010 schedule of Classroom and E-Class GRI Courses is online!

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

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7. Get Tech Tips …and Help a Worthy Cause!

As a general rule, we don’t promote books, etc., unless there is a compelling reason or an exceptional value to be had. In the following case, there are both!

Joseph Ferrara, a regular blogger to the real estate community and occasional columnist for Inman News (on all things tech-related) has been diagnosed with a malignant brain tumor. To help his family defray some of their huge medical costs, Inman News has published a collection of ten (10) of Joe Ferrara’s best columns on technology tips for REALTORS — a “Tech Tool Shed Top 10″ collection! It’s priced at only $10 and all of the proceeds go to the Ferrara family!

For more information, or to purchase the collection, CLICK HERE.

[SOURCE: Inman News]

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8. Rates Hit New Low for 2010

The 30-year fixed mortgage rate has fallen for the fifth straight week, from 5 percent last week to 4.93 percent — its lowest level so far in 2010, according to Freddie Mac. The decline followed the fall in Treasury yields as investors sought a haven following recent stock market volatility. Also, 15-year fixed loans fell to 4.3 percent from 4.36 percent; five-year hybrid adjustable-rate mortgages declined to a new low of 3.95 percent from 3.97 percent; and one-year ARMs fell to 4.02 percent from 4.07 percent.

[SOURCES: Freddie Mac; Information, Inc.]

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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. Flooding Concerns
2. Upcoming Courses & Events

To ask a TAR Legal and Ethics Hot Line question, CLICK HERE.

For other questions about this newsletter, please use the “CONTACT” form HERE.

Follow TAR on Twitter!

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1. Flooding Concerns

Due to disruptions caused by flooding in the mid-state area, power outages, etc., this will be a much-abbreviated issue of the TAR DIGEST. We will also not publish next week, because of staff travel to NAR meetings, but we will return with the 5-18-10 issue of the TAR DIGEST.

In the meantime, we note with great sadness the tremendous loss of life and property experienced by so many this past weekend. We also know that the homes of many REALTORS and REALTOR Association Staff were damaged or lost in the recent flooding, and so we solicit your thoughts and prayers for their comfort and recovery in the days and weeks ahead.

It is also at times like this that we see the best of human nature on display, through acts of kindness and assistance to those less fortunate. For these we are extremely grateful!

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2. Upcoming Courses & Events

May 5: Homeownership Options for Tennessee’s Workforce! (6 hrs. CE) – Columbia. For more information, contact the Southern Middle TN Association of REALTORS at 931-381-5556.

May 5-6: GRI 6, Sticky Situations (16 hrs. CE) – Mt. Juliet.

May 5-6: ABR 2-Day Course (16 hrs. CE) – Chattanooga. For more information, contact the Chattanooga Association of REALTORS at 423-698-8001.

May 7: Short Sales & Foreclosures (ABR Elective, 8 hrs. CE) – Chattanooga. For more information, contact the Chattanooga Association of REALTORS at 423-698-8001.

May 10-15: NAR’s Midyear Conference, Washington DC.

May 17-18: ABR 2-Day Course (16 hrs. CE) – Kingsport area. For more information, contact the Northeast Association of REALTORS at 423-477-0040.

May 18-19: GRI 3, Financing the Successful Transaction (16 hrs. CE) – Nashville, TAR Office.

May 26: Workshop for Agency Instructors (4 hrs. CE) – Nashville, TAR Office.

May 26-27: GRI 2, Smart Marketing (16 hrs. CE) – Knoxville.

The complete 2010 schedule of Classroom and E-Class GRI Courses is online!

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

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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