The TAR Digest: The Membership Newsletter of the Tennessee Association of Realtors
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The 11-11-14 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville


1. Upcoming COURSES & EVENTS
2. Homebuyers Are Changing
3. Where Are the First-Time Buyers?
4. NAR Issues Call For Action!
5. About Those 20% Down Payments…
6. TECH TIP: 9 Mobile Apps You Should Consider
7. HOT LINE: Withdrawing a Counter Offer?
8. HOT LINE: Use of an Escalation Clause?
9. HOT LINE: Payment to an Inactive Licensee?
10. Check Your Own CE Hours, Etc.

“Happiness consists of living each day as if it were the first day of your honeymoon and the last day of your vacation.” — Leo Tolstoy

NOTE: If you’re reading this on a mobile device (iPhone, etc.), GO HERE for a mobile-friendly DIGEST.

This week on Veteran’s Day, please join us in honoring those who have served, those who are serving, and those who will serve …to protect and defend our great country!


1. Upcoming COURSES & EVENTS

Nov. 11: Be Safe: Real Estate, Robbers, Thugs & Con Men (2 hrs. CE) – TAR Office, Nashville. For more information or to register, go HERE.

Nov. 12: TransactionDesk Basic (3 hrs. CE) – TAR Office, Nashville. For more information or to register, go HERE.

Nov. 12: TransactionDesk Advanced (3 hrs. CE) – TAR Office, Nashville. For more information or to register, go HERE.

To see upcoming offerings of TREC CORE COURSES, ABR COURSES, etc., – at locations around the state – go to the TAR Calendar at: http://www.tarnet.com/meetings-and-events/calendar-of-events/


2. Homebuyers Are Changing

This past week, Realtors from across the country gathered in New Orleans for the NAR Annual Convention. One of the many things they learned is that the demographics of homebuyers are changing significantly:

*** BEGIN QUOTE ***
“Among primary residence homebuyers, the demographics have shifted dramatically, especially among first-time homebuyers, whose share of the market has dropped to its lowest level in decades,” said Jessica Lautz, director of member and consumer survey research for the National Association of Realtors. “We have also seen an increase in the median age and income of the average buyer, as well as in multigenerational household formations as adult children and elderly family members move back in with their families.”
*** END QUOTE ***


3. Where Are the First-Time Buyers?

As noted in our lead news story, first-time home buyers claimed their smallest slice of the ownership market since 1987 this year, according to the National Association of Realtors (NAR). Their stake in the market dropped to 33 percent from 38 percent last year based on NAR’s latest annual survey, which included 6,500 people who bought a primary residence between July 2013 and June 2014.

First-time ownership usually accounts for about 40 percent of all home buys in a year, but the rate has been trending downward since 2011 and is now at its lowest since hitting 30 percent 27 years ago. First-time buyer trends are heavily watched, given that these consumers are the reason that existing homeowners are able to move up — which in turn keeps the housing sector and economy humming. However, notes NAR chief economist Lawrence Yun, today’s young adults are being challenged by tough job market, flat income growth, escalating rents, and mounds of student loan debt.

To read more, go HERE.


4. NAR Issues Call For Action!

This week, NAR will launch an all-member Call for Action on “The Mortgage Forgiveness Tax Relief Act.” This bill would extend an expired provision that has helped millions of distressed American families by allowing tax relief for homeowners when lenders forgive some portion of the mortgage debt they owe. The provision expired last Dec. 31st and it is imperative to get it extended before impacted homeowners have to file their 2014 income tax. The Call for Action asks all Realtors to contact their Member of Congress and United States Senators and urge an immediate vote when the “Lame Duck” session begins following the election.

When you receive this Call in your email, PLEASE TAKE ACTION!


5. About Those 20% Down Payments…

According to a new MarketWatch article by Quentin Fottrell (“Saving for a down payment? It could take you until 2027″), it could take a LONG time to save enough:

*** BEGIN QUOTE ***
If first-time home buyers start saving for their down payment today, in 10 years they still won’t have enough stashed away.

Stagnant wages and rising property prices don’t bode well for first-time buyers who don’t have equity or wealthy parents to help them out. It takes an average of 12.5 years to save up a 20% down payment — the usual requirement by banks — with the current personal savings rate of 5.6%, according to new research by real-estate firm RealtyTrac. It could take even more than that. RealtyTrac’s figure is based on current house prices — and doesn’t take into account possible further rises in home prices.
*** END QUOTE ***

To read more, go HERE.


6. TECH TIP: 9 Mobile Apps You Should Consider

Recently, Inman News featured an article by Craig McClelland (“You’ll wonder how you ever lived without these 9 mobile apps”) that highlights a number of tools for your phones and/or pads that can boost your productivity:

*** BEGIN QUOTE ***
We’re not going mobile anymore, we’ve gone mobile. And that’s a good thing!

It means you can (and should) set up your business so you can manage it on the go.

Doing so gives most clients exactly what they want: the ability to to do business anywhere at any time.

Mobility makes life easier for your clients, but it can also make life easier for you.
*** END QUOTE ***

To read his whole article, go HERE.


7. HOT LINE: Withdrawing a Counter Offer?

QUESTION: When you present a counter offer to the other side but have not received it back yet, what process do you have to use to be in a position to accept another offer in the meantime? If you wish to withdraw the outstanding counter offer, can it be by phone call or must it be in writing to be valid?

ANSWER: TAR does not have a form which is used to withdraw an offer before it is accepted. Simply have your client write a letter stating that he is providing notice that he is withdrawing his offer for the property at 123 Main Street, Anytown, TN. The buyer will need to sign this note. This letter can be on anything – including a brown paper bag. The same would be true of a counter offer. There have been occasions in which an oral withdrawal would suffice. However, if the parties are disputing whether an offer or counter was properly and effectively withdrawn, they can speak with their own legal counsel.

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


8. HOT LINE: Use of an Escalation Clause?

QUESTION: I would like some guidance regarding whether or not an escalation clause can be included in the special stipulations section of the purchase and sale agreement. I’ve heard through different resources that an escalation clause is allowed, and I’ve heard through other resources that escalation clauses are illegal. I’d just like confirmation one way or another and, if legal, how to compose such a clause so that it complies.

ANSWER: This practice is legal, BUT it is dangerous for a listing agent to do correctly and therefore troubles us for several reasons.

First, this puts the listing agent in a hazardous spot. It encourages a bidding war. He runs the very real risk of one of the buyers claiming that he “played favorites” with one over the others. As an agent, he has a duty to “diligently exercise reasonable skill and care in providing services to all parties to the transaction” (Tenn. Code Ann. 62-13-403(1)) and to “provide services to each party to the transaction with honesty and good faith.” (Tenn. Code Ann. 62-13-403(4)). This means that if you disclose the contents of one offer to one buyer, you must disclose the contents of all offers to all buyers! You could easily be caught up in an endless circle of offers and changed offers to try and get the house for the best possible deal. In addition, it only takes one frustrated buyer who did not get the property, and you could have a complaint filed against you.

Although they are legal, they are extremely difficult to do properly. Any thought that the contents of an offer would not have to be revealed after another offer is selected is not necessarily valid. This would still mean disclosing the contents of an offer to only one buyer, and that’s problematic.

The second problem arises in that an offer with an escalation clause may not form a contract because the sales price is vague and undefined. A court may look upon this as a deficient contract.

In the alternative, we recommend that a seller pick an offer and then counter back with a specific price. Another option, if the seller approves, is to return any offers with escalation clauses and state that the seller demands offers with firm sales prices.

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


9. HOT LINE: Payment to an Inactive Licensee?

QUESTION: If an agent within our office wishes to retire their license with several properties under contract, but they have not closed, are we still able to pay that agent who has retired their license compensation after the closing? We understand what TREC says about how to retire license, but need to clarify what completed means.

ANSWER: If the agent was licensed at the time that the contract under which she is owed commission was executed, then she may be entitled to receive a commission even though the agent’s license is retired or the license is inactive.

Commission is earned upon the signing of the lease, purchase and sale agreement, etc. Therefore, if she was licensed at that time, and if her independent contractor’s agreement or office policy dictates that she is to receive commission after leaving the company, she can receive it. You may simply pay her directly. You are not required to pay through another principal. Whether the payment is paid is up to your office policy or your independent contractor’s agreement.

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


10. Check Your Own CE Hours, Etc.

To check your CE credits on file with TREC, go to: http://verify.tn.gov

To go to the TAR website: http://www.tarnet.com

To access current and past TAR DIGESTS: http://www.tardigest.com

Follow TAR on Twitter at: http://twitter.com/tnaor

TAR’s LinkedIn page: http://www.linkedin.com/groups?gid=852077&trk=hb_side_g

TAR’s page on Facebook: http://www.facebook.com/pages/Nashville-TN/Tennessee-Association-of-RealtorsR/15041383689

To ask a TAR Legal and Ethics Hot Line question: http://www.tarnet.com/services-support/legal-ethics-hotline/

For CE classroom courses around the state, go to: http://www.tarnet.com/education/realtor-courses/

For online CE courses, go to: http://www.tarnet.com/education/online-courses/

Tennessee Real Estate Commission: http://tn.gov/regboards/trec/


 

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