The Weekly Membership Newsletter of the Tennessee Assn. of REALTORS


CONTENTS
1. Don’t Overreact to Bad News!
2. Change is Good…
3. HOT LINE: Cash for Repairs at Closing
4. HOT LINE: Automatically Extending a Listing
5. Register Online for TAR Spring Ed. Conference
6. 2008 Forms Are Now Online
7. 30-Year Rates Hit 4-Year Low!


1. Don’t Overreact to Bad News!

National news reports about housing do not reflect market differences from region to region!

Going against the grain of the rest of the nation, the Northeast U.S. posted year-over-year home price GAINS of 2.1 percent during the fourth quarter of 2007 versus one year prior, according to a new survey by REAL Trends, the nation’s leading source of trends and analysis on the residential real estate industry. During this same time, prices in the Midwest, West and South decreased modestly.

“To fully understand this market, you need to look at both sides of the coin – closed home sales and home prices; then you need to analyze the trends,” Steve Murray, editor of REAL Trends, explained.

“Without a doubt, we’re seeing double-digit declines in home sales. Conversely, prices are actually firm, or in the case of the Northeast, have gone up. In the West, we’ve seen the biggest drop in sales. But to keep things in perspective, that region also saw the biggest run-up in terms of home prices during the boom,” Murray said.

REAL Trends’ analysis of closed home sales data is pulled from real estate brokers representing more than 35% of all homes sales throughout the country.

National sales figures may have been down in 2007, BUT – as RISMedia has pointed out – 2007 was STILL the fifth highest year on record!

[SOURCES: REAL Trends; RISMedia]


2. Change Is Good…

*** BEGIN QUOTE ***
It is time to ignore the negative media, to focus on our business plans and exciting opportunities, and to return to the basics of brokerage. We have withstood many cycles in past real estate markets, and we will ride this wave to new heights again.
*** END QUOTE ***

That’s a quote from a recent article on RISMedia, “Change is Good: How 3 Industry Insiders Plan to Thrive in Today’s Market.” It’s an interesting panel discussion between several industry leaders about what they see ahead, what it means, and what companies and salespeople should do to survive the present market and (re)build their businesses!

To read the entire article, go to:
http://rismedia.com/wp/2008-01-24/…

[SOURCE: RISMedia]


3. HOT LINE: Cash for Repairs at Closing

QUESTION: I have a purchase agreement wherein I represent the Buyer. The buyer has requested that some repairs be made to the property. The seller has agreed to pay for the repairs, but does not want to deal with getting them done. The seller wants to give the buyer a check at closing for $500 (the maximum repair amount in the contract). Is this legal or does it fall under the “no cash back at closing” provision of the law? If this is not legal, how can I handle the situation?

ANSWER: Most lenders will not approve cash back to the buyer at closing. So it is unlikely that the lender would approve having the seller cut a check to the buyer for $500 in lieu of repairs. You will need to get verification from the lender as to whether this will be acceptable to them or not. PLEASE NOTE that you will need to 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 funding the loan.

Many lenders consider this practice to be misrepresentation to the lender, if not mortgage fraud. If the lender will not approve the cash in lieu of repairs then we would suggest determining whether they would allow a payment to be made to the contractor at closing. The important thing to bear in mind is that the title company/closing attorney make the payment payable TO THE CONTRACTOR and not to the buyer.

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


4. HOT LINE: Automatically Extending a Listing

QUESTION: We are considering changing our listing agreement to add a clause automatically renewing the contract for one additional term, unless otherwise notified in writing before the first term expires. The seller would initial this area of the contract to acknowledge agreement. The listing would then be put into the MLS for the full two-term period. If the seller gave written notice to cancel the second term, it would be withdrawn from MLS. Is this legal?

ANSWER: This practice is legal in Tennessee, BUT we would recommend that you proceed with caution! We would also suggest having an attorney review this clause to make sure it complies with state law. Make sure that there is a definite termination date (i.e, expires 6/1/08 and then an additional 90 days if automatically renews). You must ALSO make sure the client understands what his/her responsibilities are concerning termination. Otherwise, you could find yourself with very upset and angry sellers who did not realize that they were automatically renewing their listing with you.

This scenario could well lead to problems with sellers stating that they did not understand. You’ll need to do everything in your power to make certain they understand their responsibilities and what this means.

SECONDLY, we would NOT advise placing this in the MLS for the full two terms. You do not know if you will have this listing for the two terms until prior to the expiration of the first term. This would be misleading. Only when you know that you will have the listing for the two terms may you put it in the MLS in this manner.

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


5. Register Online for TAR Spring Ed. Conference

The TAR Spring Education Conference and Trade Show will be held on MARCH 19TH AND 20TH! If you plan to attend ANY education session on the 19th and 20th (whether you need CE or not!), you MUST register in advance and pay a registration fee. Speakers at the Education Conference include DAVID KNOX and OLIVER FRASCONA! There will be NO “ON-SITE” registrations for the TAR Spring Education Conference and Trade Show, and SPACE IS LIMITED, so register early! Early Registration deadline is February 15th and the Member Registration Fee is $75.

[The TAR Business Meetings (which includes committee meetings, affiliate chapter meetings and the TAR Directors Meeting) is a STAND ALONE meeting this year and will take place on March 17th and 18th! Please be advised that you do not have to pay a registration fee, or even register if your are ONLY attending the TAR Business Meetings on MARCH 17th and 18th.]

To register, or get more information, go to:
http://tnrealtors.com/main/conferences_and_conventions/
…and click on “TAR Spring Business Mtgs & Educ”


6. 2008 Forms Are Now Online

As TAR’s Buzz Steele noted in a TAR Forms Update last week, as of Monday (Jan 28th), the new 2008 TAR standardized forms inventory are available through TransactionDesk and “Forms on the Fly” areas of the TAR web site.

Documentation regarding the changes will be available sometime next week.


7. 30-Year Rates Hit 4-Year Low!

Housing industry observers are hopeful that the recent decline in mortgage rates will lead to a recovery in the market. Freddie Mac reports that interest on 30-year, fixed loans fell for the fourth straight week, landing at their lowest level in nearly four years.

Economists say mortgage rates averaged 5.48 percent for the week ended Jan. 24 – down from 5.69 percent a week ago – because of the latest reports about the economy and because the Federal Reserve made its biggest cut in 20 years to a key interest rate. Freddie Mac also reports that rates on 15-year mortgages declined to 4.95 percent from 5.21 percent, rates on five-year adjustable-rate mortgages dropped to 5.13 percent from 5.4 percent, and rates on one-year ARMs slipped to 4.99 percent from 5.26 percent.

[SOURCES: Information, Inc.: Freddie Mac]


TAR’s Home Page for Tennessee REALTORS is at:
http://tnrealtors.com