The Weekly Membership Newsletter of the Tennessee Assn. of REALTORS


CONTENTS
1. HUD Releases New FHA, Conforming Loan Limits
2. NAR Predicts Stable Home Sales
3. HOT LINE: Paying Assistants
4. HOT LINE: Keeping Transaction Records
5. HOT LINE: Time Limit for Liens?
6. Ethics Videos Available FREE Online!
7. A FREE Intro to the E-Pro Program!
8. 30-Year Rates Move Lower
9. NO DIGEST Next Week


1. HUD Releases New FHA, Conforming Loan Limits

Last week, HUD published new FHA and conforming loan limits, based on median home prices as mandated by the Economic Stimulus Act signed by President Bush in February. New loan limits for FHA and Fannie Mae and Freddie Mac are now calculated at 125 percent of the HUD published median prices, with a floor of $271,050 and $417,000, respectively, not to exceed $729,750.

The Nashville SMSA – Davidson and surrounding counties – now has a loan limit for single-family homes of $432,500 for FHA, Fannie, and Freddie. Other areas in Tennessee have a FHA loan limit of $271,050 for single family homes.

NAR expects the impact on the housing market to be significant because of the infusion of capital into the mortgage market, which should result in lower interest rates across the board.

[SOURCE: HUD]


2. NAR Predicts Stable Home Sales

The volume of existing-home sales is expected to remain stable through late spring, with a gradual recovery during the second half of the year as the mortgage situation improves in high-cost areas, according to the latest forecast by the National Association of REALTORS.

Lawrence Yun, NAR chief economist, says many buyers have been waiting for higher mortgage loan limits.

“The higher loan limits for both FHA and conventional loans will increase consumer choice and provide greater access to lower interest rate mortgages in high-cost regions,” he says. “Therefore, a notable rise in home sales can be anticipated in the second half of the year.”

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in January, held at a stable level of 85.9, unchanged from December, but was 19.6 percent below the January 2007 reading of 106.8.

“This additional sign of a stabilizing market is encouraging, and our members are telling us there’s been a pickup in shopping activity,” Yun says. “Our hope is that the increased traffic of buyers looking at homes will translate soon into more contract offers.”

[SOURCE: NAR]


3. HOT LINE: Paying Assistants

QUESTION: I am still unclear as to how an assistant can or should be paid. By the REALTOR for whom they are working or by the company? And who is liable for the actions of an assistant?

ANSWER: It ALL depends upon whether or not the assistant is licensed.

An UNLICENSED assistant can be paid by anyone (the company, the agent, whoever), since an unlicensed assistant cannot perform any acts which require a license under the Broker’s Act. However, if the assistant is licensed, things change.

If the assistant IS performing ANY duties which require a license, she must be paid for those duties through the company. The statute which this is based upon can be found at Tenn. Code Ann. 62-13-312(11), which states that a licensee can be disciplined for “Accepting a commission or any valuable consideration by an affiliate broker for the performance of any acts specified in this chapter, from any person, except the licensed real estate broker with whom the licensee is affiliated”.

You also asked about liability. If the assistant is an employee, then the employer (whether it is the firm or an agent) can be held liable for the actions of an employee acting within the scope and course of their employment. If the assistant is an employee of the agent, then it is unlikely that the firm would held responsible. However, this is not guaranteed. If an agent or firm is considering hiring an assistant, we would recommend that they contact their general liability insurance carrier to discuss the issue with them.

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


4. HOT LINE: Keeping Transaction Records

QUESTION: How long do I have to keep inactive/unclosed transaction files?

ANSWER: Section 62-13-312(6) of the Brokers’ Act, that addresses records retention, provides that records relating to any real estate transaction shall be retained for three years from the date of its consummation.

According to the TREC, these records must contain, at a minimum, the following: listings; offers (including UNSUCCESSFUL offers); contracts; closing statements; agency agreements; agency disclosure documents; property disclosure forms; correspondence; notes; and any other relevant information.

Based upon issues that have arisen in the errors and omissions cases our firm has handled over the years, we strongly recommend that licensees keep each and every document that comes into their hands while representing a client or customer, regardless of whether they are working as sellers’ agents, buyers’ agents, or facilitators. It is VERY important to keep documents that evidence any contacts with clients, customers, cooperating agents, and/or inspectors. Such documents include email and FAX confirmations.

NOTE: Although the Brokers’ Act requires that records be retained for only three years, it is a good business practice for licensees and firms to maintain their records FOR AT LEAST SIX YEARS following the consummation of a transaction. Why? The statute of limitations for breach of contract actions is six years.

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


5. HOT LINE: Time Limit for Liens?

QUESTION: After a builder files a Notice of Completion, how many days thereafter do subcontractors have to file mechanics/materialman liens? If a lien is filed for work done prior to closing after said closing date, would the title insurance cover such?

ANSWER: GENERALLY speaking, a subcontractor on residential construction has 10 DAYS following the filing of the notice of completion (if the home is substantially complete). For commercial real estate, the time limit is 30 DAYS.

PLEASE NOTE, however, that this question should be answered within the title policy itself. Generally, title policies have exclusions for this type of situation.

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


6. Ethics Videos Available FREE Online!

All fifteen Code of Ethics Educational Videos from NAR are now available at Realtor.org. NAR launched its first ever on-line video series to highlight the principles and concepts established in the Code of Ethics, including the Preamble and the Standards of Practice.

You can use these 5-7 minute videos — and accompanying support materials — as a powerful and convenient tool to teach and learn about the Code and to convey how to better live by the principles of the Code. You can view the videos online, or download them by clicking HERE.

NOTE: IF you are retyping the above link, or it’s broken into two lines by your web browser, remember that no web address ever includes blank spaces. Any apparent blank spaces in the above address are underscore marks.

[SOURCE: REALTOR.ORG]


7. A FREE Intro to the E-Pro Program!

e-PRO is the only technology certification program offered by
the National Association of REALTORS!

Attend the upcoming FREE e-PRO Workshop to learn valuable tech
tips and how e-PRO will benefit you, plus receive a $25 discount for
your e-PRO course enrollment!

Date: Wednesday, March 26, 2008
****Select One Session****
Time: 9:00 AM to 10:30 AM OR 1:00pm to 2:30pm
Location: Tennessee Association of REALTORS
Address: 901 19th Avenue S., Nashville, TN 37212

Register Now! Seating is Limited!
To register, simply visit:
http://ePROworkshop.InternetCrusade.com
…or call toll free 1-866-ePRONAR (1-866-377-6627)


8. 30-Year Rates Move Lower

Freddie Mac says the 30-year fixed mortgage rate fell to 6.03 percent during the week ended March 6 from 6.24 percent the prior week. Interest on 15-year, fixed-rate mortgages also declined, falling to 5.47 percent from 5.72 percent over the same period. The five-year adjustable mortgage rate dipped to 5.34 percent from 5.43 percent, while the one-year ARM dropped to 4.94 percent from 5.11 percent. Freddie Mac chief economist Frank Nothaft attributed the decrease in mortgage rates to reports of weakness in the job market, manufacturing sector, and consumer confidence.

[SOURCES: Freddie Mac; Information, Inc.]


9. NO DIGEST Next Week

Due to the upcoming TAR Spring Business Meetings (March 17-18) and Spring Education Conference & Trade Expo (March 19-20), the TAR DIGEST will not be published next week. BUT we will return the Monday after Easter!


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