The Weekly Membership Newsletter of the Tennessee Assn. of REALTORS


CONTENTS
1. Survey Say Market Is Improving!
2. The Risks of Loan Assumptions
3. ALERT: To Continue Receiving the TAR DIGEST…
4. HOT LINE: Payment for BPOs
5. HOT LINE: Negotiating Repairs
6. HOT LINE: Disclosure of Total Commission?
7. Fixed Rates Rise Slightly


1. Survey Say Market Is Improving!

The newly-released PULSE Survey from REAL Trends polled 750 real estate industry leaders from across the country. In response to the statement that “Our market is showing signs of improvement as of the end of February 2008”:

64% either strongly or somewhat agreed,
21% were neutral, and
15% either strongly or somewhat disagreed.

This generally reflects the word-of-mouth testimonials we’re hearing from TAR members and firms in Tennessee. Hopefully, the majority will prove prophetic!

[SOURCE: REAL Trends]


2. The Risks of Loan Assumptions

The Legal Affairs Department of the National Association of REALTORS (NAR) has posted a new podcast (approx. five minutes long), featuring an interview with attorney Howell Haunson. The interview covers loan assumptions, their increasing prevalence and possible risks. You can access it by clicking HERE.

The NAR Legal Affairs podcast addresses current legal issues related to real estate professionals.

Despite the name, you don’t need an iPod to listen to a podcast. A podcast is simply an audio program that listeners can download to any computer or other device capable of playing audio files: desktop computer, laptop, MP3 player, iPod, PDA, cell phone, etc.

[SOURCE: NAR]


3. ALERT: To Continue Receiving the TAR DIGEST…

After MAY 1, 2008, you will ONLY receive the TAR DIGEST if you subscribe on your own, EVEN IF YOU HAVE RECEIVED IT BEFORE! Our existing list of subscribers can no longer be used after May 1, and we will NOT have the ability to add you to the list of subscribers, so it’s important that you subscribe yourself by May 1!!! You can subscribe anytime, from now on!

We WILL continue to send it out weekly – as we’ve done FOR WELL OVER 10 YEARS – just by a different method! And there will still be no charge for this service.

WHY CHANGE? Spam blockers and a growing number of company mail servers are now blocking the TAR DIGEST …making it increasingly difficult to send this newsletter, unsolicited, to all TAR members.

To subscribe to the DIGEST, simply use the “Get News By E-Mail” feature on this page. Once you enter your email address, you will then receive an email from with a link in it that you must ALSO click, to ACTIVATE your subscription request. This extra step protects you and others from having someone else subscribe your name without your permission!

We value your privacy! The TAR DIGEST will only be sent to subscribers, AND we do not release or sell the email addresses of subscribers to anyone else, for any reason!


4. HOT LINE: Payment for BPOs

QUESTION: Can BPOs (broker’s price opinions) fees be paid directly to an agent at the broker’s discretion?

ANSWER: NO. These BPOs are made pursuant to the individual’s license. Under the Appraisers Act, only licensed real estate agents are permitted to give these opinions as a part of their duties as an agent. Therefore, the BPOs must be paid through the principal broker.

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


5. HOT LINE: Negotiating Repairs

QUESTION: On the TAR Purchase & Sale Agreement, there is a place to insert a dollar amount for home repairs. On a contract, I usually put “TBD” or “as needed”, but my broker told me to put $0 and negotiate after the home inspection was done. They found some serious fire code and radon issues. My buyer agreed to handle the radon issue and requested the seller fix the fire code issue. The seller’s agent came back and said they were not paying for any repairs because $0 was on the contract. How do I handle this situation?

ANSWER: You should NOT put “TBD” or “as needed”. This means that the contract has a term that is not defined, and the contract COULD be deemed to be invalid. You indicated that another option would be to put $0 in the blank and then negotiate later pursuant to Section 3 of the Inspection section. This is perfectly fine. HOWEVER, you may encounter a situation in which the seller does not want to negotiate. It may be preferable to counsel your buyer to put in an actual dollar figure that the buyer would be comfortable with, given the condition of the property, and that the buyer believes the seller would accept. If necessary, you could then negotiate from that figure.

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


6. HOT LINE: Disclosure of Total Commission?

QUESTION: An agent has called me and asked what the total commission was on one of my listings. Isn’t it illegal and/or unethical to ask about a total commission?

ANSWER: We would NOT advise you to comply with their request. First, the total commission is part of a listing agreement between you and the seller, and might be considered confidential. This other agent is not a party to that agreement and doesn’t have a legitimate need to know that information.

Even a simple conversation regarding the total commission could also be misconstrued as an antitrust violation. To get a better understanding of antitrust issues, go to the NAR website. Then in the search function enter: antitrust. There are many great articles which provide a lot of guidance on this subject.

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


7. Fixed Rates Rise Slightly

National average ortgage borrowing costs were up for the week, reports Freddie Mac. According to the company’s figures, interest on 30-year fixed loans bumped up to 5.88 percent from 5.85 percent a week ago; while 15-year fixed loans climbed to 5.42 percent from 5.34 percent. Adjustable-rate products moved in the opposite direction, however, with the one-year ARM dipping to 5.19 percent from 5.24 percent and the five-year ARM sliding to 5.59 percent from 5.67 percent.

[SOURCES: Freddie Mac; Information, Inc.; RECON]


For information on using the TAR Legal & Ethics Hot Line, look under
“More TAR Services” at the TAR website:
http://tnrealtors.com