The Weekly Membership Newsletter of the Tennessee Assn. of REALTORS


CONTENTS
1. Rescuing Freddie and Fannie
2. The TAR Online Community!
3. HOT LINE: The Binding Agreement Date
4. HOT LINE: Confidentiality of Client Info
5. Don’t OVER-Systematize!
6. “For Sale” Becoming “For Rent”
7. Rates on 30-Year Mortgages Rise, Other Rates Mixed


1. Rescuing Freddie and Fannie

The Bush administration has outlined a plan to help Fannie Mae and Freddie Mac weather investor concerns about capitalization.  The administration expects the measures to be passed by Congress and signed into law by the president by the end of next week.

Under the plan, the government-sponsored enterprises would be able to trade certain assets for cash at the Federal Reserve’s discount window in the event of an emergency. Additionally, the Treasury secretary would be given authority to boost Fannie Mae and Freddie Mac’s $2.25 billion credit lines as necessary and negotiate terms under which the government would purchase their stock. According to Treasury Secretary Henry Paulson, “Use of either the line of credit or the equity investment would carry terms and conditions necessary to protect the taxpayer.”

“The National Association of REALTORS welcomes the strong response this weekend by the Treasury Department and the Federal Reserve Board in response to the market turmoil and apparent overreactions that began last week affecting Fannie Mae and Freddie Mac,” NAR President Dick Gaylord said in a statement.

Gaylord added, “The health of the American economy depends on Fannie Mae and Freddie Mac and the steps taken by the U.S. government make clear that the role of Fannie and Freddie, in making fair and affordable mortgage loans available for home owners and home buyers, must not and cannot be interrupted.”

[SOURCES: Washington Post; Information, Inc.; NAR]


2. The TAR Online Community!

There are TWO services on the TAR website through which ANY member can:

  • find answers to questions,
  • communicate with TAR staff and TAR leadership,
  • communicate with other TAR members and other members, and
  • comment on association services and/or the real estate business.

1.  Once you go to tnrealtors.com and then login at “Member Services” (the last item on the Home Page menu on the left-hand side), you can go to the COMMUNITY FORUM, where you can discuss a concern, post general questions or comments, answer someone ELSE’S question, etc. There, you’ll see discussion forums that are subject-specific (e.g., for forms-related comments or questions) as well as “anything goes” discussions.

2.  You can also go to HELP DESK & KNOWLEDGEBASE if you want to post a question privately to a member of the TAR staff or to a Hot Line attorney and get an answer. In this area, you can direct a question to any of several different departments. This area ALSO includes a number you can browse for reference.

When you get the chance, please explore BOTH of these services! Join the community!


3. HOT LINE: The Binding Agreement Date

QUESTION: When you have a binding contract agreement date, who inserts that date?

ANSWER: This is the date and time at which both Buyer and Seller have reached an agreement on the terms of the sale of real property.  This date and time shall be that point at which the last offeror, or licensee of the offeror, received notice of the offeree’s acceptance.

EXAMPLE:

Buyer made an offer to Seller on April 1, 2007 at noon.
Seller countered the offer to Buyer on April 3, 2007 at noon.
Buyer accepted Seller’s Counter on April 4, 2007 at noon.
Seller’s Agent received notice (i.e., the signed contract) from the Buyer on April 4, 2007 at 2:00 PM.
The Binding Agreement Date would thus be April 4, 2007 at 2:00 PM and would be inserted by the Seller’s Agent.

NOTE: There is a Binding Agreement date section on both form F9, the Purchase and Sale Agreement and form F8, the Counter Offer form. In the event that a counter offer is what was accepted, the Binding Agreement Date shall be placed on the Counter Offer form.  Basic key to this – the Binding Agreement Date is placed on the document (whether it be the offer or the counter offer) that is signed by both the buyer and the seller to create the contract.  In the above example, the Binding Agreement Date of April 4, 2007 at 2:00 p.m. would go on the Counter Offer which was signed by both Buyer and Seller.

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


4. HOT LINE: Confidentiality of Client Info

QUESTION: Are REALTORS or real estate companies held to any type of privacy laws? Here is my situation: We work with an out-of-state network that refers clients to us all of the time. We’ve also had some clients come to us that are not thru that network. However, due to a contract with that network we need to email them the new clients’ names to confirm that they are not now nor have they ever been in their network. But they have now emailed us back requesting phone numbers and addresses of these clients so that they can cross-reference that information. Before I release that to them, I want to make sure we are not violating any privacy laws.

ANSWER: The Brokers’ Act requires licensees to keep confidential any information obtained by the licensee which a party to the transaction would reasonably expect to be held in confidence. This duty survives closing of the transaction and the subsequent establishment of an agency relationship.

Also, Standard of Practice 1-9 of the NAR Code of Ethics requires REALTORS to preserve confidential information, and this duty continues after termination of any agency or non-agency relationship.  Under the Code of Ethics, information that should be kept confidential is defined by state law.  However, the Brokers’ Act and the Code of Ethics both exclude adverse facts (and latent defects) from information that must be kept confidential. Licensees have an affirmative duty to disclose such facts.

We would NOT advise disclosing the telephone numbers and addresses of any customers or clients without their approval.

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


5. Don’t OVER-Systematize!

While everyone routinely preaches about the need to “systematize” your business as much as possible — to make sure things don’t fall through the cracks — a new article on REALTY TIMES by writer Jennifer Allan wisely warns about overdoing it:

*** BEGIN QUOTE ***
We real estate agents love our systems, don’t we? If we can purchase a product that will help us streamline our prospecting efforts, we’re all for it. Where do I sign? But let me fly in the face of convention here and say … STOP! Stop with all the systems and programs and products!
Get Your Free Summer SALES Kit NOW!

Why? Because when pursuing business from the Very Important People Who Know You (that is, your Sphere of Influence or SOI), it’s important to make them feel special. And no system, program or product is going to do that FOR you. You actually have to do it yourself.
*** END QUOTE ***

To read the whole article, click HERE.

[SOURCE: Realty Times]


6. “For Sale” Becoming “For Rent”

*** BEGIN QUOTE ***
With the housing market in the tank, demand for rental units is increasing. But it looks like the supply of apartments also is rising quickly despite little new apartment construction.

According to a new report from Goldman Sachs’ U.S. Economic Research Group, about 1 million for-sale units were converted to rentals during the past two years (These are existing for-sale properties that are now being rented out, not new rental units). The new supply of rentals has so far kept rent inflation in check.

But the apartments could easily be put back on the for-sale market when home prices stabilize and that could slow the recovery, the report said.

“The shift of houses toward rental uses also points to another problem for the real estate market: a large amount of ‘shadow’ housing supply that could come back into the market at signs of improvement. Just as housing converted to rental, it can be converted back if demand shifts. Signs of price stabilization, or improvement, would be greeted by owners as an opportunity to bring homes back onto the for-purchase market. In addition to rental conversions, over the past two years there have been sharp increases in the number of homes either ‘held off the market for other reasons’ or ‘seasonally vacant’; the combined increases in the two compared to the start of 2006 is nearly a million homes. These sources of shadow supply make a robust ‘V’ shaped housing market recovery unlikely.”

*** END QUOTE ***

[SOURCE: Business Week]


7. Rates on 30-Year Mortgages Rise, Other Rates Mixed

Freddie Mac reports a slight jump in the 30-year fixed mortgage rate to 6.37 percent during the week ended July 10 from 6.35 percent the prior week. The five-year adjustable mortgage rate also moved up, climbing to 5.82 percent from 5.78 percent. However, the 15-year fixed rate fell to 5.91 percent from 5.92 percent; and the one-year ARM was unchanged at 5.17 percent.

Freddie Mac chief economist Frank Nothaft notes a higher-than-anticipated decline in the National Association of Realtors’ pending home index.

[SOURCES: Freddie Mac; Information, Inc.]


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