The Weekly Membership Newsletter of the Tennessee Assn. of REALTORS
Editor: Pug Scoville


CONTENTS
1. Consumers Want To Be Respected, Not “Captured”
2. DEADLINE This Week for Convention Savings!
3. HOT LINE: Bonuses & Compensation Changes
4. HOT LINE: Advertising on Craigslist
5. HOT LINE ADVISORY: Gifts and Prizes
6. TAR DIGEST & FORMS ETC. Newsletters
7. Rates Go Lower


1. Consumers Want To Be Respected, Not “Captured”

For several years, countless real estate speakers and Internet gurus have advised REALTORS on better ways to “capture” consumers.  Recognizing that most buyers now BEGIN the home-buying process on the Internet, everyone wants to secure these buyers as clients (or as prospects that they can refer, for a fee, to someone else) at the earliest possible opportunity!

In response to this trend, Broker Teresa Boardman expresses both common sense and caution in an editorial that appeared last week on Inman News, “Consumers don’t want to be ‘captured'”:

*** BEGIN QUOTE ***
Realtors are taught to “capture Internet leads,” and few question the concept. If I look at it from a consumer’s point of view it sounds scary to me. I picture agents hiding behind their bus benches and jumping out when a consumer walks by. What do they do with the lead when they capture it? Do they have a room somewhere full of the people they captured?
*** END QUOTE ***

To read the whole article, go HERE.

[SOURCE: Inman News]


2. DEADLINE This Week for Convention Savings!

In order to receive the discounted registration fee for the upcoming TAR Annual Convention in Chattanooga, the TAR Office MUST receive your registration BY FRIDAY, JULY 25!

In addition to an exciting Keynote Address, this 2008 Convention program features SIX national speakers to help you build — or REbuild — your business!

The current MEMBER registration fee is $175 ($155 for online registrations). After July 25, the MEMBER registration fee goes to $255!!!  So save $100 and register THIS WEEK!

REMEMBER: Registering online will save $20.00.  Members can register online at tnrealtors.com and clicking on the “Conferences and Conventions” link or by going directly HERE.

HOTEL INFO: The cutoff date for the discounted hotel rate is August 26 (UNLESS the room block is filled before that date).  After Aug. 26 or if the room block fills up earlier than that, any rooms may only be available at the standard rate.  You can make your hotel reservations by calling the Chattanooga Marriott at 800-841-1674.


3. HOT LINE: Bonuses & Compensation Changes

QUESTION: I had a closing yesterday and there was bonus dispute. Does the fact that the transaction closed affect the bonus? Should bonuses even be included on contracts? Can an offered bonus be changed in the MLS halfway through a transaction?

ANSWER: In our opinion, if the agent offered the bonus, then it would be treated as a cooperative commission. Neither the commission split nor the bonus should be included in the contract. This should be in a separate agreement from the purchase and sales agreement as it is an agreement between the agents and not the buyer and seller.

If you are going to change the offer of compensation or bonuses, you MUST communicate that to the other agents. Pursuant to Standard of Practice 3-2 of the NAR Code of Ethics, “REALTORS shall, with respect to offers of compensation to another REALTOR, timely communicate any change of compensation for cooperative services to the other REALTOR PRIOR TO the time such REALTOR produces an offer to purchase/lease the property.”

The two agents, however, are free to renegotiate the commission and/or bonus in order to make the sale go through, but both agents must agree.

If you feel that you were not paid what you were owed, then your principal broker can request an arbitration with the local REALTOR association.

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


4. HOT LINE: Advertising on Craigslist

QUESTION: I see many REALTORS advertising their listings on “Craigslist.” Some just use their first name and phone number, others have nice flyers with their name and number, but rarely have I seen the office name and office phone number listed in any of the advertisements. Shouldn’t that information be included, even in an ad in Craigslist?

ANSWER: YES. TREC does have a rule — TREC Rule 1260-2-.12 — on advertising, which requires that an agent, at a minimum, include their firm name and telephone number in all of their advertising (whether it is in Craigslist or another publication, online or printed).  I have included an excerpt for your convenience:

***BEGIN QUOTE ***
TREC Rule 1260-2-.12
(1) All advertising, regardless of its nature and the medium in which it appears, which promotes the sale or lease of real property, shall conform to the requirements of this rule.
(2) General Principals
(a) No licensee shall advertise to sell, purchase, exchange, rent, or lease property in a manner indicating that the licensee is not engaged in the real estate business.
(b) All licensees shall advertise under the firm name offers to purchase, sell, rent, or lease any property.  All advertising shall be under the direct supervision of the principal broker and shall list the firm name and telephone number….
*** END QUOTE ***

Remember, AT A MINIMUM, the firm name and telephone number is required on ALL advertising, and the advertisements cannot be misleading or untruthful.

This could be a good topic to review at your next sales meeting!

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


5. HOT LINE ADVISORY: Gifts and Prizes

A LARGE number of inquiries to the TAR Legal & Ethics Hot Line every week revolve around the issue of gifts and prizes and what may or may not be offered as inducements to purchase, or offered in gratitude for referrals.

You CAN give non-licensees a gift in order to induce them to do business with you under specified conditions (see below). Please note that the gift must be as an inducement for THEM (not their friends, family members, etc.) to do business with you. In other words, you cannot give a gift to someone to thank them for referring a customer to you unless they are a licensed agent. If you wish to proceed in doing this, you will have to follow the Gifts and Prizes rule.

TREC Rule 1260-2-.33 states:

*** BEGIN QUOTE ***
(1)  A licensee may offer a gift, prize, or other valuable consideration as an inducement to the purchase, listing, or lease of real estate only if the offer is made:
(a) Under the sponsorship and with the approval of the firm with whom the licensee is affiliated; and
(b) In writing, signed by the licensee, with disclosure of all pertinent details, including but not limited to:
1. accurate specifications of the gift, prize, or other valuable consideration offered;
2. fair market value;
3. the time and place of delivery; and
4. any requirements which must be satisfied by the prospective purchaser or lessor.
*** END QUOTE ***

Also PLEASE be aware that under the new state law, these gifts may NOT take the form of cash or converted into cash in any way.  The new statute states: “A real estate licensee shall not give or pay cash rebates, cash gifts or cash prizes in conjunction with any real estate transaction.  As part of the Tennessee Real Estate Commission’s general rulemaking authority the commission may regulate the practices of real estate licensees in regard to gifts, prizes or rebates that are not otherwise prohibited by law.”  — Tenn. Code Ann. 62-13-302(b)

Therefore, you are permitted to give gift cards, for example, but you must make sure that they cannot be converted into cash in any way and in any amount. You are permitted to give a gift certificate for a cruise, but that gift certificate cannot be redeemable for cash.

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


6. TAR DIGEST & FORMS ETC. Newsletters

As a service to all TAR members, the weekly TAR DIGEST and the periodic newsletter on TAR Forms (FORMS ETC.) are BOTH now being published through the TAR DIGEST website. Fully searchable back issues of each will also be maintained at that site (www.tardigest.com).

Once you subscribe through the TAR DIGEST website — as we’ve suggested all TAR members do — you will receive BOTH newsletters!

A few folks have called the TAR office to follow up on an article in one of the newsletters, without knowing who to ask for. Although ALL of the newsletters will arrive showing Pug Scoville’s address as the sender, the Editor of each is listed below:
TAR DIGEST: Pug Scoville
FORMS ETC.: Buzz Steele


7. Rates Go Lower

Freddie Mac reports a drop in the 30-year fixed mortgage rate to 6.26 percent during the week ended July 17 from 6.37 percent the prior week, marking a six-week low. Over the same period, interest on 15-year fixed loans fell to 5.78 percent from 5.91 percent.

The declines are attributed to analysts’ expectations that the Federal Reserve will hold rates steady at its next meeting, given that Chairman Ben Bernanke recently has underscored the need to balance inflation concerns and the economic downturn.

[SOURCES: Freddie Mac; Information, Inc.]


TO SUBSCRIBE to the TAR DIGEST: Simply go to the TAR DIGEST website at www.tardigest.com with your web browser, and look down the left-hand column of that page for “Get News By E-Mail“. Click on that and follow the instructions.

After entering your email address, you will receive an email from the system () with a link that you MUST click on, to activate your subscription.  Thanks!

TAR’s Home Page: http://tnrealtors.com