The Weekly Membership Newsletter of the Tennessee Assn. of REALTORS


CONTENTS
1. IRS Increases Mileage Rates!
2. Competing Buyers & Dual Agency
3. HOT LINE: Buyer Won’t Sign Agency Agreement
4. HOT LINE ADVISORY: Transferring Listings
5. NAACP Targets Discriminatory Lending Practices
6. BOA Finalizes Purchase of Countrywide
7. Interest Rates Drop


1. IRS Increases Mileage Rates!

On June 23, the Internal Revenue Service announced an increase in the optional standard mileage rates for the final six months of 2008. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

The rate will increase to 58.5 CENTS A MILE for all business miles driven from July 1, 2008, through Dec. 31, 2008. This is an increase of eight (8) cents from the 50.5 cent rate in effect for the first six months of 2008, as set forth in Rev. Proc. 2007-70.

In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2008. The IRS normally updates the mileage rates once a year in the fall for the next calendar year.

[SOURCE: IRS]


2. Competing Buyers & Dual Agency

A year ago in the TAR DIGEST, we highlighted a REALTY TIMES article by columnist Bob Hunt on the possibility of dual agency when two or more buyers, represented by licensees in the same firm, compete for the same property.

Last week, Bob Hunt described yet another case, underscoring the wisdom of caution when one office finds itself in this situation.

*** BEGIN QUOTE ***
Usually, when there is talk of dual agency in real estate one has in mind a situation where both buyer and seller are represented by the same agent. The problem, presumably, is that it is difficult, if not impossible, for the same agent to represent parties that have competing interests. (Note: Dual agency is not illegal, but it does require disclosure and the consent of principals.) But buyers and sellers aren’t the only ones in the marketplace who have competing interests. Consider the case of different buyers who want the same property. In some areas around the country today REO sales are eliciting multiple offers. Can the same agent represent different buyers in such situations?
*** END QUOTE ***

To read the full article, click HERE.

[SOURCE: REALTY TIMES]


3. HOT LINE: Buyer Won’t Sign Agency Agreement

QUESTION: I have a buyer that had a bad experience in the past and they do not want to sign an exclusive agreement. If we don’t have a Buyer’s Representation Agreement, are we legally their agent? If they refuse to sign the Buyer’s Representation Agreement and there is a problem and it comes to our E & O, can we be held liable?

ANSWER: If you do not have a buyer’s representation agreement that creates an agency relationship between the firm and the buyer, then you are NOT the buyer’s agent. [A disclosure form will also NOT make you their agent, and without a signed agreement you should NOT represent yourself as the buyer’s agent on the confirmation form that usually accompanies any offer.] Without a signed agreement, you are a facilitator, but as a facilitator you may still help the buyer purchase a property.

Even if you are not the buyer’s agent, you may STILL be held liable for your actions as a facilitator. You still owe the buyer all of the duties under Tenn. Code Annotated 62-13-403, under TREC Rules and other applicable portions of the Broker’s Act, and under the REALTOR Code of Ethics.

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


4. HOT LINE ADVISORY: Transferring Listings

This is a follow-up on a recent HOT LINE Question-and-Answer regarding the transfer of listings from one firm to another:

Listings belong to the firm not the agent. Therefore, you are only permitted to take listings with you if you have permission of the broker. Pursuant to TREC Rule 1260-2-.02(2), “When a licensee terminates his affiliation with a former firm, he shall neither take nor use any property listings secured through the firm, unless specifically authorized by the principal broker.” Therefore, if the principal broker of the firm releases the listings to you, then you may take them with you. If the principal broker is coming with you, then it would be our opinion that you need the permission of the owner of the company as well.

There are several different ways to transfer the listings. The first way is to have the previous broker to write a letter on their letterhead to the new broker, the Association’s office, and the MLS that the broker has transferred the listing to the new office effective on a particular date. Then, the new office should complete new paperwork with the seller establishing the listing with that new company. It is probably a good idea to carry over the same terms and not extend the time frame, but this is a choice for the new broker and seller. Another method is to have the original broker and the seller to do a complete release of listing. This can be accomplished with TAR Form F82. This will terminate the original listing. Then the new company can enter and complete a new listing agreement between themselves and the seller.

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


5. NAACP Targets Discriminatory Lending Practices

Last week, the TENNESSEAN newspaper reported on the NAACP’s campaign to battle discriminatory lending practices.

The NAACP sought to bring more attention to the disproportionate number of African Americans with subprime or high-cost loans by declaring a national “Day of Action” against discriminatory lending practices. Branches in New York, Los Angeles, Baltimore, San Antonio, Nashville, and 16 other cities participated in the event.

On July 11, the NAACP plans to mark the one-year anniversary of its federal civil suit filed against 17 of the nation’s largest mortgage lenders. The litigation claims that African-American borrowers that had the same incomes and credit histories as whites were 30 percent more likely to be offered a subprime or high-cost loan.

For the full story, click HERE.

[SOURCES: The Tennessean; Information, Inc.]


6. BOA Finalizes Purchase of Countrywide

On July 1, Bank of America finalized its acquisition of Countrywide Financial Corporation. The buyer is now the nation’s top originator and servicer of home loans, with a firm grasp on 20 percent to 25 percent of the U.S. mortgage market. The value of the all-stock deal has eroded to $2.5 billion from approximately $4 billion in January, reflecting a decline in Bank of America’s share price.

[SOURCE: Information, Inc.]


7. Interest Rates Drop

Freddie Mac’s Primary Mortgage Market Survey showed the 30-year fixed-rate mortgage (FRM) averaging 6.35 percent with an average 0.6 point for the week ending July 3, 2008, down from the previous week when it averaged 6.45 percent. Last year at this time, the 30-year FRM averaged 6.63 percent.

The 15-year FRM averaged 5.92 percent with an average 0.6 point, also down from the prior week when it averaged 6.04 percent. A year ago at this time, the 15-year FRM averaged 6.30 percent.

Frank Nothaft, Freddie Mac vice president and chief economist. attributed the drop to the release of the latest Federal Reserve policy statement that it expects inflation to moderate later this year, as well as other factors.

[SOURCE: Freddie Mac]


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