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


CONTENTS
1. Advice for Frustrated Clients
2. Tennessee Good Neighbor Recognized!
3. HOT LINE: Submitting Verbal Offers
4. HOT LINE: HOA Restriction Disclosure
5. HOT LINE Advisory: “Fixing” Commission Splits
6. TREEF Trustee Nominees Announced
7. Rates Hold Steady


1. Advice for Frustrated Clients

A new article by Kathleen Lynn, published on RISMedia, does a nice job of recapping the reasons you might give a seller-client as to why their home is STILL on the market after a longer-than-average listing period. There ARE some buyers in the market, but there are a lot of properties to pick from! Titled “8 Reasons Your Home Hasn’t Sold Yet – Advice for Frustrated Clients”, Ms. Lynn’s article may give you some good talking points for that next difficult conversation with your seller:

*** BEGIN QUOTE ***
David Raimondi put his 100-year-old Allendale, N.J., house and barn on the market, asking $525,000. It’s been almost three years, and the property has still not sold.

Raimondi, a housepainter who wants to move to a less expensive area, is one of the growing ranks of frustrated sellers whose homes have been on the market for more than a year. Though most sellers don’t stay on the market for years, Realtors say the average time between listing and sale has stretched out during the housing slump.

These sellers’ experiences show just how tough the market is. Still, real estate agents say, there are buyers out there, and it’s possible to sell a property if you take the right steps.
*** END QUOTE ***

To read the complete article, click HERE.

[SOURCE: RISMedia]


2. Tennessee Good Neighbor Recognized!

Mary E. Bacon, a REALTOR with Bob Parks Realty in Mt. Juliet and a member of the Eastern Middle Tennessee Association of REALTORS, has been named one of the ten (10) NATIONAL finalists for the National Association of REALTORS’ Good Neighbor Award!

Mary was recognized for her work with the Mt. Juliet Help Center. The Mt. Juliet Help Center provides food and assistance to those in need. In 2006, after serving the community for decades, the Center lost its lease and was forced to shut down. But Bacon knew the need for the Center was great, so she located office space and manned the Center herself for 6 months in a 10×12-foot room. By 2007, Bacon had persuaded the community to donate land and a modular building to give the Center a permanent home. Today, with Bacon as president, the Center has two employees and serves 400 families a month with food and emergency assistance for utility bills, gas and prescription medicine.

Thanks and congratulations to Mary Bacon!


3. HOT LINE: Submitting Verbal Offers

QUESTION: What is the law regarding presenting “verbal” offers? I highly object to them and tell buyers that there’s much more to an offer than price, etc. and 99% of the time I am able to get things in writing. But every now and then, I get a buyer who insists on making a verbal offer. What are the rules regarding my responsibility to present these offers (sometimes they are ridiculous)?

ANSWER: A verbal offer is technically a valid offer. However, we do not recommend doing this. We always recommend having offers presented in writing. This is because a contract for the sale of land in Tennessee must be in writing to be enforceable under the statute of frauds.  Furthermore, it must be signed by the person against whom it is to be enforced. In addition, there are so many different items to be addressed in the sale of real estate, that the offer should be in writing so that there are no disputes as to what the offer is.

You ARE, however, required to submit ALL offers. Pursuant to Standard of Practice 1-6 of the NAR Code of Ethics, “REALTORS shall submit offers and counter-offers objectively and as quickly as possible.”

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


4. HOT LINE: HOA Restriction Disclosure

QUESTION: I sold a condo recently, representing the buyer. I asked the listing agent if the property could be rented, and she said it could be; the MLS stated the same. I asked for the HOA docs from the listing agent, and they stated it could be rented. However, there was an amendment to the HOA docs and now the new owner can’t rent it. Should I have gone to the HOA to request the docs? The seller was actually on the HOA board and was aware of the restriction, but did not disclose such in the property disclosure. Do you have any suggestions on how to handle this matter?

ANSWER: You were completely reasonable to rely upon the information provided to you by the seller’s agent. Unless there was a reason for you to question the validity of the information you received or you told your buyer that you would get the information from the HOA, then you would likely not face any liability for this.

However, please be aware that there has been a new condo law passed which will go into effect on January 1, 2009. This law will make it much easier to get this information in the future. Under the new law, the seller must disclose the contact information of the HOA. Then, any prospective buyer or buyer’s agent can request, in writing, a CURRENT copy of these types of documents. TAR is working on a form for this purpose.

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


5. HOT LINE Advisory: “Fixing” Commission Splits

AIt has been a while since we reminded everyone that brokers in a community may NOT agree on “commission splits” without violating federal antitrust laws! Just as with commission rates, fixing commission splits by common agreement is another form of price-fixing:

*** BEGIN QUOTE ***
A per se illegal price fixing conspiracy can involve not only the prices a firm charges customers or clients, but also the fees it pays for goods and services. In particular, listing brokers may not agree on the commission “split” to be paid to compensate cooperating brokers who produce a ready, willing and able buyer for a listed property. Conspiracies among competitors to fix the compensation paid to cooperating brokers may also be deemed per se illegal. For this reason, brokers must determine their cooperative compensation policies in the same unilateral and independent manner that they establish the commission or fees charged to clients. Listing and selling brokers may, of course, have occasion to discuss or negotiate the compensation they will pay to each other in connection with individual transactions. These negotiations, however, generally take place before an offer to purchase has been procured by the cooperating office, and in any event should never include a representative of a third office.
*** END QUOTE ***

For a more complete review of antitrust law, go HERE.

[SOURCE: NAR’s Legal Affairs Department]


6. TREEF Trustee Nominees Announced

Nominations for Trustees of the Tennessee Real Estate Educational Foundation (TREEF) were announced last week by the TREEF Nominating Committee. The Foundation is governed by fifteen Trustees, most of whom serve staggered 3-year yerms.  The following were nominated for 3-year terms: Clarissa Hills (Kingsport), Sue Harris McClain (Jackson), Bobbie Noreen (Nashville), and Trasbin Stoner (Nashville). Outgoing TREEF President Sandra Tanksley (Brentwood) was nominated for a 1-year term.

Congratulations to the nominees!


7. Rates Hold Steady

Freddie Mac reports that the 30-year fixed mortgage rate held steady at 6.52 percent during the week ended Aug. 14. However, rates on 15-year fixed loans fell slightly to 6.07 percent from the prior week. Meanwhile, the five-year adjustable mortgage rate dipped to 6.05 percent, and the one-year ARM dropped to 5.18 percent.

[SOURCES: Freddie Mac; Information, Inc.]


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