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

1. Ins and Outs of Short Sales
2. HUD Clarifies Guidance on Tax Credit
3. HOT LINE: Reducing My Commission?
4. HOT LINE: A Conflict of Interest?
5. BEWARE: Lead Generation Companies
6. Fewer Than 200 To Go!
7. Upcoming Courses & Events!
8. Rates Rise

1. Ins and Outs of Short Sales

How much do YOU know about short sales? Since they now represent a significant portion of market activity in many areas, you should probably check your own Short Sales IQ to ensure that you’re at least familiar with the basics!

To help out, NAR’s REALTOR Magazine has posted an 8-question self-test online that you can take and discover what you know …or don’t know. It’s easy to take! To do so, go HERE.

TIP for Brokers: This could make a good exercise for your next sales meeting.

[SOURCE: REALTOR Magazine Online]

2. HUD Clarifies Guidance on Tax Credit

Late last week, HUD finally issued further guidance on using the first-time homebuyer tax credit as (part of) a buyer’s down payment:

Under the guidance, FHA-approved lenders can develop bridge loans that home buyers can use to help cover their closing costs, buy down their interest rate, or put down more than the minimum 3.5 percent.

The loans can’t be used to cover the minimum 3.5 percent, senior HUD officials told reporters on a conference call Friday morning.

Thus, buyers applying for FHA-backed financing with an FHA-approved lender that offers a bridge-loan program can get a bridge loan to bring down the upfront costs of buying a home significantly but would still have to come up with the minimum 3.5 percent downpayment.
*** END QUOTE ***

To read more, go HERE.

[SOURCES: REALTOR Magazine Online; HUD]

3. HOT LINE: Reducing My Commission?

QUESTION: I am getting requests from buyers whoare not represented by an agent.  They want me to compromise (reduce) the commission due to this fact. Is there something I can present to them showing that, regardless of whether they are represented or not, the full commission is paid?

ANSWER: There really isn’t a black and white rule that states that, if there is not a cooperating agent, the seller’s agent gets the entire amount of the commission. HOWEVER, the amount of the commission is payable to you by the seller regardless of whether there is another agent. This is addressed in the listing agreement; this information is confidential between you and your client. The listing agreement indicates that you can cooperate with other agents by listing it in the MLS and can offer a cooperative commission. We would recommend speaking to your clients about this since you must keep them informed of information that concerns their property. You can agree to cut your commission rate, but you do not have to do so.

The purchase and sale agreement is a separate contract to which you are NOT a party. Therefore, a reduction of your commission should not be addressed in this contract. Your commission and any cooperating commission that may be offered should be addressed in a separate agreement (i.e., the listing agreement or a cooperating commission agreement).

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

4. HOT LINE: A Conflict of Interest?

QUESTION: Is it a conflict of interest for the seller’s listing agent to use a remodeling company affiliated with the listing company to do repairs stipulated in the Buyers Contingency Removal Agreement that was signed by all parties?

ANSWER: This is permitted as long as it is FULLY disclosed and does not result in an unlawful kick-back under RESPA. Pursuant to Article 6 of the NAR Code of Ethics,

REALTORS shall not accept any commission, rebate, or profit on expenditures made for their client, without the client’s knowledge and consent. When recommending real estate products or services (e.g., homeowner’s insurance, warranty programs, mortgage financing, title insurance, etc.), REALTORS shall disclose to the client or customer to whom the recommendation is made any financial benefits or fees, other than real estate referral fees, the REALTORS or REALTORS’s firm may receive as a direct result of such recommendation.

Standard of Practice 6-1 states: “REALTORS shall not recommend or suggest to a client or a customer the use of services of another organization or business entity in which they have a direct interest without disclosing such interest at the time of the recommendation or suggestion.”

We would recommend that this is received in writing. Also, if there are concerns about whether this would create problem with the loan, then you need to consult the loan officer.

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

5. BEWARE: Lead Generation Companies

There are surely some good responsible lead-generation companies out there, but we encourage ALL members to thoroughly investigate any companies with whom they may do business. A company may promise delivery of “validated” or “qualified” leads, but they may have their own, very limited definition of “validated” or “qualified” …and you may end up paying a substantial amount of money for bona fide names, addresses, and phone numbers of people who are not really interested in buying or selling!  Without naming names, some of our members have been burned by lead-generation providers.

Investigate before you buy, ask for references from other REALTORS, and talk to other REALTORS about their experiences.

6. Fewer Than 200 To Go!

As of Monday, June 1, 803 specialty license plates for Tennessee REALTORs have been sold! As soon as 1,000 are sold, they can go into production!


Take pride in your profession and Celebrate Homeownership in Tennessee! For $35, you can put an attractive license plate on your car that tells everyone you help make the American dream a reality for Tennesseans. REALTOR license plates only cost $35 for a standard plate and $70 for a personalized vanity plate with 5 characters.

QUESTION: My license plate renews in September. Should I just wait to order my specialty plate then?

NO. None can be produced and distributed until 1,000 are sold. REALTORS who want a REALTOR license plate must PRE-ORDER them now on-line and they will receive a NEW renewal date and a PRO-RATED renewal amount with their county clerk’s office based on when the plates are shipped. The only cost to the licensee is the COST OF THE PLATE not the full vehicle’s registration.

For more information, go to the NEWSROOM section of the TAR website (at and scroll down to see the License Plate, and order one online! There you can also access a one-page information sheet with more Frequently Asked Questions about the Plates.

7. Upcoming TAR Courses & Events!

June 11: TAR Forms 101 (Nashville, TAR Office), 4 hours CE. For more information, go HERE.

June 11: TransactionDesk Basic Course (Nashville, TAR Office), 3 hours CE. For more information, go HERE.

A Special Event for Educators & Instructors: On July 28-29, TREEF will host its Educators Conference 2009, an annual with sessions and workshops for instructors and association staff. For more information, go HERE.

Instructor-Training: On August 27-28. we will hold another offering of our popular two-day instructor-training workshop, “The Learning-Centered Instructor”, at the TAR Office in Nashville, accredited for 16 hours of CE. For more information, go HERE.

Watch each week’s TAR DIGEST for schedule changes and additions!

8. Rates Rise

Sad but true. Freddie Mac reports that interest on long-term mortgages rose this past week. According to the firm, 30-year fixed loans came in last week at an average rate of 4.91 percent, up from 4.82 percent a week earlier; while 15-year fixed mortgages settled at 4.53 percent compared to 4.5 percent over the same period. Interest also was higher on five-year adjustable-rate mortgages, which bumped up to 4.82 from 4.79; but the one-year ARM slipped down to 4.69 percent from 4.82 percent.

The increases are the byproduct of a big jump in yields on long-term Treasury bonds, which impact the cost of home loans.

[SOURCES: Freddie Mac; Wall Street Journal; Information, Inc.]

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