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


CONTENTS
1. Home Prices May Be “Bottoming Out”
2. Life is Sweet in Tennessee!
3. Twitter Power!
4. HOT LINE: Signing for Another Agent?
5. HOT LINE: Requiring a Particular Lender?
6. To Use the TAR Hot Line
7. Upcoming TAR Courses & Events! — Save $80 0n TAR Convention!
8. Rates Rise Slightly, But Still Very Low

To ask a TAR Legal & Ethics Hot Line question, see item 5 Below.

For questions about this newsletter, please use the “CONTACT” form HERE.


1. Home Prices May Be “Bottoming Out”

New data suggests that declines in home prices may be coming to an end. In some parts of the U.S., they have already ended.

U.S. home values dropped in May by the slimmest margin in 10 months, according to the Federal Housing Finance Agency (FHFA). The FHFA index showed that residential prices slid 5.6 percent from a year earlier, but rose 0.9 percent from the previous month, thanks to activity in the West. The gauge differs from the more volatile Case-Shiller measures, which factor in subprime and jumbo mortgages whereas FHFA considers only properties with conforming loans.

[SOURCES: Investors Business Daily; Information, Inc.]


2. Life Is Sweet in Tennessee!

Forbes Magazine looked at the 100 least expensive places to live in the U.S. It ranked all 380 metropolitan areas based on cost-of-living data from Moody’s Economy.com and home affordability from the National Association of Home Builders and Wells Fargo.

The magazine also factored in four quality-of-life considerations, including the rate of violent crime, unemployment, average salary for college grads, and cultural opportunities.

The TOP TWO CITIES in the East South Central region of the U.S. are:

    1. Knoxville, TN
    2. Chattanooga, TN

We always love it when others discover what we’ve known all along: life is sweet in Tennessee!

[SOURCES: REALTOR Magazine Online; Forbes Magazine]


3. Twitter Power!

The National Association of REALTORS (NAR) — in its Weekly Book Scan — gave a positive review to a new book that should answer the following questions:

“Okay, what’s all the fuss about Twitter? Do I really need to tweet? Isn’t this just a passing fad? Can Twitter REALLY help my real estate business?!?”

The book is called Twitter Power: How to Dominate Your Market One Tweet at a Time, and it has received a number of very positive reviews. So, if you would like to explore it for yourself, you can find it on Amazon HERE.

[SOURCE: NAR]

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4. HOT LINE: Signing for Another Agent?

QUESTION: Recently I attended a closing where the agent for the seller was not in attendance. In her place, the list agent sent a proxy (who was also a licensed real estate agent from her office) to handle their side of the closing. At closing, there were a couple of key transaction documents missing her signature which we needed to make our brokerage files complete. Her proxy suggested, to my surprise, that he could sign these documents for her. My take on this was that unless he had legal authority to sign for her (using an instrument such as, possibly, limited power of attorney) that he did not have the legal authority to do so. Therefore, I held the documents and transmitted them to the list agent for signing. Under what circumstances, if any, can another agent sign documents for another agent?

ANSWER: It is important to understand that the answer to this question will depend upon several things. First, IF the company practices regular agency (and not designated agency), then all of the agents in the company represent that seller, not just the one with whom they have been working. Therefore, any agent in the company could accompany the seller to closing and sign his/her own name to the documents as agent for the seller.

IF, on the other hand, the company practices designated agency, then the principal broker could appoint another agent in the company to be a designated agent on their behalf in the event that the original designated agent was unavailable. This would need to be done in writing with a disclosure made to all parties.

This is completely different than signing on behalf of the buyer or seller in a transaction! This would require a power of attorney. We do not recommend that real estate agents agree to do this for their clients. This puts the agent in a dangerous position If the agent does something which binds their client to terms which they are unhappy, the agent could face a lawsuit. Therefore, if you have a client who is unavailable, we would recommend that they have a third party represent their interests at the closing through the use of a power of attorney.

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


5. HOT LINE: Requiring a Particular Lender?

QUESTION: We have been encountering builders REQUIRING the use of their “Preferred” lenders. Can a seller/builder legally refuse to sell a property to a buyer who will not use the seller’s preferred lender? Is it okay for the builder to withhold incentives if the buyer does not use their lender? We know that these relationships result in financial gain in some form or fashion for the sellers/builders, and our buyers are concerned with the validity of this practice. One of our agents was told by a builder rep that there was “recent legislation” that makes all of these practices unrestricted and perfectly legal. Is this so? My understanding has always been that a seller/builder could contractually require the buyer to pre-qualify with the preferred lender but could not require that Buyer actually USE that lender for the financing.

ANSWER: Builders are permitted to offer incentives to buyers to use their preferred lenders. However, they ARE NOT allowed to require them to use those lenders if the buyers are purchasing the homes. We think that the confusion came in because earlier this year, HUD was trying to get a stricter rule in place. That rule has since been withdrawn, leaving the former rule in place. The rule currently in place states:

“Required use means a situation in which a person must use a particular provider of a settlement service in order to have access to some distinct service or property, and the person will pay for the settlement service of the particular provider or will pay a charge attributable, in whole or in part, to the settlement service. However, the offering of a package (or combination of settlement services) or the offering of discounts or rebates to consumers for the purchase of multiple settlement services does not constitute a required use. Any package or discount must be optional to the purchaser. The discount must be a true discount below the prices that are otherwise generally available, and must not be made up by higher costs elsewhere in the settlement process.” (24 CFR 3500.2(b)) …Emphasis added

This means that the builder can offer the incentive, but cannot require that this particular lender be used. In addition, any discounts offered must be true discounts.

HUD has a great breakdown of the RESPA rules. You can find this information at: http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm.

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


6. To Use the TAR Hot Line

The TAR Legal & Ethics Hot Line service is designed to answer members’ real estate related legal questions, as well as questions concerning the REALTOR Code of Ethics.

PLEASE NOTE: It’s NOT intended to provide legal advice or assistance to your clients and customers. They should seek their own legal counsel.

Hours of Operation: M-F, 9:00AM – 5:00PM CST
Local to Nashville: 244-3344
Not Local: 800-899-5297
E-mail:

TAR members can ALSO use the “HELP DESK” for communicating with both the Legal & Ethics Hot Line Staff and TAR Staff. [Login under the “Member Services” navigation link on the TAR website at http://tnrealtors.com]

To email a legal or ethics question to TAR’s Hot Line, you must include your full name, firm name, broker’s name, and local association name and then send your question to:

IMPORTANT: Put “Hot Line Question” in the Subject line of your email! And do NOT email attachments with any Hot Line questions. Any attachments may cause your email to be deleted without being read.

Please note that your Managing Broker will always be copied on the response to any help request forwarded to the TAR Legal & Ethics Hotline. In addition, any inquiry handled by the TAR Legal & Ethics Hot Line does not result in attorney-client relationship.


7. Upcoming TAR Courses & Events!

Educators Conference 2009July 28-29 (Nashville, TAR Office). This annual event, hosted by TREEF, features education sessions and workshops for association staff & Instructors. For more information, go HERE.

Instructor-Training WorkshopAugust 27-28 (Nashville, TAR Office), 16 hours CE. This is another offering of our popular two-day instructor-training workshop, “The Learning-Centered Instructor”, at the TAR Office in Nashville. For more information, go HERE.

TAR’s 2009 Annual Convention!September 15-18 (Point Clear, AL), 12 hours CE. TAR will be hosting the 2009 TAR Annual Convention in Clear Point, Alabama, at the Grand Hotel Marriott Resort, Golf Club, & Spa. National speakers include real estate guru Stefan Swanepoel, Karel Murray, Internet-savvy Randy Eagar, and productivity wizard Merlin Mann! For more information about the Convention program or our hotel in Point Clear, go HERE.

PLEASE NOTE: SAVE $80!!! Early-bird registration deadline for the TAR Convention is July 28! Register by July 28 for $195 …the fee jumps to $275 after that date!

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


8. Rates Rise Slightly, But Still Very Low

Freddie Mac reports that the average rate for a 30-year fixed mortgage this week rose to 5.2 percent from 5.14 percent a week ago. Industry professionals are keeping close watch on the rate, hoping it does not climb too high and derail a recovery in the housing sector. The National Association of REALTORS confirms that sales of previously occupied residences increased for the third consecutive month in June — something that has not happened in more than five years.

[SOURCES: Freddie Mac; Information, Inc.]


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

Members receive the TAR DIGEST automatically, through their email address in NRDS. Non-members (such as Office Managers) may subscribe at: http://www.tardigest.com

Back issues of the DIGEST may be viewed and searched at: http://www.tardigest.com