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


CONTENTS
1. ALERT: Rental Property Scams
2. Tax Credit Extended!
3. HOT LINE: Suing a Buyer for Commission?
4. HOT LINE: A RESPA Violation?
5. HOT LINE ADVISORY: Agency Law
6. Upcoming Courses & Events!
7. Rates Low, Stable

To ask a TAR Legal & Ethics Hot Line question, go HERE.

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


1. ALERT: Rental Property Scams

Some months ago, we published an alert in the TAR DIGEST about listed properties for sale being fraudulently advertised as rental properties ….WITHOUT the knowledge of either the property owners or listing brokers.  The scam artist then obtains (and absconds with) rental deposits and/or first one or two months’ rent. For a more complete picture of how the scam works, the FBI now has an explanatory page — with MUCH more information — on their website HERE.

RENTALS.COM recently posted a Consumer Alert on its website, regarding the same scam, HERE.

Both of the warning pages above are directed at consumers and the need for consumers to exercise caution in their pursuit of rental property.  Recognize, however, that the properties being (mis)used in these scams are generally REALTOR-listed properties.

Although our previous news bulletin about this situation involved mostly middle Tennessee listings, the more recent discoveries of misused information involved Memphis-area properties. This scam is prevalent nationwide, so we urge caution regardless of the area in which you work.

It makes sense to periodically review the primary rental property sites to ensure that your own listings are not being advertised fraudulently:

You may also consider signing sign up for Google Alerts (http://www.google.com/alerts) for each of your listed properties, to get an email anytime that property’s address is published on a website.

MANY thanks to TAR President Fontaine Taylor and her staff for bringing this latest outbreak of fraud to our attention!

[SOURCES: FBI; RENTALS.COM]


2. Tax Credit Extended!

As most folks now know, unless you’ve unplugged yourself from TV and the Internet for several days, the Homebuyer Tax Credit has been extended, with some welcomed modifications!

Unfortunately, there is a lot of misinformation floating around in word-of-mouth (and probably media) reports about the extension: how much it is for various groups, what the conditions are, eligibility criteria, etc.

For a good authoritative report on the extension, go to NAR’s special web page HERE.

THANK YOU to all of the TAR DIGEST readers who responded to our call to action and made your voices heard in DC!

[SOURCE: NAR]


3. HOT LINE: Suing a Buyer for Commission?

QUESTION: I have a signed buyer representation agreement. Does that give me a right to file suit on a buyer who defaults on said agreement? If so, will my broker have to be included in the lawsuit?

ANSWER: All listing agreements, buyer’s representation agreements, contracts, etc. are the property of the real estate company, NOT the individual agents. Therefore, if there was a breach of the buyer’s representation agreement, the company would be the entity to file suit. We would recommend speaking with your principal broker and explaining the situation to her. Then she can determine whether to file suit. If she wishes to pursue the case, we would recommend that she consult with an attorney for additional advice on the strengths of a potential lawsuit.

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


4. HOT LINE: A RESPA Violation?

QUESTION: We have a contractor in our area holding “information seminars” about his company and a new bonus plan that he is putting in place. To get agents to come to the seminars, he is “giving” a $20 gift card to each agent. Is this a RESPA violation? He is also “giving” a larger gift card to brokers if they can get their office to come to the seminar.

ANSWER: Under RESPA, “No person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person.”  12 USC 2607(a).  It will all depend upon what this gift card is actually doing.  If HUD or the court views it as a referral for business, then it is in violation of RESPA.  However, it could also possibly be seen as a legitimate business practice.

NEVERTHELESS, we would be very cautious about this situation since HUD is cracking down on RESPA violations in this particular housing climate.

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


5. HOT LINE ADVISORY: Agency Law

A growing number of recent Hot Line calls and questions concern misunderstandings or misinformation regarding Tennessee’s agency law.

REMINDER: A complete Guide to Tennessee’s Agency Law has been published by the Tennessee Association of REALTORS (TAR), in cooperation with the Tennessee Real Estate Educational Foundation (TREEF), and is available — for FREE — for licensees, brokers, and instructors to download! To secure your own copy of this Guide, in PDF format — simply go HERE.

Common MISunderstandings that are addressed in this Guide include, among other things:

  • The mistaken belief that you can work as a Facilitator for an unrepresented buyer while remaining the Seller’s Agent in the same transaction;
  • The mistaken belief that a disclosure form alone, or your behavior, can make you a buyer’s agent; and
  • The mistaken belief that designated agency is used solely for in-house transactions!

Again, you can download the Guide at:
http://tnrealtors.com/files/pdf/Guide_To_TN_AgencyLaw.pdf


6. Upcoming Courses & Events!

GRI 6: Sticky Situations — Nov. 12 to Dec. 16 (E-Class distance learning course), 16 hours CE. For more information, go HERE.

How do E-Classes work? These are NOT your typical online courses! To understand how they work, go HERE.

Local Assn President/President-elect Leadership Session — Dec. 9 (TAR Office, Nashville). [This session is for local association Presidents and Presidents-elect only.]

Joint Governmental Affairs/RPAC Training Workshop — Dec. 10 (TAR Office, Nashville). [This session is for local association Governmental Affairs and RPAC chairs and vice-chairs, local AEs and Governmental Affairs Directors, and TAR RPAC and Governmental Affairs Committee members.]

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


7. Rates Low, Stable

While Freddie Mac’s weekly report on rates showed the 30-year rate dipping slightly below 5 percent, these rates did not budge in Bankrate.com’s weekly survey of large lenders.

The benchmark 30-year, fixed-rate mortgage remained unchanged at 5.35 percent, according to Bankrate.com’s national survey of large lenders. A basis point is one-hundredth of 1 percentage point. The mortgages in last week’s survey had an average total of 0.31 discount and origination points. One year ago, the mortgage index was 6.44 percent; four weeks ago, it was 5.22 percent.

The benchmark 15-year, fixed-rate mortgage dipped 2 basis points, to 4.72 percent. The benchmark 5/1 adjustable-rate mortgage remained unchanged, at 4.64 percent.

[SOURCES: Bankrate.com; Freddie Mac]


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