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


CONTENTS
1. 2010 Forms Are Here!
2. Foreclosures Affecting Home Appraisals
3. Exterior Remodeling Shows Best Return
4. TAR Information Exchange Forums
5. Professional Standards Procedures Training
6. HOT LINE: Buyer To Remain Anonymous?
7. HOT LINE: Should I Use an Option Agreement?
8. Upcoming Courses & Events
9. Rates Close 2009 Over 5

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

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


1. 2010 Forms Are Here!

They’re ready for the New Year! As of January 4th, the 2010 TAR Residential and Commercial forms are now available through the Members Only section of the TAR website at: http://tnrealtors.com

Once logged in, you may access the new forms in the same two ways you’ve been used to:
1. TransactionDesk
2. Forms On The Fly

We are ALSO excited to announce that the forms can be accessed with a Windows PC or a Mac! You will notice a slightly different toolbar in TransactionDesk while you are editing a form. This new toolbar should be easier to use, and allows the forms to be editable on a Mac computer.

For more complete forms news, go to:
http://tnrealtors.com/main/tar_forms_news/


2. Foreclosures Affecting Home Appraisals

*** BEGIN QUOTE ***
Approximately 25 percent of Realtors say low appraisals have broken up deals, according to the National Association of Realtors. While foreclosed properties typically are not included in a comparable sales analysis, they account for about 40 percent of home sales — more than 50 percent in some markets — making it difficult for appraisers to value properties not in the foreclosure process. Additionally, new industry rules that require mortgage lenders to order appraisals through in-house staff or appraisal management companies means more appraisers without knowledge of the local market are making valuations. While Zillow.com says non-foreclosures are selling for upwards of 30 percent more than foreclosures, a study of 20 years of home sales in Massachusetts by Harvard University’s Joint Center for Housing Studies indicates that dwellings closer than 100 yards to a foreclosure lose about 1 percent in value.
*** END QUOTE ***

To read more, go HERE.

[SOURCES: USA Today; Information, Inc.]


3. Exterior Remodeling Shows Best Return

The 2009 Remodeling Cost vs. Value Report was just recently released, and results indicate that exterior remodeling projects may offer the best return for dollars spent. REALTORS in 80 metropolitan markets were surveyed by Remodeling magazine for this year’s report, and REALTOR Magazine Online just published a summary (“Small Projects, Big Bang”)

*** BEGIN QUOTE ***
The majority of the 10 remodeling projects with the best return on investment nationally are a testament to pragmatism. Six of the 10 projects — siding and window replacement using a variety of materials — involve home maintenance that costs less than $14,000.

Two more — adding an attic bedroom or a wood deck — reinforce the notion that boosting the amount of livable space in and around your home will attract buyers who are increasingly looking for more room for their buck. In past years, converting an attic into a bedroom was a project that landed squarely in the middle of the rankings, but this year it leapfrogged over other categories into third place. It’s an admittedly pricey project, with an average national cost of nearly $50,000, but it generates an average national return of 83.1 percent and a better-than-100 percent return on investment, according to REALTORS(R) in 14 of the 80 cities surveyed. Adding a wood deck is much more economical, with an average national cost of slightly more than $10,000. Its average national return is 80.6 percent, but in six cities, its return is estimated at 100 percent or greater.
*** END QUOTE ***

To read a complete summary of the report, go HERE.

[SOURCE: REALTOR Magazine Online]


4. TAR Information Exchange Forums

TAR has scheduled THREE (3) Information Exchange Forums, one in each Grand Division of the state, in early February. The purpose of this Forum is to brief local associations on various TAR services and priorities, especially our Governmental Affairs agenda for 2010, and to hear local association issues and concerns …to maintain an open and friendly dialogue between the state association and the local associations in each Grand Division. There is NO CHARGE for this session, but we WOULD like everyone to register to ensure adequate seating and handouts.

Who SHOULD ATTEND the Divisional Information Exchange Forum:

  • Local Association Presidents and Presidents-elect
  • Local Association AEs and any other interested staff
  • Local RPAC and Governmental Affairs Committee members
  • Local Education Committee Chairs and Vice-Chairs
  • TAR Executive Committee representatives

Any other interested TAR members may also attend.

This forum will take place from 9:30AM to Noon in each location:

Feb. 4 – Central West TN Assn. office, Jackson …To register, go HERE.

Feb. 9 – Middle TN Assn. office, Murfreesboro …To register, go HERE.

Feb. 10 – Knoxville Area Assn. office, Knoxville …To register, go HERE.


5. Professional Standards Procedures Training

In addition to the above item #4….

As a free service to TAR members and their local associations, TREEF — the educational foundation affiliated with TAR — is sponsoring THREE (3) Professional Standards Training workshops, one in each Grand Division of the state, in early February. This workshop provides training for members of local association Professional Standards and Grievance Committees, AND will brief members of both Committees on any changes that NAR made in 2009 to the Code, Standards of Practice, and Procedures. This training may also be useful for any officers or directors who have not been trained, since they may be involved in appeals. We have applied for 3 hours of CE credit for anyone attending this training. There is NO CHARGE for this session, but we WOULD like everyone to register to ensure adequate seating and handouts.

Who SHOULD ATTEND the Professional Standards Procedures Training:

  • Local Association Professional Standards & Grievance Committee members
  • Local Association AEs and any other interested staff
  • Any Local Association Officers who have not received training

The workshop will take place from 1PM to 4:30PM in each location:

Feb. 4 – Central West TN Assn. office, Jackson …To register, go HERE.

Feb. 9 – Middle TN Assn. office, Murfreesboro …To register, go HERE.

Feb. 10 – Knoxville Area Assn. office, Knoxville …To register, go HERE.


6. HOT LINE: Buyer To Remain Anonymous?

QUESTION: I have a client who wants to remain anonymous on an offer. How do I represent this client and allow them to remain anonymous?

ANSWER: We are not aware of any law prohibiting a buyer from submitting an offer in which they remain undisclosed. However, please bear in mind that this is qualified by the fact that if the buyer is a real estate agent, then this MUST be disclosed.

Additionally, you are NOT permitted to mislead the seller. For example, if the seller asks whether the buyer is X or a particular company and it is, you cannot tell the seller that it is not. Also, please bear in mind that if the seller has placed restrictions on who they will sell the property to and the undisclosed buyer is, in fact, a member of the restricted group, you cannot submit the offer. This would be misleading. You are also obligated to honor the requests of your client, the buyer. If he or she wishes to remain anonymous, then you must keep that confidence.

With an anonymous buyer, the offer could be presented unsigned. Once the seller agreed to the terms and signed, then the buyer would sign the offer, making it a contract between the parties.

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


7. HOT LINE: Should I Use an Option Agreement?

QUESTION: I represent a buyer on a property. We have made an offer, but cannot close for a few months due to the necessity of obtaining a zoning ordinance. The seller is asking for $3,000.00 per month (not earnest money) to hold the property. The buyer does not have a problem paying this money, but if the zoning ordinance is not obtained, my buyer wants a refund of the money paid. I am concerned that if this money is paid directly to the seller, we might run into a problem with a refund, if necessary. First, is this legal? And if so, should I use an Option Agreement or other form. Please advise as to how we should proceed.

ANSWER: You have several issues in this situation. First, an option may not be exactly what is needed in this situation. An option is typically used where a buyer is interested in a property and agrees to pay the seller a specific amount of money for the seller to agree NOT to sell the property for a specific amount of time. During that time, the buyer can then decide if he wants to buy the property. If he does, then he can “exercise” the option and execute a contract to purchase. If not, then at the end of the option period, the seller can sell it to someone else. Typically this money is not refundable.

An alternative would be to place a special stipulation in the contract itself. TAR has a list of special stipulation language contained on form F33 in paragraph 13 which deals with zoning. However, it does not deal with the additional funds being paid. Therefore, you may need to have an attorney assist you in drafting some language for this purpose.

Finally, the parties will need to agree on the funds. First, is it refundable? Second, who holds the funds? If the seller will not agree to an agent holding the funds, another option may be an attorney or title company. This would prevent it from being held by a party to the contract. If this is what the parties want, then you can use TAR form F20 for this purpose.

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


8. Upcoming Courses & Events

Upcoming Divisional Information Exchange Forums and Professional Standards Training sessions are coming up in early February. See above news items for more information.

GRI 1: Professionalism in Real Estate — Jan. 14 – Feb. 17. (E-Class distance learning course), 16 hours CE. For more information, go HERE.

GRI 2: Smart Marketing — Feb. 4 – March 10. (E-Class distance learning course), 16 hours CE. For more information, go HERE.

Leadership TAR 2010 — Registration is OPEN for the 2010 Program! For more information about Leadership TAR and registration for each of the three retreats, go HERE.

The complete 2010 schedule of Classroom and E-Class GRI Courses is now online HERE.

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

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


9. Rates Close 2009 Over 5

Mortgage rates ended 2009 above 5 percent, with Freddie Mac reporting 30-year fixed rates at an average 5.14 percent — still very affordable by historical standards. Although higher long-term borrowing costs late in the year could signal further increases for 2010, new data from Wells Fargo, JPMorgan Chase, and the Mortgage Bankers Association indicates more borrowers are refinancing into 15-year loans in hopes of paying off home debt faster. According to the Mortgage Bankers Association, 15-year fixed loans accounted for nearly 20 percent of refinance applications in October 2009 — up from 9.1 percent in October 2008 and 7.5 percent in October 2007.

[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