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

1. Nationwide Open House Weekend: April 10-11!
2. New Home Sales Hit Record Low in January
3. HOT LINE: Sequence of Offers?
4. HOT LINE: Adding Son to Contract?
5. HOT LINE Advisory: Septic Permits & Bedrooms
6. Upcoming Courses & Events
7. Rates Move Over 5 Again
8. No TAR DIGEST Next Week

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

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

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1. Nationwide Open House Weekend: April 10-11!

Join thousands of REALTORS around the nation and hold an open house on the weekend of April 10 and 11, 2010!

The Tennessee Association of REALTORS joins with state and local associations around the country to promote the Nationwide Open House Weekend. Encourage your buyers to visit and your sellers to participate! As an added touch you can identify the open house with REALTOR balloons.

How is this weekend different than any other weekend in April? This is an incredible opportunity for consumers to shop for a new home while:

  • Affordability is good
  • Mortgage interest rates are low (but expected to rise)
  • Good supply of homes on the market
  • The Expanded First-time Homebuyer’s Federal Tax Credit is still available. The contract has to be in place by April 30, 2010.

Eventually, home prices and interest rates will climb, inventory will become scarce and the tax credit will be gone.

2. New Home Sales Hit Record Low in January

Last week, the Commerce Department reported that new-home sales fell 11.2 percent in January to a seasonally adjusted annual rate of 309,000 — the lowest level on record. Analysts had expected a 3.5 percent gain. “This should be an ideal time for people to buy. And yet, they’re hesitating,” notes Brad Hunter of housing consultant Metrostudy. “You’re not going to have a robust housing market until you have more jobs, and you’re not going to add jobs fast enough to bring down the unemployment rate until you have a robust housing market.”

[SOURCES: AP, New York Times; Information, Inc.]

3. HOT LINE: Sequence of Offers?

QUESTION: I have two offers on a property I’ve listed. The first buyer has submitted an offer three times. The first two times they were submitted, the terms were not even worthy of a counter-offer by the seller. Now I have received the third offer from the first buyer and also an offer from a second buyer. If the owner has a preference of one over the other, are there any consequences if it doesn’t happen to be the first buyer?

ANSWER: Until an offer is accepted, the seller can select whichever offer he chooses unless there was another agreement. There is NO requirement to deal with the offers in the order in which they were received. However, you should NEVER have two counter-offers out to two separate buyers at the same time. This is very dangerous because both buyers could accept at the same time and the seller would then be bound on both contracts. This would likely result in a lawsuit against the seller and you. Instead, you can suggest the highest and best solution to multiple offers. This is when the seller decides to inform all buyers that there is a multiple offer situation and asks that everyone submit their highest and best offer by a particular time and then the seller selects the offer he wishes. Another option is to select one offer and counter it ONLY.

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

4. HOT LINE: Adding Son to Contract?

I represent a buyer who put an offer on a property. After attempting to get financing, the buyer found that they would need to include their son on the transaction, or in the alternative, transfer the contract to the son. The listing agent said the seller would not agree to this, but my broker said the seller didn’t have any say over the matter. What form do I need to complete to add and/or transfer the contract to the son of the buyer?

ANSWER: Based upon what you have stated in your question, there are two possible ways that this could be handled.  First, if you are altering the contract by adding the son as a buyer, then you will have to amend the contract and will have to have the approval of ALL parties (buyers and sellers). You could use form F6, Amendment to Agreement. However, there may be another option.

In Tennessee, real estate contracts are generally assignable unless the contract specifically states that it is not. Therefore, your buyer may be able to assign the purchase and sale agreement to his son. Unfortunately, TAR does not have a form for this purpose. If the buyer wishes to do this, then he would need to speak with his own attorney to draft the assignment documents and to ensure that this is possible under that particular purchase agreement. One important thing to remember in an assignment situation is that the assignor (the buyer) is still obligated to purchase the house if the assignee (the son) does not close according to the terms of the original purchase and sale agreement.

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

5. HOT LINE ADVISORY: Septic Permits & Bedrooms

The TAR Hot Line continues to receive numerous questions regarding the marketing of homes in situations where the homes are not permitted for the number of bedrooms that the sellers are currently using. Often, those contacting the Hot Line want to market the home (and list it in the MLS) as having the higher number of bedrooms, but then – for example – including a note in the REALTOR Remarks that the home is actually permitted for fewer bedrooms.

There is really NOT a satisfactory way in which one could advertise or market a home as having more bedrooms than its permit allows that might not be regarded by either a plaintiff’s attorney, ethics panel, or Real Estate Commission investigation as misleading advertising or misrepresentation.

Putting a note in REALTOR Remarks puts your disclosure of the actual number of bedrooms in an area of the listing information not visible to consumers when that same information is shown on REALTOR.COM or other public websites …with the result that the property is falsely advertised on those sites. Similarly, some might consider it a deceptive “bait and switch” tactic to list and/or advertise a property has having (for example) four bedrooms and then to show  the actual permitted number of three bedrooms on a disclosure form made available at the property showing.

PLEASE keep in kind that misrepresentation continues to be the leading cause of lawsuits against REALTORS nationally.

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

6. Upcoming Courses & Events

March 3: Agency in Tennessee (4 hrs. CE) – Contact the Clarksville Assn. of REALTORS, 931-552-3567

March 3: NAR Quadrennial Ethics course (3 hrs. CE) – Contact the Clarksville Assn. of REALTORS, 931-552-3567

March 8-10: 2010 TAR Spring Conference (8 hrs. CE)
– Murfreesboro

March 17-18: GRI 2, Smart Marketing (16 hrs. CE) – Memphis.

March 17-18: The Learning-Centered Instructor Workshop (16 hrs. CE) – TAR Office, Nashville.

March 18 – April 21: E-Class GRI 4, From Offer to Contract to Closing (16 hrs. CE).

March 24-25: GRI 1, Professionalism in Real Estate (16 hrs. CE) – Chattanooga.

March 24-25: GRI 5, Systems for Success (16 hrs. CE) – Knoxville.

March 24: Workshop for Agency Instructors – TAR Office, Nashville.

March 25: Workshop for Contracts Instructors – TAR Office, Nashville.

April – August: Leadership TAR 2010!

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

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

7. Rates Move Over 5 Again

Freddie Mac’s Primary Mortgage Market Survey showed the 30-year fixed-rate mortgage (FRM) averaging 5.05 percent with an average 0.7 point for the week ending February 25, up from the previous week when it averaged 4.93 percent. Last year at this time, the 30-year FRM averaged 5.07 percent.

The 15-year FRM last week averaged 4.40 percent with an average 0.7 point, up from the prior week when it averaged 4.33 percent. A year ago at this time, the 15-year FRM averaged 4.68 percent.

“Interest rates for 30-year fixed mortgages followed long-term bond yields higher and rose above 5 percent this week amid a mixed set of economic data reports” said Frank Nothaft, Freddie Mac vice president and chief economist.

[SOURCE: Freddie Mac]

8. No TAR DIGEST Next Week

Due to the TAR Spring Conference (March 8-10), there will be no TAR DIGEST next week. But we’ll return with the March 16 issue, including any major news from the Conference!

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