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


CONTENTS
1. Call for Action: Prevent New Tax Burdens on Real Estate!
2. Tax Credit Extended for Some Military and Foreign Service Employees Based Overseas
3. HOT LINE: Can I Use TAR Form for the Counter?
4. HOT LINE: Buyer and Seller Signing Different Copies?
5. HOT LINE: A Possible Lien on a Short Sale?
6. Upcoming GRI and Other Courses
7. Get Tech Tips …and Help a Worthy Cause!
8. Rates Hit New Low for 2010

To ask a TAR Legal and Ethics Hot Line question, CLICK HERE.

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

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1. Call for Action: Prevent New Tax Burdens on Real Estate!

Congress is considering changes to the tax code in order to pay for a number of tax provisions expiring in 2010. Two of these provisions would impact real estate. The first would require all owners of rental properties to file IRS 1099 forms for all contractors they do business with if they pay that contractor $600 or more in any given year. This onerous provision would apply to even the smallest landlord.

In addition, Congress is considering taxing “carried interest” at ordinary income rates instead of capital gains. Carried interest rules govern how general partners in real estate investments pay taxes when the investment is sold.

These new tax burdens will further delay the real estate market recovery. These proposals are ill-advised, inopportune and potentially destructive. Please tell Congress to oppose them today! To take action, CLICK HERE.


2. Tax Credit Extended for Some Military and Foreign Service Employees Based Overseas

While the Homebuyer Tax Credit has expired for most buyers signing contracts after April 30, 2010, the credit remains in effect for certain military personnel and foreign service employees deployed overseas for 90 days or more between January 1, 2009 and April 30, 2010.

They can still claim the credit if they sign a contract on or before April 30, 2011 and close on or before June 30, 2011. While this is a relatively small group, it is worth keeping in mind — particularly for members of the military ending tours of duty in Iraq and Afghanistan among other places, as well as for sailors returning from naval deployments across the globe.

For more details, CLICK HERE.

[SOURCES: NAR; IRS]


3. HOT LINE: Can I Use TAR Form for the Counter?

QUESTION: I received an offer from an unrepresented buyer on one of my listings. This buyer works for a bank and had a title company draw up the contract. She was told by TAR that, not being a REALTOR, she could not use a TAR purchase and sale agreement. I do not want to use the contract that the title company used because it is missing a lot of language that is in the TAR purchase and sale agreement. Is it ok for me to use the TAR Purchase and Sale Agreement as a counter so that the contract is on that instead of her title company’s contract?

ANSWER: First, we would recommend speaking to your client concerning the offer. Explain the elements which are missing from the attorney-drafted offer and determine whether or not the seller is comfortable.  If the seller wishes to use the TAR form, this is fine since you are representing the seller. You can always counter back with the completed TAR form or counter, requesting that the buyer use this form instead.

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]


4. HOT LINE: Buyer and Seller Signing Different Copies?

QUESTION: If I prepare an addendum to a contract and the buyer and seller both sign it, but not on the same copy, is that legal?

ANSWER: This will depend upon the terms of the original contract. Look to see if the original contract will allow the documents to executed in counterparts. This generally means that one party can sign one copy and the other party can sign another copy. Please keep in mind that we cannot provide you with an interpretation of an executed contract. If you have specific questions about this particular contract, you will need to speak with your own attorney.

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]


5. HOT LINE: A Possible Lien on a Short Sale?

QUESTION: I am working with a seller on a short sale. In the residential property disclosure, the seller stated that the roof was in good condition. I just learned that the roof was recently replaced; however, the seller has not yet paid the contractor. The contractor is threatening to put a lien on the property, but hasn’t done so yet. Because I now know of this fact, am I required to disclose it to the lender and/or buyer?

ANSWER: As a real estate agent, you are required as a real estate agent to disclose adverse facts.  Pursuant to Tenn. Code Ann. 62-13-403(2), a real estate agent is required to “[d]isclose to each party to the transaction any adverse facts of which the licensee has actual notice or knowledge.” Tennessee law defines an adverse fact as “conditions or occurrences generally recognized by competent licensees that have a negative impact on the value of the real estate, significantly reduce the structural integrity of improvements to real property or present a significant health risk to occupants of the property.” Tenn. Code Ann. S 62-13-102(2).

THEREFORE, if an agent has actual knowledge of an adverse fact, he MUST disclose it. A lien on the property could have a negative impact on the value of the property. If you determine that it would, then you are required to disclose it.

We would advise that you talk with the seller and advise him of the situation. He may volunteer to disclose it and have it addressed in the contract. We would also recommend that the seller contact his own legal counsel for advice on this situation as it may affect his ability to close (both from the standpoint of the contractor and possibly the lender since it is a short sale).

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]


6. Upcoming GRI and Other Courses

May 18-19: GRI 3, Financing the Successful Transaction (16 hrs. CE) – Nashville, TAR Office.

May 20-21: 2-Day ABR Course (16 hrs. CE) – Hendersonville. For more information, contact the Sumner Association of REALTORS, 615-824-6629.

May 24: eBuyer Course (8 hrs. CE) – Hendersonville. For more information, contact the Sumner Association of REALTORS, 615-824-6629.

May 26: Workshop for Agency Instructors (4 hrs. CE) – Nashville, TAR Office.

May 26-27: GRI 2, Smart Marketing (16 hrs. CE) – Knoxville.

June 2-3: Leadership TAR Retreat, “Leading Others Effectively” – Montgomery Bell State Park.

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

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


7. Get Tech Tips …and Help a Worthy Cause!

As a general rule, we don’t promote books, etc., unless there is a compelling reason or an exceptional value to be had. In the following case, there are both!

Joseph Ferrara, a regular blogger to the real estate community and occasional columnist for Inman News (on all things tech-related) has been diagnosed with a malignant brain tumor. To help his family defray some of their huge medical costs, Inman News has published a collection of ten (10) of Joe Ferrara’s best columns on technology tips for REALTORS — a “Tech Tool Shed Top 10” collection! It’s priced at only $10 and all of the proceeds go to the Ferrara family!

For more information, or to purchase the collection, CLICK HERE.

[SOURCE: Inman News]


8. Rates Hit New Low for 2010

The 30-year fixed mortgage rate has fallen for the fifth straight week, from 5 percent last week to 4.93 percent — its lowest level so far in 2010, according to Freddie Mac. The decline followed the fall in Treasury yields as investors sought a haven following recent stock market volatility. Also, 15-year fixed loans fell to 4.3 percent from 4.36 percent; five-year hybrid adjustable-rate mortgages declined to a new low of 3.95 percent from 3.97 percent; and one-year ARMs fell to 4.02 percent from 4.07 percent.

[SOURCES: Freddie Mac; Information, Inc.]


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

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