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

1. Tennessee Rated Very Good for Business!
2. Mortgage Applications Fall, Economists Cautious
3. HOT LINE: Depositing Earnest Money for a Short Sale?
4. HOT LINE: Terminating a Listing?
5. Upcoming GRI and Other Courses
6. Rates Hit 25-Year Low

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. Tennessee Rated Very Good for Business!

CHIEF EXECUTIVE magazine annually reports which states offer the best and worst conditions for businesses to prosper (evaluating such things as tax policies, quality of life, infrastructure, regulatory environment, etc.)

In their newly released report, those states rated as the best places to do business are:

  1. Texas
  2. North Carolina
  3. Tennessee
  4. Virginia
  5. Nevada

And the states rated as the worst places?

  1. California
  2. New York
  3. Michigan
  4. New Jersey
  5. Massachusetts

Notwithstanding floodwaters, Tennessee’s a great place to live and work!

[SOURCES: REALTOR Magazine Online; Chief Executive Magazine]

2. Mortgage Applications Fall, Economists Cautious

This report from the Mortgage News Daily NewsWire last week is concerning:

The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending May 14, 2010.

Michael Fratantoni, MBA’s Vice President of Research and Economics summed up the survey:

Purchase applications plummeted 27 percent last week and have declined almost 20 percent over the past month, despite relatively low interest rates. The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season. In fact, this drop occurred even as rates on 30-year fixed-rate mortgages continued to fall…
*** END QUOTE ***

We hope that Mr. Frantonini is wrong in his analysis!

Economists at the National Association of Home Builders are more optimistic, with reservations: “Economists participating in yesterday’s [May 18, 2010] NAHB Construction Forecast Conference Webinar agreed that the housing market is on the road to recovery, but cautioned that several factors could contribute to a bumpy ride in the coming months.

To read the full NAHB analysis, CLICK HERE.

[SOURCES: Mortgage News Daily; Mortgage Bankers Association; National Assn. of Home Builders]

3. HOT LINE: Depositing Earnest Money for a Short Sale?

QUESTION: I am currently working a short sale. The buyer and seller have agreed on price subject to lender approving short sale. Buyer gave us a check for the earnest money. Are we to deposit the earnest money or wait until the lender agrees to the contract?

ANSWER: Pursuant to TREC Rule 1260-2-.09(8), “Earnest money shall be deposited into an escrow or trustee account promptly upon acceptance of the offer, unless the offer contains a statement such as “Earnest money to be deposited by:”. Therefore, you are to deposit it according to the terms of the contract or if the contract is silent, upon acceptance of the offer by the seller.

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]

4. HOT LINE: Terminating a Listing?

QUESTION: I need a form to use when a seller wants to terminate his listing agreement. I cannot find it in the list of TAR Forms. Will you please give me the form number?

ANSWER: A listing agreement is a written contract that establishes an agency relationship between a seller and a real estate company. In order to terminate this contract, it requires a termination and release in writing and signed by all parties to the listing agreement. It should terminate the contract and release both sides from the obligations under the original listing agreement. Until this is completed, the listing agreement will continue in place until its natural termination.

If a seller wants to terminate his listing agreement with you, your principal broker must decide whether you wish to hold them to that contract or not. This is completely up to the broker as to whether they want to release them from the listing. TAR provides a form for you to use if you agree to terminate the listing – form F82. It does provide a carry over clause (if they sell their home within X days without the help of another agent who was introduced to it by the original listing agent) and a place to negotiate a cancellation fee. It also provides for a complete release with no fees having to be paid.

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]

5. Upcoming GRI and Other Courses

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!

6. Rates Hit 25-Year Low reports that mortgage rates hit a new low in the nearly 25-year history of its weekly survey, with the average 30-year fixed mortgage dropping to 4.96 percent. The Mortgage Bankers Association, though, forecasts this benchmark to rise from an average of 5 percent in the first quarter to 5.4 percent by the end of next month. The group’s Michael Fratantoni comments, “I think you’re going to see weeks where private investors are in and weeks when private investors step back from mortgages — and as a result, you’ll see higher rate volatility in the next couple of months.”

Note that computes weekly rates by averaging rates reported by major lenders. Freddie Mac’s weekly rate reports are calculated differently. Freddie Mac reported 30-year rates averaging 4.84 percent in its most recent survey, the lowest rate reported in 2010.

[SOURCES:; Freddie Mac; Information, Inc.]

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