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


CONTENTS
1. Real Estate Scam Hits Memphis Market
2. PMI Revises Forecast, Downward
3. National Speakers Featured at TAR Convention!
4. HOT LINE: Asking for a Higher Commission?
5. HOT LINE: Shedding a Problem Buyer?
6. TECH TIP: See What NAR Has For You…
7. GRI and Other Courses
8. Rates Remain at Record LOW Levels

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. Real Estate Scam Hits Memphis Market

The National Association of REALTORS (NAR) has issued a fraud warning about a real estate scheme involving an alleged out-of-market buyer offering to buy a property, sight unseen.  You can download a PDF of the NAR warning by CLICKING HERE.

BRIEFLY, HOW IT WORKS
The buyer provides a large earnest money check and a down payment check towards an all cash purchase. The funds ultimately are proved to be insufficient; however, if successful in the scam, the buyer walks away with money as refunded to him by the entity holding the earnest money and down payment.

Recently, the Memphis Area Association of REALTORS (MAAR) has become aware of at least three such incidences in the Memphis area. NAR’s alert (see above) includes more details of how the scam works. If you suspect you are a victim of this scheme, you should not proceed any further with the transaction without verifying the validity of the check(s) received and contacting the nearest FBI Field Office who may direct you to file an Internet Crime Complaint at: http://www.ic3.gov

Our thanks to Carol Culpepper for passing this along!

[SOURCES: MAAR; NAR]


2. PMI Revises Forecast, Downward

Mortgage insurance company PMI has lowered its national outlook for new- and existing-home sales by more than 50 percent despite continued low interest rates. The mortgage insurer previously had predicted that resales would rise 6.1 percent but has downgraded that forecast to a more modest 2.9 percent to 5.31 million units. It also has revised its growth forecast for new-home sales from an earlier 16.6 percent down to 9.4 percent.

[SOURCES: Star Global Tribune; Information, Inc.]


3. National Speakers Featured at TAR Convention!

The 2010 Annual Convention of the Tennessee Association of REALTORS – slated for September 15-17 in Memphis – features a star-studded array of national speakers this year, to help TAR members recharge and rebuild their businesses in a troubled economy!

Tennessee regularly features more national speakers at its Convention than any other state in our region!

This year, for the first time ever, the Convention boasts TWO outstanding Keynote speakers: entertainer and guitar virtuoso Mike Rayburn, and famed entrepreneur David Oreck! Following that opening, we have education sessions by tech gurus Brian Copeland and (national CRB President) John Mayfield. Popular NAR instructor Tony Macaluso will provide an intro to international real estate. National consultant and speaker Mike Staver will help you create the key to success – a better customer experience, and CRS instructor Pam Ermen will teach you how to read the “signs of the times”! Finally, national safety expert Andrew Wooten will help everyone learn how to navigate the safety risks in real estate!

It’s a program you don’t want to miss. And Memphis offers a wealth of things to do and see while you’re there!

The Early-Bird Registration Rates end on July 30, so ACT NOW and save $80! For more information and/or to register online, CLICK HERE.


4. HOT LINE: Asking for a Higher Commission?

QUESTION: I represent a buyer in a transaction. My buyer requested that I be paid a greater commission than the amount that the listing broker originally offered to cooperating brokers. The listing agent is stating that it is illegal to ask for a certain commission and include such in the contract. Is it illegal for a buyer to request that their buyer’s rep be paid a certain commission on a contract and state such within the contract?

ANSWER: Offers of compensation are established and/or negotiated before an offer is submitted. There are several Standards of Practice that address this issue.

Standard of Practice 3-1 states:

REALTORS, acting as exclusive agents or brokers of sellers/landlords, establish the terms and conditions of offers to cooperate.  Unless expressly indicated in offers to cooperate, cooperating brokers may not assume that the offer of cooperation includes an offer of compensation.  Terms of compensation, if any, shall be ascertained by cooperating brokers before beginning efforts to accept the offer of cooperation.

Standard of Practice 3-2 states:

To be effective, any change in compensation offered for cooperative services must be communicated to the other REALTOR prior to the time that REALTOR submits an offer to purchase/lease the property.

Standard of Practice 3-3 states:

Standard of Practice 3-2 does not preclude the listing broker and cooperating broker from entering into an agreement to change cooperative compensation.

Standard of Practice 16-16 states:

REALTORS, acting as subagents or buyer/tenant representatives or brokers, shall not use the terms of an offer to purchase/lease to attempt to modify the listing broker’s offer of compensation to subagents or buyer/tenant representatives or brokers nor make the submission of an executed offer to purchase/lease contingent on the listing broker’s agreement to modify the offer of compensation.

Under NO circumstances should a deal be held hostage due to a commission dispute between agents!

Based upon the above, any change in compensation to the buyer’s firm which is paid based upon cooperative compensation paid by the seller’s firm should be negotiated separately and before an offer to purchase is made.  Furthermore, the agents and the firms are NOT parties to the purchase and sale agreement, so the commission should not be addressed there. It should be in a separate agreement involving the two firms. It could be difficult to enforce otherwise.

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]


5. HOT LINE: Shedding a Problem Buyer?

QUESTION: I have a buyer’s rep agreement that I want to get out of. I have asked the buyer to sign the TAR release form. If the buyer signs this form, will it release me from any further liability or responsibility with regard to this specific buyer?

ANSWER: Please remember that the Listing/Agency Mutual Release Agreement only releases the agent and the client from the obligations of the contract from that date forward.  Obviously, there may be some carry-over provisions provided for in the release itself. However, this does NOT remove any sort of liability or responsibility of the agent for their actions prior to the release date.

[SOURCE: TAR Legal and Ethics Hot Line Attorneys]


6. TECH TIP: See What NAR Has For You…

The Center for REALTOR Technology (CRT) is a department within the National Association of REALTORS (NAR). CRT strives to provide REALTOR members with information to assist in their day-to-day business.

Recently, CRT released new (FREE!) tools for REALTORS and REALTOR Staff, and you might find something useful there!

Current resources include an iPhone app, a listings Flash display application, an app that helps define neighborhood boundaries on maps, RETS resources, and more. Take a moment to look through these resources at: http://www.crt.realtors.org/cms/projects

[SOURCE: NAR]


7. GRI and Other Courses

July 22: Homeownership Options for TN Workforce (6 hrs. CE) – Jackson. For more information contact the Central West TN Association of REALTORS at:

July 22: TransactionDesk Basic Course (3 hrs. CE) – Chattanooga. For more information or to register, call 423-698-8001.

July 29: Agency In Tennessee Course (4 hrs. CE) – Chattanooga. For more information or to register, call 423-698-8001.

Aug. 2: TransactionDesk Advanced Course (3 hrs. CE) – Chattanooga. For more information or to register, call 423-698-8001.

Aug. 4: 2009-2010 Core CE Course (4 hrs. CE) – Clarksville. For more information or to register go to: http://armscar.realtracs.com/memberaccess/

Aug. 5 – Sept. 8: E-Class GRI 2, Smart Marketing – Your Listings & Your Services (16 hrs. CE) – a distance learning course. For more information or to register, CLICK HERE.

Aug. 6: 2009-2010 Core CE Course (4 hrs. CE) – Chattanooga. For more information or to register, call 423-698-8001.

CLICK HERE for the complete 2010 schedule of Classroom and E-Class GRI Courses!

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


8. Rates Remain at Record LOW Levels

Borrowing costs on mortgages remained mostly flat in the past week, sticking at or near the previous week’s record lows, reports Freddie Mac. Average interest on 30-year fixed loans were unchanged at 4.57 percent, while the rate on 15-year loans dipped even further to a new bottom of 4.06 percent from 4.07 percent the previous week. Five-year adjustable-rate mortgages bumped up from a low of 3.75 percent the prior week to 3.85 percent on July 15. One-year ARMs, meanwhile, dropped to their lowest level since Freddie Mac began tracking the statistic. The rate settled at 3.74 percent, down a notch from 3.75 percent a week earlier.

[SOURCES: Freddie Mac; Information, Inc.]


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

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