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

1. Important Update On Seller Financing
2. More Feel Prices May Fall
3. TAR Elects Its 2011 Officers!
4. HOT LINE: Referral Fee on Transferred Listings?
5. HOT LINE: Agent Present at the Inspection?
6. GRI and Other Courses
7. Instructor Training Offered at TAR
8. Rates Remain Very Low, Largely Unchanged

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

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1. Important Update On Seller Financing

Seller financing has become a huge issue in this legal and economic environment and there has been a lot of confusion as to whether it is still permitted under both federal and state law without first having to obtain a mortgage broker’s license. In 2008, Congress passed the Secure and Fair Enforcement Licensing Act of 2008 (“SAFE Act”).

In this Act, states were required to develop licensing systems and criteria which would comply with the Act within a short period of time or risk HUD stepping in and developing a program for the state. Under the terms of the statute, Tennessee had one year to develop its plan. Shortly afterward, HUD published a model plan to guide states as well as a proposed set of rules which interpret the SAFE Act. Unfortunately, even though the deadline for the states to develop their plans has passed, HUD has not finalized the rules for the SAFE Act.

You may download a PDF document, containing our entire analysis of this situation, by CLICKING HERE.

[SOURCE: TAR’s Governmental Affairs Dept.]

2. More Feel Prices May Fall

Nearly half of 1,100 real estate professionals surveyed by HomeGain expect real estate prices to fall over the next six months. Forty-eight percent of the agents and brokers and a third of homeowners polled believe that home prices will drop between now and March.

This reflects a rise in the percentage of property professionals and homeowners who anticipate a decline in real estate values compared to the second-quarter HomeGain home prices survey, in which 33 percent of agents and brokers and 23 percent of homeowners expected residential prices to decline over the upcoming six months. Forty-two percent of homeowners, realty agents, and brokers believe that prices will remain stable in the next six months.

To access the complete story, CLICK HERE.

[SOURCES: UPI; Information, Inc.]

3. TAR Elects Its 2011 Officers!

At our recent Annual Convention of the Tennessee Association of REALTORS in Memphis, Tennessee, the TAR Board of Directors elected the following to serve as officers of the state association in 2011:

2011 TAR President: Emil Mongeon (Brentwood)
2011 TAR President-elect: Sue Turner (Memphis)
2011 TAR Secretary-Treasurer: Randy Thomas (Kingsport)
2011 Immediate Past President: BJ Swinehart (Knoxville)
2011-2012 Division 1 Vice President: Glenn Moore (Memphis)
2011-2012 Division 2 Vice President: Rex Brown (Tullahoma)
2011-2012 Division 3 Vice President: Mike Pappas (Knoxville)

Continuing their service on the TAR Executive Committee will be: 2010-2011 Division 1 VP Bob Stephens (Union City); 2010-2011 Division 2 VP Amy Hamilton (Mt. Juliet); and 2010-2011 Division 3 VP Billy Daniel (Morristown).

All of the newly-elected officers were duly installed at the final banquet of the Annual Convention. They will assume office in mid-November. Our congratulations to all of them!

4. HOT LINE: Referral Fee on Transferred Listings?

QUESTION: When an agent moves their license and the agent’s sellers request to be moved with them, can the prior broker request a referral fee on each listing?

ANSWER: Yes. Listings belong to the firm, not the individual agent. Pursuant to TREC Rule 1260-2-.02(3), “When a licensee terminates his affiliation with a firm, he shall neither take nor use any property listings secured through the firm, unless specifically authorized by the principal broker.” The listing broker can place conditions on allowing the listing to be transferred.

A listing agreement is a written contract which 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, 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 you have a seller who wishes to terminate their listing agreement with you, your principal broker must decide whether 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.

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

5. HOT LINE: Agent Present at the Inspection?

QUESTION: I always went to my home inspections, as an agent, and represented my sellers or my buyers.  Is this or is this not a good practice?

ANSWER: Home inspections can be tricky issues. If you are representing the buyer, then attending the home inspection and being present with the home inspector may generally be a good idea. That way, you can be present and assist in representing your client. However, you must be cautious when doing so. It’s important that your presence not interfere with a thorough inspection of the property. Also, if the home inspector makes a comment which does not appear in his report, this could be an adverse fact which you will then need to disclose to all parties in the transaction.

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. 62-13-102(2).

This is also why it may NOT be a good idea for the seller’s agent to be around the home inspector when he is making the inspection. If the agent overhears something which constitutes an adverse fact, that fact must then be disclosed to ANY potential buyer. If security of the property and its contents is a genuine concern, a better practice may be for the agent to be at the property, but wait in the car, outside, or at least out of earshot from the inspector during the inspection. This allows the agent to be a presence to deter any theft, etc., but does not place the agent in a position in which he unwittingly does harm to his client.

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

6. GRI and Other Courses

Sept. 29-30: GRI 5, Systems for Success (16 hrs. CE) – Jackson. For more information or to register, CLICK HERE.

Oct. 14-15: GRI 4, From Offer to Contract to Closing (16 hrs. CE) – Cool Springs/Nashville Area. For more information or to register, CLICK HERE.

Oct. 14 – Nov. 17: GRI 5, Systems for Success (16 hrs. CE) — an E-Class distance-learning course. For more information or to register, CLICK HERE.

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

In addition to GRI Courses:

Sept. 28: Homeownership Options for Tennessee’s Workforce (6 hrs. CE) – Morristown. For more information or to register, call 423-587-2266.

Oct. 4-5: Instructor-Training (see below).

Oct. 6: RESPA Really Matters (4 hrs. CE) – Clarksville. For more information or to register, call 931-552-3567.

Oct. 6: Agency in Tennessee (4 hrs. CE) – Clarksville. For more information or to register, call 931-552-3567.

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

7. Instructor Training Offered at TAR

A newly-updated offering of The Learning-Centered Instructor (LCI) Workshop — TAR’s 2-day instructor-training program — will be held October 4-5, 2010, in Nashville, TN.

This workshop is recommended for anyone handling in-house training for their company, teaching Local Association Orientation, teaching CE classes for their Local Association, OR teaching prelicensing classes. [This 16-hour class meets the TN Real Estate Commission’s training requirement for prelicensing instructors AND offers 16 hours of Continuing Education (CE) credit!]

Since its development several years ago, this program has been used successfully by the Tennessee, Arizona, and Missouri State Associations to train real estate instructors for greater impact in the classroom! For more information, or to register, CLICK HERE.

8. Rates Remain Very Low, Largely Unchanged

According to Freddie Mac, loan averages were mostly unchanged this past week as chief economist Frank Nothaft said “the perception of slow growth and low inflation removed any upward pressure on fixed mortgage rates this week.” The 30-year fixed rate averaged 4.37 percent for the week ended Sept. 23, flat with the previous week. Meanwhile, rates for 15-year fixed loans also were steady at 3.82 percent, the lowest since Freddie Mac started tracking it 19 years ago.

[SOURCES: Freddie Mac; Information, Inc.]


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Tennessee Assn. of REALTORS
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