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

1. Mortgage Interest Deduction – Don’t Overreact
2. NEW Home Buyer and Seller Profile Released!
3. REALTOR Numbers Expected To Fall Further
4. HOT LINE: Presentation of the Offer
5. Upcoming Courses and Events
6. Rates at Historic Low Levels Again

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

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

Follow TAR on Twitter!

…And see TAR’s page on Facebook!

1. Mortgage Interest Deduction – Don’t Overreact

An initial draft proposal for reducing the federal deficit that includes a suggestion to pare back the mortgage interest deduction is thin on details and will likely change many times before it’s released in any final form.

The New York Times Wednesday, and other national media on this past Thursday, published part of a leaked draft by the co-chairs of President Obama’s Deficit Reduction Commission; the commission’s report won’t be released until Dec. 1 at the earliest and will likely look very different from the leaked draft. Therefore, early reactions to the plan are pure conjecture.

In an advisory sent to REALTOR association leaders late this past Wednesday, the National Association of REALTORS (NAR) said media reports that the commission has recommended reducing the mortgage interest deduction are false.

The process of arriving at a deficit reduction proposal that a majority of the commission can agree on – 14 of its 18 members must agree on any plan before it can be released – is likely to be difficult. Once the commission does release a report, it will go to President Obama, who could include some or all of the commission’s proposals in the federal budget he submits to Congress in February of next year. The proposals will then face a long road of hearings and other scrutiny in Congress.

The bottom line …DON’T OVERREACT to premature speculation that the deduction is going away or being reduced!


2. NEW Home Buyer and Seller Profile Released!

The latest 2010 NAR Profile of Home Buyers and Sellers was released during NAR”s Annual Convention earlier this month. Some highlights:

  • Over the last 10 years, first-time purchasers have accounted for 40-41 percent – on average – of all home buyers during the course of a year. The 2010 survey results show that 50 percent of all purchasers between July of 2009 and June of 2010 were first-time buyers. This is the largest share of first-time buyers in more than 19 years.
  • The Internet is playing an ever increasing role in the home search process. Thirty-six percent of buyers looked online for properties for sale as their first step in their search for a home to purchase. An additional 11 percent began by finding information online about the home buying process. Nine in ten buyers used the Internet in some way during their search process.
  • Home buyers still rely heavily on the expertise of real estate agents to navigate the housing market and help guide them through the home sales transaction. Eighty-three percent of buyers purchased a home through a real estate agent, up from 77 percent in 2009. Fifty-seven percent of buyers found their agent through a referral or used an agent they had used in the past to buy or sell a home.

To read more highlights, or even download your own FREE copy (pdf) of the 2010 Profile, CLICK HERE.


3. REALTOR Numbers Expected To Fall Further

The National Association of REALTORS reports a 25 percent drop in the number of property agents and brokers and a 33 percent decrease in home sales over the past five years.

NAR chief economist Lawrence Yun said at the group’s recent annual meeting in New Orleans that gross commission has fallen 50 percent over the same period. HomeServices of America Inc. Chairman Ron Peltier said the number of brokers nationwide is too high and that the ranks of Realtors will continue to fall. NAR’s membership has risen to approximately 1.1 million from 800,000 a decade ago, and Peltier said the right number of agents to meet the needs of the market is about 750,000.

With no signs of a market recovery, Realogy Franchise Real Estate Group CEO Alex Perriello said agents must strategize how to grow their market share and survive in a down market. Most firms are growing through mergers and acquisitions, he noted, and agents are working harder for less money.

[SOURCES: Information, Inc.; Dallas Morning News]

4. HOT LINE: Presentation of the Offer

QUESTION: Where is it in the law that the selling agent has to go through the listing agent, as opposed to the listing agent just being present when the offer is submitted to the seller?

ANSWER: The 2010 MLS Handbook discusses this issue.

Section 9: Rights of Cooperating Brokers in Presentation of Offers (Policy Statement 7.73):

Cooperating participants or their representatives have the right to participate in the presentation of any offer they secure to purchase or lease to the seller or lessor. They do not have the right to be present at any discussion or evaluation of the offer by the seller or lessor and the listing broker. However, if a seller or lessor gives written instructions to a listing broker that cooperating brokers may not be present when offers they procure are presented, cooperating brokers have the right to a copy of those instructions. This policy is not intended to affect listing brokers’ right to control the establishment of appointments for presentation of offers. (Adopted 11/04)

You can ask to be present when your client’s offer is submitted, but the seller does not have to agree to this. If they have instructed their agent that they do not want cooperating brokers present, then you may request to ask to see those instructions. Regardless, you would only be permitted to be present for the presentation. Once that had occurred, you would have to leave immediately so that the seller could speak to his/her agent in confidence.

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

5. Upcoming Courses and Events

Nov. 17-18: GRI 2, Smart Marketing (16 hrs. CE) – TAR Office, Nashville. For more information or to register, CLICK HERE.

Dec. 7: TAR Executive Committee Planning Session – TAR Office, Nashville.

Dec. 8: Leadership Session for Local Association Presidents and Presidents-elect – TAR Office, Nashville.

Dec. 9: RPAC/Government Affairs Training Session – TAR Office, Nashville.

Dec. 10: Homeownership Options Course (6 hrs. CE) – Murfreesboro. For more information or to register, CLICK HERE.

The complete 2011 schedule of GRI Courses (both Classroom and E-Class) will be posted SOON HERE.

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

6. Rates at Historic Low Levels Again

Freddie Mac reports that rates on fixed mortgages again fell to their lowest levels in decades this past week, with the average interest on 15-year loans dipping to 3.57 percent from 3.63 percent a week earlier and the average interest for 30-year loans sliding to 4.17 percent from 4.24 percent. That is the lowest since 1971. The impact of the favorable borrowing costs is being muted somewhat, however, by a high rate of joblessness, foreclosures, and tight credit

[SOURCES: Freddie Mac; Information, Inc.]


Click on any of the following to access:

Back Issues of the TAR DIGEST
Tennessee Assn. of REALTORS
TAR Education
Tennessee Real Estate Commission
Online Risk Reduction Resources