The 1-25-11 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville


CONTENTS
1. Inexpensive Ways To Boost Resale Value
2. Homes Getting Smaller
3. HOT LINE ADVISORY: E&O Insurance
4. HOT LINE: Short Sale Fraud/Flopping?
5. Register for TAR Spring Conference!
6. Upcoming Events and Courses
7. Rates Inch Upward
8. Useful Web Links

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

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1. Inexpensive Ways To Boost Resale Value

Homegain.com just released the results of its 2011 home improvement survey, showing which less-costly home improvements tend to produce the biggest return on investment (ROI):

*** BEGIN QUOTE ***
…the top five home improvements (under $5,000) that real estate professionals recommend to home sellers based on average cost and return on investment (from highest to lowest ROI) are:

  • Cleaning and de-cluttering ($290 cost / $1,990 price increase / 586% ROI)
  • Lightening and brightening ($375 cost / $1,550 price increase / 313% ROI)
  • Home staging ($550 cost / $2,194 price increase / 299% ROI)
  • Landscaping ($540 cost / $1,932 price increase / 258% ROI)
  • Repairing electrical or plumbing ($535 cost / $1,505 price increase / 181% ROI)

Cleaning and de-cluttering continues to rank as the top suggested home improvement (since the survey was originally conducted in 2000), recommended by 99 percent of real estate professionals, costing less than $300 and returning a value of nearly $2,000 to the home’s sale price, or a 586 percent return on investment.
*** END QUOTE ***

To read the entire article summarizing the survey, CLICK HERE.

[SOURCE: Homegain.com]


2. Homes Getting Smaller

*** BEGIN QUOTE ***
The average size of a new single-family home in 2010 was 2,377 square feet, down from 2,438 square feet in 2009 and down from the peak of 2,520 square feet in 2007 and 2008, according to U.S. Census Bureau data presented by Rose Quint, assistant vice president of survey research for NAHB at the International Builders’ Show in Orlando Thursday, Jan. 13.

And the trend will only continue, Quint said, with the 2015 new home size currently projected at 2,150 square feet with fewer bathrooms and smaller garages.

It’s hard to say whether home sizes will decline to 1970 levels of 1,500 square feet. But Quint says she believes smaller sizes are here to stay based on demographics.

…This rising segment of older home owners will not want to care for huge spaces, Quint said. Then you have Generation Y buyers who are very energy conscious. “People are coming to realize, ‘Let’s buy what we need,'” said Quint.
*** END QUOTE ***

To read more, CLICK HERE.

[SOURCE: REALTOR Magazine Online]


3. HOT LINE ADVISORY: E&O Insurance

You should be aware of a new Tennessee Real Estate Commission policy that was adopted December 1, 2010. We provide highlights below as a service to the Commission:

If you have not already renewed your E&O policy, do so immediately via Rice Insurance’s website at: http://www.risceo.com When you complete the transaction, you will be given the option to print a pdf copy of your certificate of coverage. Print that certificate of coverage and fax it to the TREC office at 615-741-0313.

A licensee failing to renew an Errors and Omissions insurance policy prior to expiration may be subject to a civil penalty of up to one thousand dollars ($1,000.00) per day for each day that licensee remains uninsured or other discipline including license suspension or revocation.

A Principal Broker who fails to ensure that each affiliated licensee maintains E&O insurance may be subject to a civil penalty of one thousand dollars ($1,000.00) per uninsured affiliated licensee.

The names of all uninsured licensees will be published on the TREC website and in the TREC News Journal.

You can download the entire policy on lapsed E&O insurance adopted by the Tennessee Real Estate Commission on December 1, 2010, by using the following link:
http://www.state.tn.us/commerce/boards/trec/documents/NewEandOpolicyforweb.pdf

[SOURCE: TN Real Estate Commission]


4. HOT LINE: Short Sale Fraud/Flopping?

QUESTION: We have a buyer that wants to make an offer on a property. This is a short sale. The selling agent came back and said he had an investor in place and we would be buying from the investor at a profit, instead of the seller and/or bank. Is this legal? How can we sign paperwork with someone who doesn’t even own the property?

ANSWER: This could be an example of short sale fraud or “flopping”. Depending upon who knew what was occurring and whether the lender knew about a potentially higher offer, this transaction could be problematic.  The FBI has begun investigating this type of transaction. For more information on “flopping”, please see the following links:

http://www.realtor.org/rmodaily.nsf/pages/news2010061006?opendocument
http://www.realtor.org/rmolaw_and_ethics/articles/2010/1008_law_mortgagefraudscams
http://www.fbi.gov/stats-services/publications/mortgage-fraud-2009/2009-mortgage-fraud-report

This transaction may be fine, but it would warrant some additional investigation and consultation with an attorney to ensure that nothing dubious is occurring.

[SOURCE: TAR Legal & Ethics Hot Line Attorneys]


5. Register for TAR Spring Conference!

REMEMBER: DON’T look for a Conference brochure in the mail …it’s not coming! In an effort to tighten our belts financially and keep the early-bird rate for members at $75, TAR’s leadership opted to promote this Conference (and future Conferences and Conventions) using email and our website!

As in recent years, this year’s TAR Spring Conference will feature 8 hours of outstanding education sessions on March 21 & 22 – including sessions by national speakers Gee Dunsten, Pam Ermen, and Richard Flint, as well as THDA’s Debbie Reeves. We’ll be back at the Cool Springs Marriott and Convention Center in Franklin, TN.

Access the Conference schedule, registration information, hotel information and much more at: http://tnrealtors.com/main/meetings/


6. Upcoming Events and Courses

Jan. 26: Survive and Thrive Program (4 hrs. CE) – Jackson. To register, call 731-668-4907. This program includes two courses: “Timely Tools,” a survey of free and inexpensive tools you can use to build your business; and “Navigating Our Changed Economy,” a panel-based program examining what works and what doesn’t work in today’s market.

Jan. 26: 2011-2012 Core Course (6 hrs. CE) – GNAR, Nashville. To register, call 615-254-7516.

Jan. 27 – March 2: GRI 5, Systems for Success (16 hrs. CE) – an E-Class distance-learning course. For more information or to register, CLICK HERE.

NOTE: Beginning in 2011, due to its content and use of Internet tools, GRI 5: Systems for Success will only be offered in E-Class format. This course remains a requirement for the GRI designation.

Jan. 27: At Home With Diversity (7 hrs. CE) – MAAR, Memphis. To register, call 901-818-2421.

Feb. 3: Agency in Tennessee (4 hrs. CE) – Chattanooga Assn., Chattanooga. To register, call: 423-698-8002.

The complete 2011 schedule of GRI courses (both Classroom and E-Class) is online HERE.

LEADERSHIP TAR: Registrations are now being taken for the 2011 Class of Leadership TAR! For more information or to become a part of it, CLICK HERE.

INSTRUCTOR TRAINING: Registration is now open for our two-day instructor-training program – “The Learning-Centered Instructor Workshop” (16 hrs. CE) – to be held March 10-11, 2011, in Nashville at the TAR Office. For more information or to register, CLICK HERE.

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


7. Rates Inch Upward

Freddie Mac reports that average interest on a 30-year fixed mortgage rose slightly this past week to 4.74 percent from 4.71 percent a week earlier. The mortgage financier adds that 15-year loans averaged 4.05 percent from 4.08 percent over that same time span. After spiking more than half a percentage point in the last two months of 2010, mortgage rates have barely budged since the first of the year.

[SOURCES: Freddie Mac; Information, Inc.]


8. Useful Internet Links

Click on any of the following to access:

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