The 2-22-11 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville

1. Banks Pushing Higher Down Payments
2. De-Mystifying Credit Scores
3. SURVEY RESULTS: Education and Licensing
4. DEADLINES – TAR Spring Conference!
5. HOT LINE: “Future Home Of ____”?
6. HOT LINE: Selling Agent Is Builder’s Spouse
7. Upcoming Events and Courses
8. Rates Ease a Little
9. Useful Web Links

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

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

1. Banks Pushing Higher Down Payments

The Obama administration is calling for a phased-in hike in the minimum down payment on conventional mortgages to 10 percent. Experts say higher down payments combined with rising interest rates could further depress home prices, with Mortgage Bankers Association President and CEO John Courson adding that lower affordability could prompt some consumers to rent instead.

This past week, the Wall Street Journal also reported:

“The median down payment in nine major U.S. cities rose to 22% last year on properties purchased through conventional mortgages, according to an analysis for The Wall Street Journal by real-estate portal That percentage doubled in three years and represents the highest median down payment since the data were first tracked in 1997.”

[SOURCES: Wall Street Journal; Information, Inc.]

2. De-Mystifying Credit Scores

With credit scores playing an ever-larger role in qualifying for financing a home purchase, knowing how scores are calculated can help you help your clients understand the process!

A very readable article by Realty Times Managing Editor Carla Hill (“Explaining Credit Scores”) provides a helpful summary of how Experian, TransUnion, and Equifax arrive at their scores. In it she tackles a few of the more common questions, such as whether or not someone should close a credit card account with a zero balance or an unused card.

To read the entire article, CLICK HERE.

[SOURCE: Realty Times]

3. SURVEY RESULTS: Education and Licensing

THANK YOU to everyone who took a few moments this past week to respond to our survey on education and licensing! What you told us:

36.4% of you feel that the recession has had no effect on the problem of untrained or unprofessional new licensees in the business, and the problem is as bad today as it was several years ago. 32.8% of you feel that, because of people leaving the business, the problem is less severe today, and 30.8% of you feel that the problem is getting worse every year, with or without the recession.

55.6% of you feel that the current pre-licensing requirement of 90 hours of courses is about right. 41.7% of you feel that 90 hours is too short, and 2.7% of you feel that it’s too long.

63.3% of you feel that new affiliate brokers should take prescribed transaction-related training of at least 16 hours in length during their first two years of licensing, without being able to choose which courses they take. 18.7% feel that new affiliates should take more than 16 hours of Continuing Education during their first two years of licensing, and 18.0% favor no change in the requirements for affiliate brokers.

49.7% of you attribute the licensee incompetence or sloppiness you’ve encountered PRIMARILY to the licensee’s lack of concern and responsibility, while 29.8% feel that the reason was primarily the licensee’s lack of knowledge, and 20.5% attribute it to a lack of supervision by the licensee’s managing broker.

81.7% of you feel that Tennessee should conduct a criminal background check of new licensees, while 12.0% of you are not sure, and 6.3% of you are opposed to this idea.

4. DEADLINES – TAR Spring Conference!

Our TAR Spring Conference is quickly approaching, and there are TWO DEADLINES that you need to keep in mind!

This coming Fr1day, February 25, is the cutoff date for hotel room reservations at the Cool Springs Marriott, the site of this year’s Conference. For reservations online or by phone, go to:

The deadline for the Early-Bird Registration Rate ($75) for this year’s Spring Conference is Monday, March 7, just two weeks away! After that date, the rate goes up to $125!

Make plans to attend an outstanding educational program and register TODAY! For more information about the March 21-23 Conference, go to:

5. HOT LINE: “Future Home Of ____”?

QUESTION: If we list a house and receive an offer that is accepted from a prospective buyer, we would like to put a marker on top of our yard sign that says “Future Home of (prospective buyer’s name)”. Can we do this without getting written consent from the buyer or the buyer’s agent?

ANSWER: This is a tricky situation. First, you would absolutely have to get the permission of BOTH the buyer AND seller to do this. Secondly, this could be misleading since it might be the future home of Mr. Buyer, but might not. There are contingencies that could prevent this. Third, this type of sign may discourage back up offers being submitted.

[SOURCE: TAR Legal & Ethics Hot Line Attorneys]

6. HOT LINE: Selling Agent Is Builder’s Spouse

QUESTION: I have an agency question. I have an agent whose husband is a builder, and she has his houses listed. As a facilitator, she has sold a couple one of his houses. Was “facilitator” the correct status for her in this transaction?

ANSWER: We would NOT recommend that the agent default to a facilitator status in transactions in which she is selling her husband’s property. It may or may not be technically wrong, but it certainly doesn’t pass the “smell” test. If something goes wrong in the transaction, the buyers will surely claim that the licensee was truly representing her husband. Moreover, depending upon how ownership of the builder’s homes is structured, the licensee may even have an ownership interest in the properties and could not function as a facilitator.

At the very least, the licensee’s relationship to the builder must be fully disclosed to the buyers’ satisfaction, giving them an opportunity to secure their own representation in the transaction.

[SOURCE: TAR Legal & Ethics Hot Line Attorneys]

7. Upcoming Events and Courses

Feb. 23: 2011-2012 Core CE Course (6 hrs. CE) – Clarksville Assn. of REALTORS. For more information or to register, call 931-552-3567.

Feb. 24 – March 30: GRI 3, Financing the Successful Transaction (16 hrs. CE) – an E-Class (distance-learning) course. For more information or to register, CLICK HERE.

March 2: Workshop for Agency Instructors (4 hrs. CE) – TAR Office, Nashville. For more information or to register, CLICK HERE.

NOTE: This Workshop for Agency Instructors was originally scheduled for Feb. 22, but was rescheduled for March 2!

March 10-11: The Learning-Centered Instructor Workshop (16 hrs. CE) – TAR Office, Nashville. For more information or to register, CLICK HERE.

March 21-23: TAR Spring Conference (8 hrs. CE) – Cool Springs Marriott, Franklin, TN. See new item #4 above for more information!

March 24-25: The REALTORS Land Institute is holding their 2011 National Land Conference in Nashville this year at the Hilton Nashville Downtown. If you are involved in land sales, this is a unique opportunity to attend a national conference without traveling cross-country! For more information or to register, CLICK HERE.

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.

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

8. Rates Ease a Little

Freddie Mac’s weekly survey shows that the average interest on a 30-year fixed mortgage was 5 percent for the week ended Feb. 17, down from 5.05 percent the previous week. Rates on 15-year fixed loans averaged 4.27 percent, meanwhile, a decline from 4.29 percent the week before. Five-year adjustable-rate mortgages fell to 3.87 percent from 3.92 percent, but one-year ARMs were up to 3.39 percent from 3.35 percent.

[SOURCES: Freddie Mac; Information, Inc.]

9. Useful Internet Links

Click on any of the following to access:

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