The 4-19-11 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville


CONTENTS
1. How Homebuyers Find Their Agent
2. HOT LINE: Estimating Square Footage?
3. HOT LINE: Signing for a Client?
4. HOT LINE: More on Disclosure of Offer Terms?
5. TECH TIP from REBarCamp
6. Upcoming Events and Courses
7. Rates Still Rising Slowly
8. 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. How Homebuyers Find Their Agent

The most recent NAR survey of home buyers and sellers underscores the critical importance of nurturing your referral business:

  • Roughly half of buyers find their real estate agent through a referral from a friend, neighbor, or relative.
  • First-time buyers are more likely to find their real estate agent from a referral.
  • Repeat buyers more often use an agent they previously used to buy or sell a home.
  • One in ten buyers found their real estate agent through a website.
  • There is little difference across type of households; however, unmarried couples tended to rely on referrals slightly more than other types of households.

For more detailed information and a downloadable PowerPoint presentation on the 2010 Profile of Home Buyers and Sellers, CLICK HERE.

To read more, CLICK HERE.

[SOURCE: NAR]


2. HOT LINE: Estimating Square Footage?

QUESTION: Please advise whether a licensee may measure a listing to estimate and state the price per square foot of gross living area (“GLA”). Are there any rules or regulations against measuring for GLA and stating the results in listing information regarding the home?

ANSWER: Square footage (or gross living area) is difficult to determine and is ripe for a misrepresentation claim. There are several acceptable ways in which to determine square footage. Additionally, if you have 3 different people determine square footage, you are likely to get three different answers. If the square footage included in the MLS is incorrect, the REALTOR could be liable for negligent misrepresentation depending upon what he or she did to verify the information obtained and when the discrepancy is discovered (i.e. before contract entered into, after closing).

We recommend that square footage be listed as an “approximate” amount and that a disclaimer be included noting that the amount of square footage is not guaranteed. We would also recommend either listing the square footage as what is listed on the tax records or as calculated by an appraiser, and indicate the source. In this situation, the advertisement should contain a disclosure that the square footage includes the room containing the heating and air unit in order to be safe if you choose to include it in the square footage. The important thing is that the information concerning square footage is disclosed so as to avoid misrepresentation. We would recommend going with either the tax records or from an appraisal.

[SOURCE: TAR’S Legal and Ethics Hot Line Attorneys]


3. HOT LINE: Signing for a Client?

QUESTION: I am designated agent for the seller and he is out of state. We do have an accepted contract, but – due to time being of the essence and his job – the seller signed and returned the contract before getting the answer to a question he had. Once his question was answered, he asked me to mark through an item on the VA/FHA Addendum and initial for him, with my initials. This was sent to the buyer’s agent who will now not except this because my initials and not the seller’s are on the change. I do not have a Power of Attorney for the seller, but I was told by my instructor for my pre-licensing several years ago that as a designated agent that this would be legal. Is this wrong?

ANSWER: You were misinformed by your pre-licensing instructor.

We NEVER recommend signing or initialing for a client unless you have a Power of Attorney. Furthermore, we do not recommend that an agent take on the responsibility of having a Power of Attorney for a client in a matter. This creates the serious possibility of a lawsuit if anything were to go wrong on the transaction. You should forward the VA/FHA Addendum to the seller and have him initial and date it. This can be done via email, fax, or overnight mail.

[SOURCE: TAR’S Legal and Ethics Hot Line Attorneys]


4. HOT LINE: More on Disclosure of Offer Terms?

QUESTION: This question has to do with disclosing offer terms of on buyer to another buyer. While I am not necessarily disagreeing with your recent answer to this question in the 4-5-11 DIGEST, would you expand on your answer based on Standard of Practice 1-13 and Standard of Practice 1-15 in the Code of Ethics, in conjunction with TN law?

ANSWER: Please keep in mind that state law will trump the Code of Ethics in a situation where they differ. But, to answer your questions, Standard of Practice 1-13 does require that when you are working with buyers, you must advise them that it is possible for the sellers or seller’s agents to disclose the contents of an offer unless there is a confidentiality agreement in place.

Standard of Practice 1-15 really would not play into the disclosure of terms. It simply states that if you have the seller’s permission, you can disclose the existence (not content) of other offers if asked. You could also disclose whether these were in-house or out of house offers, if asked (again with the seller’s permission).

We understand that sometimes sellers want the contents of offers disclosed. There is nothing that specifically states that this is prohibited. However, given the practice, it is likely that this would be considered confidential information if you have received the offer before the confirmation of agency status is presented (under TN law 62-13-403).

Furthermore, it places the agent in a very dangerous position due to the requirements of 62-13-403(1) and (3) wherein agents have a duty to all parties to exercise reasonable skill and care in providing services to all parties and to provide services to all parties with honesty and good faith. The problem with disclosing the contents of one offer to only one buyer involves fairness and good faith. If you disclose to one, you must disclose to all. This greatly increases the likelihood that someone will be disappointed and will cry foul stating that they were not treated fairly due to the  possibility of never-ending round of offers wherein the parties are trying to “out bid” one another. Therefore we do NOT recommend this practice since it can result in lawsuits and complaints with TREC.

[SOURCE: TAR’S Legal and Ethics Hot Line Attorneys]


5. TECH TIP from REBarCamp

From my perspective as just one of many attendees at last week’s REBarCamp, it was a success and a great experience. Thanks to the many volunteers who put it on! For anyone who missed it, we’re sure that – based on this year and last – another one will be held next year.

One of the sessions reminded me of a tool that I use daily …so much, in fact, that I tend to take it for granted that everybody surely knows about it and uses it as much as I do! That tool is Dropbox, a FREE way to save files in a folder — both on my PC and “in the cloud” — that are then accessible to me no matter where I am or on which computer I’m working! Any file you save to Dropbox also instantly saves to your other computers, the Dropbox website, even your phones.

Dropbox works with Windows, Mac, Linux, iPad, iPhone, Android and BlackBerry. It even works when you’re offline. You always have your files, whether or not you have a connection. And your files are always available from the secure Dropbox website.

You can ALSO use Dropbox to share files easily with an assistant, team member, or client!

You get 2GB of Dropbox for FREE, with subscriptions up to 100GB available. To make sure you always have access to your “stuff” when you need it, CLICK HERE.

— Pug Scoville


6. Upcoming Events and Courses

April 21: 2011-2012 Core Course (6 hrs. CE) – Smithville, TN. For more information or to register, call 615-758-9851.

April 21: Homeownership Options for Tennessee’s Workforce (6 hrs. CE) – GCAR Office, Chattanooga. For more information or to register, call 423-698-8001.

April 21-22: LEADERSHIP TAR Retreat #1. Registration is still OPEN for the 2011 Leadership TAR Program, that begins APRIL 21! For more information or to become a part of it, CLICK HERE.

April 27-28: GRI 1, Professionalism in Real Estate (16 hrs. CE) – TAR Office, Nashville. For more information or to register, go to: https://www.123signup.com/event?id=vtxtp

April 28 – June 1: GRI 6, Sticky Situations (16 hrs. CE) – an E-Class distance-learning course. For more information or to register, go to: https://www.123signup.com/event?id=vttnj

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

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


7. Rates Still Rising Slowly

The 30-year fixed mortgage rate remains under 5 percent, although it continues to rise. The average interest on 30-year loans is up for the fourth straight week, increasing from 4.87 percent the prior week to 4.91 percent this past week, according to Freddie Mac. The 15-year fixed mortgage also drifted higher this past week, increasing from 4.10 percent to 4.13 percent.

[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
TAR on Facebook
Follow TAR on Twitter
Online Risk Reduction Resources
Online Resources for Association Leaders
Tennessee Real Estate Commission