The 6-7-11 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville


CONTENTS
1. Home Prices Hit Lowest Level in 2 Years
2. To Serve on a 2012 TAR Committee…
3. ALERT: TREC’s E&O Penalties
4. HOT LINE: Handling Money for Repairs?
5. HOT LINE: Disclosure of a Bonus?
6. Upcoming Courses
7. Rates Drop Again, for the 7th Week
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. Home Prices Hit Lowest Level in 2 Years

The S&P/Case-Shiller index shows that U.S. home prices slid 4.2 percent in the first three months of this year, falling to the lowest point since 2009. The movement, with values now below pre-crisis levels, represents a “double dip.” Wells Fargo Securities senior economist Mark Vitner notes that there are 2.2 million homes in foreclosure and another 2 million mortgages that are more than 90 days late. For prices to stabilize, he says, about a third of those foreclosures must be cleared.

[SOURCES: Washington Post; Information, Inc.]


2. To Serve on a 2012 TAR Committee…

2012 TAR Committee Request Forms are online. In the Members Only section of the TAR website, there is a page titled “Officer & Committee Forms” at: http://tnrealtors.com/members/officerforms.php

If you are interested in serving on a TAR Committee, you can access the application online. The DEADLINE for receipt of the Committee Request form is August 24, 2011!

On the same page, you can also access the online application form to be considered for nomination as a TREEF Trustee. The DEADLINE for receipt of the TREEF Trustee Application form is July 7, 2011!


3. ALERT: TREC’s E&O Penalties

This year the TN Real Estate Commission voted to levy a civil penalty in the amount of $1000.00 against: (1) Active Licensees who did not purchase E&O insurance before 4/1/2011; (2) Principal Brokers who have affiliates ($1000 per affiliate) who did not purchase E&O before 4/1/2011; and (3) People in Broker Release who did not purchase E&O before 4/1/2011!

In order to avoid a Formal Hearing, any licensee found to be delinquent must: (1) Sign the Consent Order and return it; (2) Pay the $1000.00 civil penalty; and (3) Show proof that they have E&O. This must be completed within 30 days. The only choices available for the licensees are to either comply fully with the Consent Order or have a formal hearing. IF scheduled for a formal hearing, the licensee will have additional monies to pay in the form of court filing fees (at least $200) and court costs of Formal Hearing (which can run another $300-$500). The formal hearings will be scheduled by the Commission’s legal department and the Administrative Law Judge who will hear the cases.

It pays to keep your E&O insurance current AND to make sure that the Tennessee Real Estate Commission has proof of your compliance!

[SOURCE: TN Real Estate Commission]


4. HOT LINE: Handling Money for Repairs?

QUESTION: I have a question with regard to a party purchasing a home and asking the seller to pay for materials to do needed repairs and remodeling prior to or on the date of closing of the transaction. The purchaser would agree to provide a material list to the seller and even set up an account at a building materials supplier for the seller to pay for the needed materials, to be delivered to the home after payment is received. The purchasers are using all of the funds they have available for down payment and closing costs, but the home needs work done. They have the ability to do the work, but not the money to buy the materials, so they wanted to negotiate the materials purchase as part of the offer on the home. My question is: Is this legal and not in violation of any mortgage rules or regulations and not in violation of HUD requirements?

ANSWER: Anything such as this would have to be fully disclosed to the lender. Make sure that this is the institution that is actually funding (and not just brokering) the loan. The lender would then make the determination if they would allow such a action. Make sure that you receive any permission in writing from the lender! This should protect you from any allegations of mortgage fraud.

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


5. HOT LINE: Disclosure of a Bonus?

QUESTION: If you are getting a certain percentage and a bonus for selling a property, do you have to disclose the bonus to your client?

ANSWER: Yes. Pursuant to Tennessee Code Annotated 62-13-312(b)(17), an agent can be disciplined for “Paying or accepting, giving or charging any undisclosed commission, rebate, compensation or profit or expenditures for a principal, or in violation of this chapter”

Furthermore, the NAR Code of Ethics addresses this issue in Article 7 for those agents who are REALTORS:

In a transaction, REALTORS shall not accept compensation from more than one party, even if permitted by law, without disclosure to all parties and the informed consent of the REALTOR’s client or clients.

Therefore, you will need to disclose this to the client. We would recommend that you get their approval in writing.

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


6. Upcoming Courses

June 8: 2011-2012 Residential Core Course (6 hrs. CE) – Clarksville Assn. Office, Clarksville. For more information or to register, call 931-552-3567.

June 8: 2011-2012 Commercial Core Course (6 hrs. CE) – NETAR Office. Gray, TN. For more information or to register, call 423-477-0040.

June 8: TransactionDesk Advanced Course (3 hrs. CE) – MAAR Office, Memphis. For more information or to register, call 901-818-2421.

June 8-9: ABR 2-Day Course (16 hrs. CE) – MAAR Office, Memphis. For more information or to register, call 901-818-2421.

June 9: Real Estate Marketing Reboot (8 hrs. CE) – MAAR Office, Memphis. For more information or to register, call 901-818-2421.

June 9: 2011-2012 Residential Core Course (6 hrs. CE) – EMTAR Office, Mt. Juliet. For more information or to register, call 615-75

June 13: 2011-2012 Residential Core Course (6 hrs. CE) – MTAR Office, Murfreesboro. For more information or to register, call 615-893-2242.

June 16: 2011-2012 Residential Core Course (6 hrs. CE) – GNAR Office, Nashville. For more information or to register, call 615-254-7516.

June 20: 2011-2012 Commercial Core Course (6 hrs. CE) – WCAR Office, Brentwood. For more information or to register, call 615-771-6845.

June 22: 2011-2012 Commercial Core Course (6 hrs. CE) – GCAR Office, Chattanooga. For more information or to register, call 423-698-8002.

June 27: 2011-2012 Commercial Core Course (6 hrs. CE) – MAAR Office, Memphis. For more information or to register, call 901-818-2421.

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 Drop Again, for the 7th Week

Freddie Mac reports a drop in the 30-year fixed mortgage rate to 4.55 percent in the week ended June 2 from 4.60 percent the previous week, marking the lowest level of the year. Freddie Mac chief economist Frank Nothaft attributes the decline to reports indicating a significant decline in first-quarter home prices and a possible slowdown in economic growth. The 15-year fixed mortgage rate slipped to 3.74 percent from 3.78 percent, the five-year ARM stayed at 3.41 percent, and the one-year ARM edged up to 3.13 percent from 3.11 percent; all mortgage rates are down from a year ago.

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