The 7-12-11 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville

1. NAR Thanks Tennessee Legislators
2. Good News for Nashville
3. Survey Results: What You Told Us!
4. HOT LINE: Roof Repair Delayed?
5. HOT LINE: Commission Based on Net Proceeds?
6. TAR Convention – Register NOW
7. Upcoming Courses
8. Rates Rise Somewhat
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. NAR Thanks Tennessee Legislators

The National Association of REALTORS (NAR) paid for a print ad that ran in the Friday, July 8th edition of THE TENNESSEAN newspaper, thanking the members of Congress from Tennessee who sent a message to federal regulators opposing a proposed 20% minimum downpayment rule on home mortgages. The ad also helped educate the public about this critical issue and included a web address that consumers could use to learn more information and take action.

The ad specifically thanked U.S. Senator Bob Corker, and U.S. Representatives Diane Black, Marsha Blackburn, Stephen Fincher, Chuck Fleischmann and Phil Roe.


2. Good News for Nashville

Forbes [Magazine] recently took a look at what the next decade has in store for America’s 52-largest cities, and came away with a bright forecast for Nashville.

Forbes, in partnership with the Praxis Strategy Group, projects Nashville to be the No. 3 boom town in the coming decade.
*** END QUOTE ***

To read more, CLICK HERE.

To see the entire article and ranking on the Forbes website, CLICK HERE.

NOTE: 4 of the top 10 cities are in Texas, and all but DC are located in the South or Southwest.

[SOURCES: Forbes; Nashville Business Journal]

3. Survey Results: What You Told Us!

First, THANK YOU to everyone who responded to our 2011 TAR Membership Survey! Here’s what you told us:

QUESTION 1. How do you feel about the future of the REAL ESTATE BUSINESS over the next 5 years?

21.6% of you are very optimistic about the industry’s future, while 34.3% are somewhat optimistic. 25.7% are neutral, and 18.4% are somewhat or very pessimistic.

QUESTION 2. How do you feel about the future of YOUR PERSONAL real estate business over the next five years?

You seem a little more optimistic about your personal business prospects. 27.5% of you are very optimistic about the future of your own business, while 34.1% are somewhat optimistic. 24.7% are neutral, and 13.8% are somewhat or very pessimistic.

QUESTION 3. Which TAR services, if any, are you currently using or have you used in the past, to help with your business?

The most popular responses to this question were: TAR Forms (95.0%), the TAR DIGEST (91.3%), TAR Education (56.5%), the TAR Hot Line (45.3%), and Governmental Affairs Updates (41.4%).

QUESTION 4. If you use social media for your business, which social media do you currently use?

Facebook (61.6%) and LinkedIn (46.3%) are the most popular. 17.6% use Twitter, 11.8% use ActiveRain, 9.5% use blogs, and 30.9% don’t use social media at all.

4. HOT LINE: Roof Repair Delayed?

QUESTION: My buyer client has asked that I contact the seller’s agent and request to have the seller’s homeowner’s insurance check for roof repair signed over to her at closing. The roof has hail damage and is scheduled to be replaced. Unfortunately, this is not the only roof in the area that needs replacing and the buyer has been told there is a three month backlog with qualified roofers. She is obtaining financing for the purchase of the home and is concerned that this will hold up closing. I informed my buyer that signing over insurance proceeds (after closing) would be considered fraudulent. Am I correct?

ANSWER: This happens from time to time. The important thing is for ALL parties (the buyer, seller, insurance company, and lender) to be on board. We would recommend getting everything in writing that this is permissible by the lender and the insurance company. Make SURE it is the actual lender, not a mortgage broker, giving permission to do this!

If this does not work, another option may be to have the funds held in escrow. Yet another option would be to have the seller sign an agreement that they would have the roof replaced within so many days.

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

5. HOT LINE: Commission Based on Net Proceeds?

QUESTION: We base our commission on net proceeds. This is a term that is disclosed up front when an offer is made and accepted on one of our listings. Is there anything illegal about doing it this way?

ANSWER: With regard to the commission, question, please see Note 1 to Policy Statement 7.23 of the 2011 Multiple Listing Policy regarding net sales price:

“Note 1: The compensation specified on listings filed with the multiple listing service by the participants of the service shall be expressed as a percentage of the gross sales price or as a definite dollar amount. Multiple listing services may, as a matter of local discretion, allow participants to offer cooperative compensation as a percentage of the net sales price, with net sales price defined as the gross sales price minus buyer upgrades (new construction) and seller concessions (as defined by the MLS unless otherwise defined by state law or regulation). The essential and appropriate requirement by a multiple listing service is that the information to be published shall clearly inform the participants as to the compensation they will receive in cooperative transactions unless advised otherwise by the listing broker in writing in advance of their submitting an offer to purchase. (Amended 5/10)”

Therefore, you would need to check with the local MLS to determine whether they permit offers of commission based upon net pricing.

There are also several provisions of the Code of Ethics which address this issue. Article 3 of the Code contains several standards of practice which shed some light on your situation, especially Standard of Practice 3-2: “To be effective, any change in compensation offered for cooperative services must be communicated to the other REALTOR prior to the time that REALTOR submits an offer to purchase/lease the property.

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

6. TAR Convention – Register NOW

This year’s TAR Convention offers several outstanding national speakers new to TAR events, as well as topics designed to give your business a needed boost! And the setting for the Convention couldn’t be prettier!

Register NOW to save $$$! The Registration Rate for Members increases by $55 after July 29!

You can get more information, or register online, at:

7. Upcoming Courses

July 12: 2011-2012 Residential Core Course (6 hrs. CE) – GNAR Office, Nashville. For more information or to register, call 615-254-7516.

July 13: Effective Negotiating for R.E. Professionals, a WCR Course (8 hrs. CE) – Gatlinburg. For more information or to register, contact:

July 14 – Aug. 17: GRI 1, Professionalism in Real Estate (16 hrs. CE) – An E-Class distance-learning course. For more information or to register, CLICK HERE.

July 18: TransactionDesk Basic (3 hrs. CE) – MAAR Office, Memphis. For more information or to register, call 901-818-2421.

July 28: 2011 TREEF Faculty Conference – TAR Office, Nashville. This is not an instructor training course, but rather a series of briefings and workshops for current instructors. For more information or to register, CLICK HERE.

Aug. 4: GRI 4, From Offer to Contract to Closing (16 hrs. CE) – MAAR Office, Memphis. For more information or to register, CLICK HERE.

Aug. 4 – Sept. 7: GRI 2, Smart Marketing (16 hrs. CE) – An E-Class distance-learning course. For more information or to register, CLICK HERE.

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!

8. Rates Rise Somewhat

Mortgage rates rose along with Treasury yields over the past week but are still affordable by historical norms, reports Freddie Mac. The 30-year fixed rate averaged 4.60 percent, up from 4.51 percent a week earlier and 4.57 percent a year ago; while the 15-year fixed loan averaged 3.75 percent, up from 3.69 percent the previous week and down from 4.07 percent a year ago. Five-year adjustable-rate mortgages bumped up to 3.30 percent from 3.22 percent a week earlier, and one-year ARMs drifted up to 3.01 percent from 2.97 percent; both adjustable rates were down from year-earlier levels, however.

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