The 7-19-11 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville


CONTENTS
1. NAR Wins FTC Concession on MARS
2. HOT LINE: Two Clients Want the Same Property?
3. HOT LINE: Unlicensed Assistant’s Duties?
4. HOT LINE: Percentage of Profit In Lieu of Commission?
5. Register for TAR Convention & Save $$$
6. Online CE Discounted in July!
7. Upcoming Courses
8. Rates Near 2011 Lows
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 Wins FTC Concession on MARS

NAR has made an important step in resolving the confusion caused by the Federal Trade Commission’s (FTC) Mortgage Assistance Relief Services Rule (MARS) among real estate professionals who provide assistance to struggling homeowners in negotiating short sales with servicers on the sale of the home.

On July 15, 2011, the FTC announced that it will forbear from enforcing most provisions of its MARS Rule against real estate professionals who assist consumers in obtaining short sales from their lenders or servicers.

Effective immediately, real estate professionals acting in their licensed capacity will no longer need to comply with most of the Rule’s requirements, including the required disclosures, advance fee ban, and recordkeeping requirements.

This forbearance of enforcement will only apply to real estate brokers (and real estate agents under their direction and control) who are:

  1. Licensed and maintain good standing pursuant to any applicable state law requirements;
  2. In compliance with state laws governing the practices of real estate professionals; and
  3. Assisting or attempting to assist a consumer in negotiating, obtaining or arranging a short sale of a dwelling in the course of securing the sale of the consumer’s home.

The FTC will still enforce the Rule’s prohibition against misrepresentations made by a real estate professional while assisting a consumer in negotiating or obtaining a short sale.

The FTC’s forbearance should have the effect of resolving this issue for real estate professionals who are acting in their licensed capacity. While the Consumer Financial Protection Bureau and state attorney generals can still enforce the Rule as written, both groups are expected to follow the FTC’s lead. NAR will continue to work on obtaining a complete resolution of this issue.

[SOURCE: NAR]


2. HOT LINE: Two Clients Want the Same Property?

QUESTION: I am the designated buyer’s agent for two (2) different buyers. These buyers are now looking at the same property and both want to put an offer on the same house. First, can I represent two (2) buyers on the same property? Second, obviously this is going to end up in a multiple offer situation. How should that be handled given the circumstances?

ANSWER: This is an unusual situation. There are several things which you may do, each with their own drawbacks.

The most conservative (and safest) route would be to explain to both buyers the situation. Then the principal broker can assign two different agents within the company (who have no knowledge of this matter), to write each offer on behalf of the two buyers. Then, if one of these offers is accepted, you can continue to work with that buyer on that transaction. This will prevent any appearance of inappropriately sharing information. The downside would be that you would likely need to share a portion of the commission with that other agent. However, it would greatly lessen the likelihood of someone alleging that you inappropriately shared confidential information.

The second option would be to explain the situation to your agents. Then the principal broker can work with one of the buyers while you work with the other. We would strongly recommend having a third agent (who is neutral) work with you while preparing the offer. This provides you with a witness and security against allegations of inappropriate sharing of information. The drawback of this is that it does increase the likelihood of one of the parties filing a complaint or a lawsuit for breach of confidentiality (even if not true).

A third option (and most dangerous) would be to default to a facilitator for both buyers. You would only be able to write the offers, but not truly assist them. If you made recommendations for contingencies, you would have to make the same recommendations to each buyer.

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


3. HOT LINE: Unlicensed Assistant’s Duties?

QUESTION: If I have an assistant, are they allowed to unlock an empty house that has a tumble lock on it, as long as they do make any comments, in order for a buyer to do their inspection?

ANSWER: According to the Tennessee Real Estate Commission, an unlicensed assistant MAY “Unlock property under the direction of a licensee….” This is one of nineteen (19) things that an unlicensed assistant may do. TREC policy also specifies seven (7) things that an unlicensed assistant MAY NOT do.

To see the complete listings, you need to go to the website of the TN Real Estate Commission. They are located at:
http://www.state.tn.us/commerce/boards/trec/index.shtml

Download a copy of the Official Manual of TREC (2008 Edition). There is a link to it on the right-hand side of that page. The information you want is on pages v-vi at the beginning of that Manual.

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


4. HOT LINE: Percentage of Profit In Lieu of Commission?

QUESTION: I have a real estate investor that wants me to find property for him. He wants to pay me a percentage of the profits instead of a commission. Is that legal?

ANSWER: This would not be permitted under Tennessee rules. Pursuant to TREC Rule 1260-2-.07, “No broker or affiliate broker shall accept or enter a listing based on a ‘net price’ (i.e., a price excluding the customary commission and expenses associated with the sale).” Since this would be based on a percentage of the profits, this sounds a lot like a net listing.

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


5. Register for TAR Convention & Save $$$

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: http://tnrealtors.com/meetings/convention/schedule.php


6. Online CE Discounted in July!

To celebrate our nation’s independence, The CE Shop (our primary online education partner) is offering TAR members 15% OFF your Online Continuing Education during the month of July! To access any of the CE Shop’s courses, go to: http://tarnet.theceshop.com/

…and enter the Promo code: July15


7. Upcoming Courses

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.


8. Rates Near 2011 Lows

The 30-year fixed mortgage rate averaged 4.51 percent this past week, falling from 4.60 percent a week earlier, reports Freddie Mac. Also, average interest on 15-year fixed loans hit its lowest level of 2011, declining to 3.65 percent from 3.75 percent the previous week.

Mortgage rates tend to follow the yield on the 10-year Treasury note, which spiked downward recently as investors fled to government bonds following an unfavorable jobs report.

[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