The 11-15-11 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville

1. The One Thing….
2. Home Prices Keep Dropping
3. Corker Wants To Wind Down Freddie & Fannie
4. HOT LINE: Lost Out in a Multiple-Offer Situation?
5. HOT LINE: Signing for Clients?
6. HAPPENINGS – This Week And Next
7. Rates Fall Below 4 Again
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. The One Thing….

In the movie City Slickers, Mitch (Billy Crystal) keeps trying to discover the “one thing” that Curly says is the secret to life.

This past week, in RISMEDia’s Power Broker Forum at the NAR Annual Convention, one thing was also the focus! Panelists included the CEOs and leaders of franchises and companies, all of which have managed to remain successful in this economy, and the theme of the discussion was “The One Thing Power Brokers Can’t Live Without.”

Actually, each of the panelists focused on much more than one thing, but one element common to all of their remarks was a much greater use of technology and the Internet to succeed in the “New Normal” of real estate.

Some snippets from the discussion:

“This is the first time in history that housing has not led us out of a recession.”

“You can’t focus on the market in general. You have to focus on creating your own market. When the pie gets smaller, table manners have to change [referencing the fact that you may need to take market share away from somebody else!].”

“Market share is everything and prospecting is essential. …Non-prospectors are looking for a pleasing activity. Prospectors are looking for pleasing results.”

“Owner-brokers must maintain a constant personal touch with those who work in their companies.”

“Everything we do and our entire ability to keep growing is due to technology. We do everything online.

Commenting on the growth of foreign investors purchasing residential real estate in the U.S.: “The number one group purchasing homes in Arizona recently was Canadians, not Americans.”

Sherry Cris, President and CEO of Better Homes and Gardens Real Estate, described her company’s “Beta Broker Project” in which they identified 25 up-and-coming companies across the country (mostly smaller companies, not affiliated with BH&G), to determine what factors these success stories have in common. She outlined four findings:

1. All of these companies use and take advantage of very simple technologies, tools easily and readily available on the Internet.
2. Office space is not necessary.
3. Social media (use of blogs, twitter, etc.) is at the core of their operations.
4. Providing exceptional customer service is at the heart of their value proposition. [In other words, they don’t compete on the basis of price, etc., but rather on the quality of their customer service.]

To read more about the Beta Broker Project and their findings, see:

2. Home Prices Keep Dropping

Home prices fell in nearly three-quarters of U.S. cities during the third quarter from a year ago, according to the National Association of REALTORS. The median price for previously occupied homes sold during the July-to-September quarter declined in 111 out of 150 metropolitan areas tracked by the NAR. The national median price dropped to $169,500, which is a 4.7 percent decline from $177,800 a year earlier. Home prices plunged 17.7 percent in Mobile, Ala., 17.6 percent in Phoenix, 17.5 percent in Allentown, Pa., and 15.3 percent in Salt Lake City, but soared 23.7 percent in Grand Rapids, Mich., 19.8 percent in South Bend, Ind., 17.7 percent in Palm Bay-Melbourne, Fla., and 13.1 percent in Youngstown, Ohio. According to NAR chief economist Lawrence Yun, “Home sales need to recover first, only then can prices stabilize.”

To read more, CLICK HERE.

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

3. Corker Wants To Wind Down Freddie & Fannie

A bill introduced by Sen. Bob Corker (R-Tenn.) on Nov. 9 aims to unwind Fannie Mae and Freddie Mac by creating a uniform legal structure for mortgage-backed securities to be regulated by the Federal Housing Finance Agency. The bill, similar to one up for consideration in the House, would require mortgage borrowers to submit full documentation and make a 5 percent down payment to secure funding. Additionally, Fannie Mae and Freddie Mac would be eliminated over a decade, with private investors to purchase their patents and databases.

To read more, CLICK HERE.

[SOURCES: Business Week; Information, Inc.]

4. HOT LINE: Lost Out in a Multiple-Offer Situation?

QUESTION: My client submitted an offer on a property in a multiple-offer situation. Our offer was cash with no stipulations, to close on the first available date. We were notified our offer was not accepted. MLS data showed (one month later) that the home sold for $5,000.00 less than our offer. My client is wondering why his offer was refused. MLS data shows the listing agent was also the selling agent. I’ve made email requests to the listing agent asking for an explanation, but had NO RESPONSE. Do we have any options? My client wants to go to court and ask for damages. I am trying to get some answers before that happens.

ANSWER: Note that TAR Form F-9, the Offer to Purchase, includes a place on the final page where a seller signs indicating their rejection of the offer; the sellers’ signatures would indicate that the offer was at least presented to them.

This is ultimately, however, a matter for your client to pursue if he/she desires. You have done all that you can by requesting additional information from the listing agent. At this point, all you can do is to recommend that your client speak to their own legal counsel in order to determine whether they have a cause of action.

If you feel that the agent has violated TREC Rules or the Broker’s Act, then you or your client can file a complaint with TREC. If you feel that the agent has violated the Code of Ethics, you can file a complaint with the local board. However, if the buyer is seeking some sort of compensation, they will need to speak with their own attorney who can advise them as to whether they have an actionable claim.

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

5. HOT LINE: Signing for Clients?

QUESTION: I represent a buyer and they are trying to do a FHA loan. My clients have a hard time getting out due to having a disabled child. They have authorized me to sign addendums, etc., on their behalf. Is this legal?

ANSWER: The only way that an agent should ever sign on behalf of his clients is with a power of attorney. However, we do not recommend that an agent get a power of attorney giving them authority to sign for their clients. This takes on a great deal of responsibility and potential liability. A client could easily state that he did not give permission for this to be done and there would be major problems for the agent.

Instead, try to work out something where you can deliver the documents to the clients. You can also send the documents to them electronically and have the clients sign and send them back electronically (fax, email, etc.). Just make sure that the agreements state that they can be signed electronically.

You also inquired about spouses signing for one another. We would not recommend this as well. There are some court cases which state that this may be binding in certain situations. However, we would not rely upon this. If we were a buyer’s agent, we would demand that the spouse sign as well. This will bind both of the spouses to the agreement. Another option is to have the contract contingent upon getting the second spouse’s signature within x period of time, especially if the spouse is unavailable.

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

6. HAPPENINGS – This Week And Next

Nov. 16: TransactionDesk Basic (3 hrs. CE) – MAAR Office, Memphis. For more information or to register, call 901-818-2421.

For information on the NEW 2012 GRI Program, go to:

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

7. Rates Fall Below 4 Again

Interest on 30-year fixed mortgages has slipped below 4 percent for the second time this year. This past week, the rate averaged 3.99 percent, down from 4 percent a week earlier. The 15-year fixed home loan rate also fell a notch, averaging 3.30 percent compared to 3.31 percent the previous week.

[SOURCE: Freddie Mac]

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