The 12-20-11 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville

1. Three Christmas Wishes!
2. A Unique Opportunity in 2012
3. REALTORS Cautioned on Loan Talk
4. Another 2-4 Percent Drop in Home Prices?
5. HOT LINE: Repair Wasn’t Done?
6. HOT LINE: Can I Incorporate Myself?
7. HAPPENINGS – This Week and Next
8. 30-Year Rates Hit Record Low Again!
9. Useful Web Links
10. No DIGEST Next Week

To ask a TAR Legal and Ethics Hot Line question, go to:

For other questions about this newsletter, please use the “CONTACT” form at:

1. Three Christmas Wishes!

As this is the final TAR DIGEST of 2011, the staff and leadership of TAR want to wish, for every TAR member:

  1. Times of rest, reflection, and recreation with family and friends during the holidays!
  2. A rededication of your time and energies to the things that matter most as you approach the New Year!
  3. A more prosperous 2012 than you enjoyed in 2011!

…and thank you for taking the time to read the DIGEST in 2011!

2. A Unique Opportunity in 2012

As you approach the New Year, take a moment to think about leadership. Your leadership. Never has the need been greater for effective leadership of our real estate companies and our REALTOR associations! It may be YOUR time to step forward …

That’s why we encourage every TAR member to consider applying for Leadership TAR this year — whether you currently hold an elective office in your local association of REALTORS OR you’ve simply thought about it but haven’t done much about those thoughts before now!

Dates for the three Leadership TAR Retreats are: April 19-20, June 7-8, and August 2-3.

Recognizing the financial pressures on everyone, meals at all three retreats are now included as part of the tuition …AND tuition for the program is not due until March of 2012, after the 2012 Class has been accepted!

The deadline for applications is JANUARY 15.

To learn more, go to:

3. REALTORS Cautioned on Loan Talk

Under the Federal Trade Commission’s “Mortgage Acts and Practices” rule enacted in August, real estate professionals who give lender rate sheets to their clients or discuss mortgage products with them cannot make misleading statements. You also must keep a record for two years of what you say or write.  However, the rule does not prohibit referrals to lenders or recommendations that clients obtain loan information from lenders. While not required, some real estate professionals may provide disclaimers emphasizing that they are not mortgage professionals and encouraging clients to speak to lenders directly.

To read more about this and other new to watch, go to:

[SOURCE: REALTOR Magazine Online]

4. Another 2-4 Percent Drop in Home Prices?

The Zillow Home Value Index shows a 0.3 percent seasonally adjusted decrease in home prices across the nation to a mean of $147,900 in October, with prices down 5.1 percent year over year. Although homes are very affordable and mortgage rates remain low, Zillow believes a large supply of homes on the market and weak demand as buyers worry about additional price drops will cause residential values to fall another 2 percent to 4 percent before hitting bottom in 2012. Ten of the 156 metro areas surveyed by Zillow saw prices rise from a year ago. However, prices plummeted 14.7 percent in Atlanta and around 11 percent in Las Vegas and Tampa.

To read more, go to:

[SOURCES:; Information, Inc.]

5. HOT LINE: Repair Wasn’t Done?

QUESTION: I represent a seller that is getting ready to sell their property, which they have owned for about a year. There was a damaged commode that needed a new wax ring kit, which the previous owner claims they repaired. Either it was not repaired or repaired incorrectly because a problem still exists with the commode. The current owners insurance has denied their claim for damages stating preexisting conditions. I have contacted the previous listing agent and my clients’ previous buyer’s agent and informed them of the situation. I would like to request some type of proof that the repair was done or attempted to be done. Legally, what can I request and from whom should I request it?

ANSWER: You can request that the former seller’s agent provide you with proof that the repair was done or attempted. However, beyond that, we would recommend not getting more involved. If the current sellers need more assistance, they should speak with their own attorney. If you do anything further, you could inadvertently engage in the practice of law without a license. Furthermore, you could assume some liability where you do not have any.

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

6. HOT LINE: Can I Incorporate Myself?

QUESTION: Can I, as a licensed REALTOR, incorporate myself and have the company where I hold my license pay my corporation any commissions I earn? Or, is there an issue with the company paying commission to my corporation versus paying commission directly to me?

ANSWER: An agent can only be paid by their broker. Therefore, an individual licensee that has “incorporated” or “LLC’ed” himself CANNOT be paid a commission through the company. The individual holds the license, not the company. The only time that a company can hold a license is if it is a firm license.  A company cannot be issued an individual license.  Furthermore, pursuant to Tenn. Code Ann. 62-13-302(a):

“It is unlawful for any licensed broker to employ or compensate any person who is not a licensed broker or a licensed affiliate broker for any of the acts regulated by this chapter. A licensed nonresident broker may pay a commission to a licensed broker or another state if such nonresident broker does not conduct in this state any of the negotiations for which a commission is paid.”

In addition, Tenn. Code Ann. 62-13-312(b)(11) states that an agent can be disciplined for “Accepting a commission or any valuable consideration by an affiliate broker for the performance of any acts specified in this chapter, from any person, except the licensed real estate broker with whom the licensee is affiliated”.

An agent can only be paid in the name on their license – whether it is a firm license or their individual license.

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

7. HAPPENINGS – This Week and Next

No classes are scheduled between now and the end of the year, although online CE classes are still available for those who wish to take them!

During the month of December, The CE Shop (our partner for online courses) is offering TAR members 25% OFF Online Continuing Education courses! This promotion started December 1st and ends December 31st. Use the Promo Code DEC25. To access courses, go to:

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

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

8. 30-Year Rates Hit Record Low Again!

Average interest on 30-year fixed mortgages slipped to 3.94 percent in Freddie Mac’s latest survey, matching a record low reached in October. Rates on 15-year loans also landed at a record for the past week, at 3.21 percent. Interest has held below 5 percent for virtually all of 2011, with the exception of two weeks, and analysts say even lower rates may be on the horizon. Long-term mortgage costs follow the 10-year Treasury yield, which is expected to drop next year.

[SOURCES: Freddie Mac; Information, Inc.]

9. Useful Internet Links

To access:

Back Issues of the TAR DIGEST:

Tennessee Assn. of REALTORS:

TAR Education:

Follow TAR on Twitter at:

TAR’s LinkedIn page:

TAR’s page on Facebook:

Online Risk Reduction Resources:

Online Resources for Association Leaders:

Tennessee Real Estate Commission:

10. No DIGEST Next Week

In observance of the holidays, there will be no TAR DIGEST next week.  The DIGEST will return with the Jan. 3 Edition!