The 1-3-12 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville


CONTENTS
1. Predictions for 2012
2. Homebuyers Go Smaller But More High-End
3. Leadership TAR Applications
4. TAR Forms & Leadership Directory for 2012 Are Online
5. HOT LINE: Commission To Be Paid in Installments?
6. HOT LINE: Can Earnest Money Be Released to Seller?
7. HAPPENINGS – This Week and Next
8. 30-Year Rates Remain Below 4
9. Useful Web Links

To ask a TAR Legal and Ethics Hot Line question, go to: http://tnrealtors.com/main/more_tar_services/legal_and_ethics_hotline/

For other questions about this newsletter, please use the “CONTACT” form at: http://www.tardigest.com/?page_id=4


1. Predictions for 2012

Every news service, including every real estate news service, has been publishing predictions for 2012. Predictions vary from those that are wildly optimistic to foreshadowings of the apocalypse! We all realiza that nobody has a firm handle on what’s going to happen, and uncertainty is probably higher than in many past years.

One set of predictions published on Inman News (“4 predictions about 2012 real estate market”) did get our attention this past week. Written by Tara-Nicholle Nelson, the article is neither overly optimistic nor too pessimistic. She provides what seems to be a realistic assessment of the market and likely factors to influence it, and arrives at four conclusions:

  1. Even more foreclosures
  2. REOs and short sales will become the new normal
  3. So-called “smart cities” will do well
  4. Consumers will get “hopeless”

Don’t be put off by her assertion that consumers will get “hopeless.” By this she means that “people will make these [buying and selling] decisions based on what is or is not sustainable for their lives and their finances, and not based on inflated hopes about what the market will or will not do.” She sees this as a positive outcome of this current economy.

PLEASE keep in mind that real estate is very LOCAL in nature. While some markets continue to be in a deep recession, others are thriving.

To read more from the above article (access may be restricted), go to:
http://www.inman.com/buyers-sellers/columnists/taranichollenelsoninmancom/4-predictions-about-2012-real-estate-market

[SOURCE: Inman News]


2. Homebuyers Go Smaller But More High-End

Home buyers are looking to downsize their living space; but they still want the latest high-end technology, accessories and finishes, according to real estate agents and home builders. The national trend is expected to continue because luxury consumers are able to build at a higher cost per square foot, families are getting smaller, and the population is aging.

“A new housing market is emerging, and even with the recession in the rearview mirror, we expect the popularity of smaller homes to persist,” says Bob Jones, chairman of the National Association of Home Builders.

Jim Leonard of Greensboro Homes says one of the biggest changes he is seeing is the trend of customers seeking a wider range of uses for rooms. “We are not seeing the formal living room and the media room as much as before, because I think people are wanting to use the rooms for more than one purpose, which is one way of having a smaller footprint and saving money,” he says. Often a guest bedroom will double as an office, or there will be one large, open space that has flexible use instead of a formal game room and a separate family room.

Homeowners no longer see the home purchase as an investment to make a profit when they sell, and they plan to stay in their homes longer and get the most out of their living space, adds Leonard.

[SOURCES: San Antonio Express-News; Information, Inc.]


3. Leadership TAR Applications

Applications for the 2012 Class of Leadership TAR are now being taken!

This 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:
http://tnrealtors.com/main/education/leadership_tar/


4. TAR Forms & Leadership Directory for 2012 Are Online

As noted in an earlier email to all members, the 2012 TAR Forms inventory was published at http://tnrealtors.com on January 2, 2012. Both TransactionDesk and Forms on the Fly — updated for 2012 — are now available for your use.

ALSO, the 2012 TAR Leadership Directory is now available online at the same address!


5. HOT LINE: Commission To Be Paid in Installments?

QUESTION: I am working with a seller who cannot pay the commission at closing. The purchase price only covers the payoff. I am the Principal Broker of the company and don’t mind waiting on the commission. The seller has tentatively agreed to pay in monthly installments after closing. If that is ok, then, what verbiage /form/paperwork should I fill out and have her sign?

ANSWER: It is permissible for the seller to pay you a commission in monthly installments after closing. HOWEVER, for your protection, we would recommend amending the listing agreement to state this. You will need to state the terms on which you will now be paid $____  due on _______ date and on the ____ of every month thereafter until paid. That way, if the seller does not comply, you have grounds for an action of breach of contract against them.

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


6. HOT LINE: Can Earnest Money Be Released to Seller?

QUESTION: I have filled out the latest Earnest Money Release in the TAR forms for one of my listings under contract to sale. The buyer has indicated that financial setbacks prohibit him from closing, and the seller is willing to keep his earnest money and release him. The buyer’s agent has called to say her broker will not sign the release; they intend to sue the buyer for their commission. If the buyer, the seller, and the listing broker (who holds the earnest money) sign the release, can the earnest money be disbursed to the seller?

ANSWER: If the buyer’s broker wishes to file suit against the buyer, then it would not be appropriate for them to sign the Earnest Money Disbursement and Release form.

HOWEVER, their signature is not required for distribution.  Pursuant to TREC Rule 1260-2-.09(6): “A broker may properly disburse funds from an escrow or trustee account: (a) upon a reasonable interpretation of the contract which authorizes him to hold such funds; (b) upon securing a written agreement which is signed by all parties having an interest in such funds, and is separate from the contract which authorizes him to hold such funds; (c) at the closing of the transaction; (d) upon the rejection of an offer to purchase, sell, rent, lease, exchange, or option real estate; (e) upon the withdrawal of an offer not yet accepted to purchase, sell, rent, lease, exchange, or option real estate; (f) upon an interpleader action in a court of competent jurisdiction; or (g) upon the order of a court of competent jurisdiction.”

THEREFORE, the holder can distribute as long as the buyer and seller have agreed. The buyer’s agent would not be bound by this agreement unless they have also signed it.

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


7. HAPPENINGS – This Week and Next

Jan. 10: 2011-2012 Commercial Core Course (6 hrs. CE) – GCAR Office, Chattanooga. For more information or to register, call 423-698-8001.

Jan. 15: As noted above, applications for the 2012 Class of Leadership TAR are now being taken, and the application deadline is JANUARY 15. For more information, go to: http://tnrealtors.com/main/education/leadership_tar/

For information on the NEW 2012 GRI Program, go to: http://tnrealtors.com/main/education/gri_in_2012/

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


8. 30-Year Rates Remain Below 4

Average interest on long-term fixed mortgages closed out 2011 near record lows, with the 30-year rate settling at 3.95 percent for the week ended Dec. 29 compared to 3.91 percent a week earlier and 4.86 percent a year ago. The 15-year fixed rate, meanwhile, came in a 3.24 percent — up from 3.21 percent the previous week but down from 4.20 percent during the same week in 2010. Adjustable-rate mortgages also were slightly higher last week but markedly lower than a year earlier. Five-year ARMs bumped up to 2.88 percent from 2.85 percent but held below last year’s average of 3.77 percent; and one-year ARMs edged up to 2.78 percent from 2.77 percent while remaining far from the 3.26 percent rate that prevailed a year ago.

[SOURCES: Freddie Mac; Information, Inc.]


9. Useful Internet Links

To access:

Back Issues of the TAR DIGEST: http://www.tardigest.com/?page_id=20

Tennessee Assn. of REALTORS: http://tnrealtors.com

TAR Education: http://tnrealtors.com/main/education/

Follow TAR on Twitter at: http://twitter.com/tnaor

TAR’s LinkedIn page: http://www.linkedin.com/groups?gid=852077&trk=hb_side_g

TAR’s page on Facebook: http://www.facebook.com/pages/Nashville-TN/Tennessee-Association-of-RealtorsR/15041383689

Online Risk Reduction Resources: http://riskreduction.wikispaces.com/

Online Resources for Association Leaders: http://leadingeffectively.wikispaces.com/

Tennessee Real Estate Commission: http://www.state.tn.us/commerce/boards/trec/