The 2-7-12 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville


CONTENTS
1. Higher Minimum Down Payments Would Depress Sales
2. 2012 Class of Leadership TAR Announced!
3. Homeownership Rate Falls
4. Fraud Prevention & Distressed Properties
5. HOT LINE: Seller’s Rejection of an Offer Not Confirmed?
6. HOT LINE: To Whom Does the Carry-Over Clause Apply?
7. HAPPENINGS – This Week and Next
8. Register for TAR Spring Conference!
9. Rates Hit New Record Low!
10. 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. Higher Minimum Down Payments Would Depress Sales

Higher minimum down-payment requirements would put a serious hurting on the U.S. homebuying market, according to new research from the Center for Responsible Lending.

The study, “Balancing Risk and Access: Underwriting Standards for Qualified Residential Mortgages,” acknowledges that demanding 20 percent down from buyers would curtail defaults but concludes that doing so would constitute “a big mistake for business and consumers.” CRL figures that raising the threshold for down payments to 20 percent would disqualify 60 percent of the buyer pool in general and as many as 75 percent of African-American and Latino borrowers. Lowering the bar down to a minimum of 10 percent down, the report finds, still would hamstring a good number of buyers. Moreover, it adds, many of the borrowers weeded out through higher down payment requirements would be homeowners very unlikely to default on their loans.

“We find that imposing 80 percent loan-to-value (LTV) ratio requirements on qualified mortgages (QM) would exclude 10 otherwise creditworthy borrowers to prevent one foreclosure,” the study’s authors write.

This study was reported in a recent TIME Magazine article (“Study: If Would-Be Home Buyers Have to Put 20% Down, 60% of Them Ain’t Buying”) available here: http://moneyland.time.com/2012/02/02/study-if-20-down-is-required-60-of-borrowers-would-be-pushed-out-of-housing-market/

[SOURCES: Time Magazine; Information, Inc.]


2. 2012 Class of Leadership TAR Announced!

Fifteen REALTORS from across Tennessee were selected to be members of the 2012 Class of Leadership TAR. In April, they will begin several months of study and work together, as they prepare themselves for greater personal and professional leadership. If you know any of the following, PLEASE extend your congratulations to them!

Dawn Bischoff (Gatlinburg)
Ludora Cooper (Memphis)
Brian Foster (Paris)
Mike Groves (Clarksville)
Ron Guy (Memphis)
Rob Hatchett (Chattanooga)
Regina Hubbard (Memphis)
Cindy Lockhart (Nashville)
Amanda Looney (Kingsport)
Brent Maybank (Hendersonville)
Pamela Pope (Johnson City)
Patti Rhea (Chattanooga)
Rae Ann Stimpson (Cordova)
Linda Vaughn (Hendersonville)
Randy Worcester (Clarksville)

And we congratulate them as well!


3. Homeownership Rate Falls

The U.S. homeownership rate declined to 66 percent in the last three months of 2011, continuing a seven-year drop from its 2004 fourth-quarter peak of 69.2 percent, reports the Census Bureau. Keenly aware of the risk of home price depreciation, some consumers simply are turned off by homeownership; and, for those still interested, the National Association of Realtors notes that many purchase contracts appear to be collapsing because would-be buyers are facing roadblocks to mortgage financing.

To read more, go to: http://www.usatoday.com/money/economy/housing/story/2012-01-31/home-prices-ownership/52907436/1

[SOURCE: USA Today]


4. Fraud Prevention & Distressed Properties

A good article (“Watching Out For Fraud”) on fraud prevention — vital when dealing in a market featuring a lot of distressed properties — appeared recently on REALTOR Magazine Online. A few helpful tips from this article:

  • When working with another real estate practitioner for the first time, check the person’s license status with your state’s department of real estate. Never deal with unlicensed agents or unlicensed brokerage companies, and be wary if you encounter agents who are unwilling to meet in person.
  • Be sure to pay extra attention if one of the real estate practitioners is a party to the deal, is using a shell company, or mentions “on the side,” “outside of escrow” or “after closing.”
  • Make sure early in the real estate transaction that all the required state and federal disclosures have been made, and be suspicious if other parties claim to represent federal or state agencies or programs.

To read the entire article, and we recommend doing so, go to: http://realtormag.realtor.org/law-and-ethics/law/article/watching-out-for-fraud

[SOURCE: REALTOR Magazine online]


5. HOT LINE: Seller’s Rejection of an Offer Not Confirmed?

QUESTION: There was a multiple offer situation on a property. I never got a rejected letter from the seller. I was only told that another buyer’s offer was accepted. Should I have gotten something from the seller?

ANSWER: Pursuant to TREC Rule 1260-2-.08:

“A broker or affiliate broker promptly shall tender every written offer to purchase or sell obtained on a property until a contract is signed by all parties. Upon obtaining a proper acceptance of an offer to purchase, or any counteroffer, a broker or affiliate broker promptly shall deliver true executed copies of same, signed by the seller, to both the purchaser and the seller.  Brokers and affiliate brokers shall make certain that all of the terms and conditions of the real estate transaction are included in the contract to purchase. In the event an offer is rejected, the broker or affiliate broker shall request the seller to note the rejection on the offer and return the same to the offeror or the offeror’s agent.

Note that last sentence. Obviously, an agent cannot force their client/customer to note a rejection, but they need to ask that this be done. If an agent has a client/customer who will not do this, we recommend that they document that they have requested the rejection, but the client refused. This documentation can then be relayed to the other side. You can ask the seller’s agent for documentation. However, if the seller refused to sign, then they obviously cannot produce it.

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


6. HOT LINE: To Whom Does the Carry-Over Clause Apply?

QUESTION: Regarding the “carry over clause” on the listing agreement, does the agent have to supply a list of names to the seller at the end of the listing period in order to enforce the carry-over clause statement?

ANSWER: Not necessarily. The listing agreement states that this will apply to any person to whom the property was introduced (directly or indirectly) by the listing company. This would include those to whom the agent would not necessarily have been in contact – as long as it was a result of the actions of the agent (think advertising).

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


7. HAPPENINGS – This Week and Next

Feb. 7: 2011-2012 Residential Core Course (6 hrs. CE) – CAR Office, Clarksville. For more information or to register, call: 931-552-3567

Feb. 9: 2011-2012 Residential Core Course (6 hrs. CE) – EMTAR Office, Mt. Juliet. For more information or to register, go to: http://www.emtar.com/2012educationSchedule.htm

Feb. 9: REBAC’s Short Sales & Foreclosures Course (8 hrs. CE) – MAAR Office, Memphis. For more information or to register, go to: http://www.maar.org/maarcalendar

Feb. 10: REBAC’s Broker’s Price Opinion (BPO) Course (6 hrs. CE) – GNAR Office, Nashville. For more information or to register, go to: http://www.gnar.org/educationResources

Feb. 13: 2011-2012 Residential Core Course (6 hrs. CE) – MAAR Office, Memphis. For more information or to register, go to: http://www.maar.org/maarcalendar

Feb. 13: TransactionDesk Basic Course (3 hrs. CE) – MAAR Office, Memphis. For more information or to register, go to: http://www.maar.org/maarcalendar

Feb. 14: 2011-2012 Residential Core Course (6 hrs. CE) – GNAR Office, Nashville. For more information or to register, go to: http://www.gnar.org/educationResources

Feb. 16 – March 21: GRI 403-404, Smart Marketing (16 hrs. CE) – An E-Class distance-learning course. For more information or to register, go to: https://www.123signup.com/event?id=chvvm

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

NOTE: E-Class GRI courses are NOT webinars and they are NOT “online” courses in the way that most people think of online courses. How do E-Class courses work? Go to: http://tnrealtors.com/main/education/e-class_gri_info/

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


8. Register for TAR Spring Conference!

Registration is now open for the 2012 TAR Spring Conference, at the Cool Springs Marriott just south of Nashville. This is traditionally our largest meeting of the year, and the 2012 Spring Conference offers a great education program! TEN hours of education in all!

The early-bird registration fee (for TAR members) remains a low $75! So reserve your spot NOW! For more information on the TEN hours of education offered or to register, go to: http://tnrealtors.com/main/meetings/spring_conference/


9. Rates Hit New Record Low!

Mortgage rates fell to new lows this past week, Freddie Mac reports. Average interest on 30-year fixed loans declined to 3.87 percent, down from a previous record of 3.88 percent two weeks ago, and the rate on 15-year fixed mortgages dropped to a record low of 3.14 percent. Mortgage rates tend to track the yield on the 10-year Treasury note, which slipped below 1.9 percent this past week.

[SOURCES: Freddie Mac; Information, Inc.]


10. 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/