The 5-29-12 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville


TAR EVENTS – THIS WEEK & NEXT:
June 6: TREEF Conference Call Meeting
June 7: TAR Executive Committee Conference Call Meeting
June 7-8: Leadership TAR Retreat at the TAR Office

HOT LINES IN THIS ISSUE:
1. HOT LINE: Disclosing the Relo Company’s “Cut”?
2. HOT LINE: Disclosure of Multiple Offers?
3. HOT LINE: CE Credit for a Course Taught in a Firm?

IN OTHER NEWS:
4. View of Real Estate Professionals Improving
5. REALTORS Welcome Supreme Court Ruling!
6. National Flood Insurance Update
7. Trends in Generation Y Buyers
8. “Dressing” Houses for Marketing Success
9. Mortgage Rates Fall to Another New Low
10. To Ask a Hot Line Question…

NOTE: If you are reading a hard-copy of this DIGEST, and want to access some of the links cited, simply go to http://www.tardigest.com to access the current issue with “live” links!


1. HOT LINE: Disclosing the Relo Company’s “Cut”?

QUESTION: I have been approached by a relocation company who wants me to work with a client of theirs who works for a certain company. The referral agreement form states that I must not discuss with the client the amount of commission that the referral company is receiving from my commission which the seller is paying. I want to fully disclose my fee and the facts of the commission split. I thought I was liable to disclose that. Your input?

ANSWER: The Tennessee Broker’s Act requires that this amount be disclosed to your client. Pursuant to Tenn. Code Ann. 62-13-312(b)(17), “a licensee can be disciplined for paying or accepting, giving or charging any undisclosed commission, rebate, compensation or profit or expenditures for a principal, or in violation of this chapter.

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


2. HOT LINE: Disclosure of Multiple Offers?

QUESTION: When an offer is submitted to a Listing Agent and the Listing Agent states that multiple offers have been submitted, is the Listing Agent required to disclose that the Listing Agent has also written an offer on the Property?

ANSWER: Standard of Practice 1-15 of the NAR Code of Ethics states that “Realtors, in response to inquiries from buyers or cooperating brokers shall, with the sellers’ approval, disclose the existence of offers on the property. Where disclosure is authorized, Realtors shall also disclose, if asked, whether offers were obtained by the listing licensee, another licensee in the listing firm, or by a cooperating broker.” Since the disclosure of multiple offers was apparently authorized, the listing agent must also disclose, if asked, “whether offers were obtained by the listing licensee, another licensee in the listing firm, or by a cooperating broker.”

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


3. HOT LINE: CE Credit for a Course Taught in a Firm?

QUESTION: Can someone who owns a real estate school come in and teach a class at a private real estate firm?

ANSWER: It will depend upon whether or not this class is being taken (and taught) for CE credit. TREC Rule 1260-5-.06 states:

*** BEGIN QUOTE ***
(1) No course in real estate which is designated to satisfy educational requirements established in T.C.A. 62-13-303 may be:
(a) conducted in a facility which is also utilized for conducting business of a broker or brokerage firm; or
(b) advertised in conjunction with any advertisement for the business of a broker or brokerage firm.
(2) No broker or brokerage firm shall use or cause to be used any facility in which a course in real estate designed to satisfy educational requirements established in T.C.A. 62-13-303 is conducted for the purpose of discussing, inducing, or promoting affiliation with such broker or brokerage firm.
*** END QUOTE ***

Tenn. Code Ann. 62-13-303 contains the educational requirements for licensure and continuing education. THEREFORE, if the instructor’s class is not for CE credit, then this would be permitted. This would NOT be permitted if the intent is to grant CE credit to participants.

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


4. View of Real Estate Professionals Improving

On the good news front:

*** BEGIN QUOTE ***
The most recent Gallup poll on perceptions of professional integrity shows 77 percent of consumers have either an average, high, or very high view of the honesty and integrity of real estate brokers and sales associates. Of that figure, the percentage that constitutes high or very high perceptions of integrity is 20 percent, suggesting the profession continues to have its work cut out for it in changing public perceptions. But the trend is moving in the right direction. Back in 1996, the corresponding figure was only 15 percent.

…As tough as it is for real estate practitioners, the picture is even bleaker for members of Congress, of whom consumers say only 7 percent have high or very high ethics or honesty. Advertising professionals also don’t score well, with consumers saying only 11 percent have high or very high ethics or honesty.
*** END QUOTE ***

To read more, CLICK HERE.

[SOURCE: NAR’s Speaking of Real Estate Blog; Gallup]


5. REALTORS Welcome Supreme Court Ruling!

Resolving a circuit split in the manner urged by NAR, the Court rules that RESPA requires a fee split of a settlement-service fee for a 2607(b) violation.

In a case involving mortgage lending but which has direct application to real estate brokerage, the Supreme Court of the United States has determined that a violation of 2607(b) of the Real Estate Settlement Procedures Act (“RESPA”) only occurs when a split of a settlement-service fee paid by a consumer to a real estate settlement-service provider is split with a third party.

What This Means For REALTOR Firms

Suits alleging a violation of Section 8(b) of RESPA have been brought against real estate brokerages that charge consumers a flat fee in addition to a percentage-based commission. The first such suit, decided in 2009 in the case of Busby v. JRHBW Realty, Inc. d/b/a Realty South, sent shock waves through the brokerage community. In light of this unanimous Supreme Court ruling, however, such fees do not violate Section 8(b) of RESPA unless the broker who is paid the fee splits it and pays a portion of it to a third person outside of the brokerage firm who provides no services in exchange for the fee.

For a more complete explanation, CLICK HERE.

[SOURCE: NAR’s Speaking of Real Estate Blog]


6. Trends in Generation Y Buyers

A new posting by Tracey Velt on REAL Trends provides a good snapshot of what is happening with Generation Y, also called “Millenials” or “Echo Boomers”, those born between the years 1980 and 2000.

As noted at the recent NAR Midyear Conference, the housing market for the next couple of decades will likely depend largely for its success on this group of prospective homeowners!

Included in Tracey’s posting is not only information about Generation Y’s probable buying desires as prospective homebuyers but also a look at brokers’ recruiting strategies to reach this demographic for new agents.

To learn more, go to: http://realtrends.com/blog/trends-in-gen-y-buyers

[SOURCE: REAL Trends]


7. National Flood Insurance Update

On May 24, 2012, the US Senate approved a 60-day extension of the National Flood Insurance Program under an agreement between Senators Reid and Vitter.

Because the Senate amended H.R. 5470 to include 60 rather than 30 days, the House will again have to pass the extension bill, which is expected this week. Currently, program authority is next set to expire on May 31, 2012.

Under the terms of this agreement, in early June, the Senate will also bring up and vote on the 5-year Flood Insurance Reform Act. Several hurdles remain before a bill can become law, but these are positive steps toward the long-term solution NAR has been advocating most recently during its mid-year Congressional Meetings and Rally.

NAR will continue to work to ensure that the program does not lapse and that a longer term solution becomes reality.

[SOURCE: NAR]


8. “Dressing” Houses for Marketing Success

TAR’s online education partner, The CE Shop, has posted a FREE 18-minute video you can watch online to learn how you can “Dress Your House for Success”. This video is part of The CE Shop’s ongoing RealLife365 series.

You could pick up a useful tip or two! To watch it, go to: http://tarnet.theceshop.com/reallife365/

[SOURCE: The CE Shop]


9. Mortgage Rates Fall to Another New Low

Last week, Average interest on 30-year fixed mortgages fell to ANOTHER new low, 3.78 percent, the lowest level since long-term mortgages began in the 1950s, according to Freddie Mac!

To see current mortgage rates, go to: http://www.mortgagenewsdaily.com/mortgage_rates/

To see THDA rates and programs, go to: http://tn-tennesseehda.civicplus.com/index.aspx?NID=8


10. To Ask a Hot Line Question…

To ask a TAR Legal and Ethics Hot Line question, CLICK HERE.