The 8-28-12 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville

Aug. 30: DEADLINE for 2013 TAR Committee Requests!
Aug. 31: DEADLINE for Advance Registrations for TAR Convention!
Sept. 3: Labor Day – TAR Office Closed.
Sept. 12: GRI 405, Mastering Forms & Contracts (8 hrs. CE) – EMTAR Office, Mt. Juliet.
Sept. 13: GRI 402, Staying in Business & Out of Court (8 hrs. CE) – GNAR Office, Nashville.
Sept. 13 – Oct. 17: GRI 405 Plus, From Offer to Contract to Closing (16 hrs. CE) – An E-Class distance-learning course.
Sept. 14: GRI 402, Staying in Business & Out of Court (8 hrs. CE) – RCAR Office, Cleveland.
Sept. 19-21: TAR Annual Convention, Kingsport, TN.

To see a complete calendar of CE courses around the state, go to:

1. HOT LINE: Making Contract Changes for Short Sale?
2. HOT LINE: Termites in a Foreclosure?
3. HOT LINE: Can Buyer’s Agent Be Present at Offer Presentation?

4. Last Week To Register in Advance… !
5. Finding Previous Hot Line Letters
6. Fannie Mae Streamlines Short Sale Process
7. Boundary Disputes – Protecting Your Clients
8. What is Your “Referability”?
9. Rates Inch Up Again
10. To Ask a Hot Line Question
11. No DIGEST Next Week

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

1. HOT LINE: Making Contract Changes for Short Sale?

QUESTION: In doing short sales, I got a call from a lender that we had to change our contract. Can a lender demand that we change our contract? They also want us to have each buyer and seller initial each page of the contract. That isn’t required in the State of Tennessee, is it? Please advise.

ANSWER: A lender in a short sale can (and often does) make approval of a contract contingent upon something being changed in that contract. However, the buyers and sellers do not have to agree to those changes. The only downside is that if they do not agree to the changes, then the bank will likely not approve the contract which will make the sale fall through.

You are correct that the State of Tennessee does not require that each page of a contract be initialed. However, any of the parties (or the bank) or the principal brokers can require that this be done. The important thing to make sure is that ALL pages are initialed.

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

2. HOT LINE: Termites in a Foreclosure?

QUESTION: Under the TAR contract, it states the Seller is to pay for termite treatment if the property is infested. I have a foreclosure property and the bank is refusing to pay for the termite treatment unless it is state ordered. Is it a state law for the seller to pay for this?

ANSWER: There is not a state law which requires the seller to treat termite infestation in an existing home. However, the buyer may have a breach of contract claim if the seller does not treat and they are required to do so under the terms of the agreement. If either party has concerns about their legal rights under the contract, they should speak with their own legal counsel. On a side note, it is highly unlikely that a lender would approve a loan on a property with active termites.

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

3. HOT LINE: Can Buyer’s Agent Be Present at Offer Presentation?

QUESTION: Our company represents a buyer. The buyer would like us to deliver an offer/contract to the seller in person (or at minimum via email or to have a conference call) while the seller is in the presence of their listing agent. Nothing malicious, we simply want to make sure the full offer/contract is being presented. Do we have a right to request that we be present at the presentation of the offer/contract from our client to the seller?

ANSWER: The 2012 MLS Handbook discusses this issue.

Section 9 Rights of Cooperating Brokers in Presentation of Offers (Policy Statement 7.73)
Cooperating participants or their representatives have the right to participate in the presentation of any offer they secure to purchase or lease to the seller or lessor. They do not have the right to be present at any discussion or evaluation of the offer by the seller or lessor and the listing broker. However, if a seller or lessor gives written instructions to a listing broker that cooperating brokers may not be present when offers they procure are presented, cooperating brokers have the right to a copy of those instructions. This policy is not intended to affect listing brokers’ right to control the establishment of appointments for presentation of offers. (Adopted 11/04)

You can ask to be present when your client’s offer is submitted, BUT the seller does not have to agree to this. If they have instructed their agent that they do not want cooperating brokers present, then you may request to ask to see those instructions. Regardless, you would only be permitted to be present for the presentation. Once that had occurred you would have to leave immediately so that the seller could speak to his/her agent in confidence.

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

4. Last Week To Register in Advance…!

This is the LAST WEEK to register in advance for the 2012 TAR Convention in Kingsport, Sept. 19-21!

To see what’s in store for you at the Convention, David Knox – one of our featured speakers – created an engaging video just for TAR members, as a short preview of what members can expect at the Convention!

To watch it online, CLICK HERE.

For more information on the Convention:

5. Finding Previous Hot Line Letters

Periodically we’re asked how to find a Hot Line Question and Answer on a particular topic from a previous TAR DIGEST. It’s really easy to do!

Simply go to and – at the top of the left-hand column – insert a phrase that you’re looking for in a prior DIGEST …such as “septic”, for example, to find any questions that dealt with septic permits. Then click on the word “SEARCH”.

You will then be greeted with a list of those DIGESTS that include that term. You can click on the title of each one that comes up to view the entre DIGEST to see if it’s the one you were looking for!

ALL of the TAR DIGESTS going back to January of 2008 are included in the searchable Archive on this site!

6. Fannie Mae Streamlines Short Sale Process

On this past Tuesday, the Federal Housing Finance Agency said underwater borrowers would have an easier time unloading their homes through short sales under new guidelines. The regulator of Fannie Mae and Freddie Mac said the government-sponsored enterprises would cap the amount second-lien holders would receive after a sale at $6,000, but observers say that amount might not be enough to persuade them to approve short sales. Additionally, the rules — effective Nov. 1 – would reduce the number of documents that must be submitted for short sales if borrowers are struggling with a job loss, job relocation, divorce or other financial hardship.

To read more, CLICK HERE.

[SOURCES: Wall Street Journal; RISMedia]

7. Boundary Disputes – Protecting Your Clients

“Uh, Your Living Room Is on My Property” …That’s the title of an article by Barbara Nichols that appeared in the July issue of REALTOR Magazine.

Many lawsuits arise from boundary disputes, yet many states do not requires surveys to be completed as part of a real estate transaction. E&O insurers, attorneys, and other experts insist that agents should not make statements about a property’s boundary line if they are unfamiliar with city rights-of-way and easement rules, given that buyers filing lawsuits for boundary disputes generally do so against agents. To protect themselves from litigation, agents should have sellers provide the buyer with a copy of the survey; and buyers should be given a written recommendation to have a survey performed if one is not available. Even buyers of raw land should have surveys done so that they know what they can do with the land. The up-front costs of such surveys are much lower than the costs of litigation.

In case you missed the article, or can’t find your magazine, CLICK HERE.

[SOURCE: REALTOR Magazine Online]

8. What is Your “Referability”?

In the National Association of Realtors’ YPN Lounge, Realtor Jason O’Neil posted a useful article this past week: “What is Your Referability?” In it, he underscores the common courtesies, etc., that will make or break you as someone to whom others feel safe referring business! It’s worth a couple of minutes to read; to do so, go HERE.


9. Rates Inch Up Again

Last week, average interest on 30-year fixed mortgages according to Freddie Mac inched up again to 3.66 percent, the fourth week in a row that they’ve risen, but still very low!

And 15-year rates remained low at 2.89 percent!

To see current mortgage rates, go to:

To see THDA rates and programs, go to:

10. To Ask a Hot Line Question…

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

11. No DIGEST Next Week

There will be no TAR DIGEST next week. Happy Labor Day, everyone! The TAR DIGEST will return with the Sept. 11 issue!