The 9-18-12 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville


UPCOMING TAR COURSES & EVENTS:
Sept. 19-21: TAR Annual Convention, Kingsport, TN! [You can still register on-site to attend!]
Sept. 27 – Oct. 31: GRI 406 Plus, Systems for Success (16 hrs. CE) – An E-Class distance-learning GRI course.
Oct. 3: GRI 403, Working More Effectively With Buyers (8 hrs. CE) – TAR Office, Nashville.

To see a complete calendar of CE courses around the state, go to: http://tnrealtors.com/education/realtor-courses/

HOT LINES IN THIS ISSUE:
1. HOT LINE: Gift Card for Updates at Closing?
2. HOT LINE: Possible RESPA Violation?
3. HOT LINE: Closing Cost Assistance to Certain Buyers?

IN OTHER NEWS:
4. Gradual Housing Market Rebound Predicted
5. Foreclosure Prevention Assistance Available
6. TREC Amends Policy on Lapsed E&O
7. Eight Powerful Real Estate Apps!
8. Free Risk Reduction Resources for TN Realtors
9. Instructor Training Available
10. Rates Remain VERY Low
11. 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: Gift Card for Updates at Closing?

QUESTION: Can a seller provide a gift card to a buyer at closing instead of an allowance for updates?

ANSWER: This would be up to the lender. Generally, lenders do not permit buyers to receive cash in lieu of repairs. They may be more agreeable to a gift card that is not redeemable for cash, but this would be completely up to the lender.

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


2. HOT LINE: Possible RESPA Violation?

QUESTION: I have an agent who wants to have an open house. A title company and lender will be present at the open house as well. Is it okay for the title company and/or lender to provide refreshments for the open house?

ANSWER: If this is a residential property, this would likely be considered a violation of RESPA. It is likely this would be seen as a thing of value given for referral of business. However, if this is a commercial property, then RESPA would not apply. Even in that case, however, we would recommend that you fully disclose who is providing the refreshments.

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


3. HOT LINE: Closing Cost Assistance to Certain Buyers?

QUESTION: Is it legal or ethical for an agent to advertise in his/her listings that closing cost assistance will be provided for HIS/HER buyers, implying that if you use the listing agent you could receive closing costs but otherwise would not?

ANSWER: If the agent is offering to pay closing costs, there is a larger issue. TREC does not permit agents to pay closing costs. The Legislature recently passed a law that states: “A real estate licensee shall not give or pay cash rebates, cash gifts or cash prizes in conjunction with any real estate transaction. As part of the Tennessee Real Estate Commission’s general rulemaking authority the commission may regulate the practices of real estate licensees in regard to gifts, prizes or rebates that are not otherwise prohibited by law.” Tenn. Code Ann. 2-13-302(b).

TREC has interpreted this law as prohibiting agents from paying closing costs for their clients. Therefore, if these items are closing costs which appear on the HUD, then you cannot pay them. If they are not, then you must pay the vendor directly. Furthermore, you should make sure that the lender approves this as well.

Otherwise, you can offer to reduce your commission, but you cannot pay the closing costs. However, this does not mean that the overall commission would be reduced. You would have to have both the seller’s agent and the seller agree to reduce the commission and apply this to the closing costs (this is because the seller is under contract to pay a certain percentage to his agent regardless of whether there is an agent working with the buyer). In addition to this, the lender may likely have a problem with a third party paying a portion of the closing costs.

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


4. Gradual Housing Market Rebound Predicted

Fannie Mae’s August 2012 National Housing Survey reveals that respondents expect home prices to increase 1.6 percent in the next year, largely consistent with the previous month, and 40 percent of those surveyed expect mortgage rates to rise over the next 12 months, up 4 percentage points from July. Moreover, 18 percent say it is a good time to sell, the highest level since the inception of the survey, and the percentage of respondents who say it is a good time to buy held steady at 73 percent. “Consumer attitudes toward the housing market remain modestly positive, despite signs of increased concern over the direction of the economy,” said Doug Duncan, senior vice president and chief economist of Fannie Mae.

[SOURCE: National Mortgage Professional]


5. Foreclosure Prevention Assistance Available

There are funds available for households fighting foreclosure. The Tennessee Housing Development Agency is administering funds that are paid to the servicer directly if homeowners qualify. Qualification centers around a drop in income since January 2008. The general guideline is being unemployed or underemployed (a 30% drop in income). The preliminary application is found at http://www.KeepMyTNHome.org.

Applicants are connected to a foreclosure prevention counselor that reviews all possibilities for the homeowner, including a 0%, five-year, forgivable loan. There are mortgage balance limitations for the funding, but counseling is free to all homeowners. Please share this information broadly.

THDA is one of our longstanding friends in the real estate industry and a valued sponsor of the 2012 TAR Annual Convention this week!

[SOURCE: THDA]


6. TREC Amends Policy on Lapsed E&O

To access the amended policy (it’s a one-page PDF) use the following link:
http://www.tn.gov/commerce/boards/trec/documents/Policy2012-CPS-008PolicyonLapsedEandOInsurance.pdf

[SOURCE: TREC]


7. Eight Powerful Real Estate Apps!

This past week, Realtor Subhi Gharbieh posted a useful article at NAR’s YPN Lounge: “8 Incredibly Powerful Real Estate Apps”.

After acknowledging that “it is virtually impossible to use every single real estate-related mobile application in our business today,” Subhi profiles eight of his favorites …ones that he uses daily, with links to each of them. And most of them are FREE!

To access his post, CLICK HERE.

[SOURCE: NAR’s YPN Lounge]


8. Free Risk Reduction Resources for TN Realtors

A variety of free risk reduction resources — on TN License Law, Agency, Ethics and Professional Standards, Fair Housing, and RESPA — are available at:
http://riskreduction.wikispaces.com/

This site was created by TREEF as a service to Tennessee Realtors. If there is something you would like to see that’s not included here, please let us know. [By the way, you do NOT need to sign in or become a member of this website to access and download any of the resources there!]

NOTE: In the “Agency” section of this website, you will find two downloadable and print-ready brochures that you can give to your clients:

Consumer Guide to Tennessee’s Agency Law (for Sellers)
Consumer Guide to Tennessee’s Agency Law (for Buyers)


9. Instructor Training Available

On October 17-18 at the TAR Office in Nashville, we’re offering our popular two-day instructor-training program – The Learning-Centered Instructor!

Anyone may attend our instructor-training workshops. They are recommended for anyone handling in-house training for their company, teaching Local Association Orientation, teaching Continuing Education classes for their Local Association, OR teaching prelicensing classes. They have been used successfully by the Tennessee, Arizona, Missouri and other State Associations to train real estate instructors for greater impact in the classroom! This workshop also offers participants 16 hours of CE credit.

To learn more: http://tnrealtors.com/education/instructor-training/

To register online, CLICK HERE.


10. Rates Remain VERY Low

Last week, average interest on 30-year fixed mortgages according to Freddie Mac remained at 3.55 percent, the same as a week earlier!

And 15-year rates inched downward to 2.85 percent!

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


11. To Ask a Hot Line Question…

To ask a TAR Legal and Ethics Hot Line question, go to: http://tnrealtors.com/services-support/legal-ethics-hotline/