The 10-16-12 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville


UPCOMING EVENTS:
Oct. 17 – Chattanooga: Staying in Business & Out of Court (GRI 402, 8 hrs. CE). For more info, CLICK HERE.

Oct. 19 – Memphis: Staying in Business & Out of Court (GRI 402, 8 hrs. CE). For more info, CLICK HERE.

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: Updating the Property Condition Disclosure?
2. HOT LINE: Subagency Still Legal in TN?

IN OTHER NEWS:
3. Rethinking How Listings Are Priced!
4. “Forgiven Debt” Tax Break To Expire Soon
5. Nation’s Shadow Inventory Drops
6. Using Lowe’s (Free!) Program for Realtors
7. Seven Lies That Sabotage Your Success!
8. V.A. Loans Gaining Popularity
9. Rates Edge Higher …to 3.39!
10. To Ask a Hot Line Question
11. Save on Online CE in October!

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: Updating the Property Condition Disclosure?

QUESTION: Since the Tennessee Property Condition Disclosure only has 6 pages, is the seller update form still required to be signed before closing?

ANSWER: There is a requirement under Tenn. Code Ann. 66-5-205 for property owners to report changes in the condition of the property. The statute states:

“If information disclosed in accordance with this party is subsequently rendered or discovered to be inaccurate as a result of any act, occurrence, information received, circumstance or agreement subsequent to the delivery of the required discloses, the inaccuracy resulting therefrom does not constitute a violation of this part, provided, however, that at or before closing, the owner shall be required to disclose any material change in the physical condition of the property or certify to the purchaser at closing that the condition of the property is substantially the same as it was when the disclosure form was provided. If, at the time the disclosures are required to be made, an item of information required to be disclosed is unknown or not available to the owner, the owner may state that the information is unknown or may use an approximation of the information; provided, that the approximation is clearly identified as such, is reasonable, is based on the actual knowledge of the owner and is not used for the purpose of circumventing or evading this part.”

Therefore, if there have been any material changes to the property, they are to be disclosed at or before closing or certify that the condition of the property is substantially the same as it was when the disclosure form was provided. This language is pulled directly from the statute.

In the past, the information in F16a was contained in F16. However, the TAR Forms Committee had received information that lenders were questioning where the last page was since at the time of underwriting, when only the first 6 pages were present. To avoid any delays for explanation purposes, the committee decided to make this two separate forms.

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


2. HOT LINE: Subagency Still Legal in TN?

QUESTION: Is sub-agency still legal in TN? I don’t know of anyone that practices it or offers it but it is still mentioned in many of the state forms. I thought that, with the advent of buyer agency and facilitator status, subagency had been abandoned? It is not offered as an option on the Notice of Consent form so why is that verbiage still on many of the forms? It would seem to me that since you have to have a written bilateral agreement that would legally eliminate subagency as a legal option.

ANSWER: Subagency is still a part of the Broker’s Act. It is referenced multiple times including Tenn. Code Ann. 62-13-102(10), 62-13-401, 62-13-405, and 62-13-407. However, it is not specifically defined.

You are correct; buyer’s agency and facilitator status have largely eliminated the need for subagency, but it is still legal and referenced in the statutes. This is why the language is included in the TAR forms. Many listing agents, however, no longer offer subagency, probably because a court – in spite of language in the agency statute (62-13-407) – might still find either the seller or the listing agent liable for any improper statements or actions by a subagent who was technically “working for” them.

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


3. Rethinking How Listings Are Priced!

Realtor Marianne Guenther Bornhoft posted an interesting article (“It’s Time to Rethink How We Price Our Listings”) on NAR’s YPN Lounge blog that’s worth your time.

In it, she addresses the way a growing number of consumers search for and access information on homes they might wish to purchase — i.e., using their mobile phones and devices — and the impact this has on how a home should be priced to be “findable”. She makes a good point!

For a complete explanation, read the entire posting HERE.

[SOURCE: YPN Lounge]


4. “Forgiven Debt” Tax Break To Expire Soon

A tax break for owners of distressed property, whose mortgages were adjusted downward by lenders, is due to expire at the end of this year:

*** BEGIN QUOTE ***
Before the housing downturn hit, “forgiven debt” on home mortgages could be taxed as income. For instance, if your lender lopped $50,000 off what you owed (a type of loan modification called principal reduction), if you short-sold the property for $50,000 less than your mortgage or if your lender foreclosed on a property worth $50,000 less than you owed, the $50,000 would be treated as income, adding up to a potential big bill for state and federal taxes.
*** END QUOTE ***

To remedy this situation in the midst of an economic downturn, Congress passed the Mortgage Forgiveness Debt Relief Act of 2007 to exempt forgiven home debt from taxes, but that exemption expires on December 31.

To read more, CLICK HERE.

[SOURCE: SF Chronicle]


5. Nation’s Shadow Inventory Drops

Last week, REALTOR Magazine Online reported good news about the housing industry, “Shadow Inventory Drops 10% From Last Year”.

The article begins, “Predictions that the nation’s shadow inventory would rapidly rise have yet to materialize, as the shadow inventory continues to show signs of dropping, according to the latest report reflecting July data from CoreLogic. The nation’s shadow inventory has fallen 10.2 percent in July compared to a year ago.”

As a reminder to everyone, “shadow inventory” refers to the estimated number of financially-distressed homes that have not yet made their way to a MLS, but will do so in the near future.

To read the entire article, CLICK HERE.

[SOURCE: REALTOR Magazine Online]


6. Using Lowe’s (Free!) Program for Realtors

RISMedia posted an article by Nick Caruso this past week about Lowe’s Program for Realtors — a free service available to every NAR member through its REALTOR Benefits Program. The article, “Savings All Around: Incorporating Lowe’s Program for REALTORS into Every Transaction”, outlines several easy ways that NAR members can take advantage of this benefit to enhance their buyer and seller services. And the price can’t be beat!

To read the entire article, CLICK HERE.

[SOURCE: RISMedia]


7. Seven Lies That Sabotage Your Success

In a new, two-part Realty Times article (“Real Estate Marketing: 7 Lies That Sabotage Your Success”), author Dr. Maya Bailey outlines some self-limiting beliefs that stand in the way of achieving success …in real estate or anything else!

“Have you ever suspected that you may be sabotaging your own success?” she asks. “The tricky thing is that you don’t know that it’s happening. You just know that you aren’t succeeding and are getting discouraged over and over again.”

Well worth reading for a little extra motivation!

Part 1: http://realtytimes.com/rtpages/20121009_yoursuccess.htm
Part 2: http://realtytimes.com/rtpages/20121012_success2.htm

[SOURCE: Realty Times]


8. V.A. Loans Gaining Popularity

Mortgages guaranteed by the Department of Veterans Affairs rose 50 percent to almost 540,000 loans in fiscal year 2012, the most since 1994, according to Mike Frueh, the director of loan guarantee service. Current and former military members found V.A. programs more attractive because of the tighter credit standards on conventional financing. Low interest rates were part of the draw, as about 338,000 of the V.A. loans were for the purpose of refinancing, and V.A. loans for purchases were up almost 10 percent over the previous fiscal year.

To read more, CLICK HERE.

[SOURCE: NY Times]


9. Rates Edge Higher …to 3.39!

Last week, average interest on 30-year fixed mortgages according to Freddie Mac rose slightly to 3.39 percent, with an average 0.7 point.

And 15-year rates also moved slightly upward to 2.70 percent, with an average 0.6 point.

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, go to: http://tnrealtors.com/services-support/legal-ethics-hotline/


11. Save on Online CE in October!

Give yourself a TREAT! Enroll in any online CE courses offered by The CE Shop and TAR this month, and take 15% off your order! You have up to 12 months to complete any courses you begin this month.

This includes the online version of the current 2011-2012 Core Course.

Enter TREAT at checkout to receive your discount.

To see available courses, log onto: http://tarnet.theceshop.com/