The 10-2-12 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville

Oct. 3: GRI 403, Working More Effectively With Buyers (8 hrs. CE) – TAR Office, Nashville.
Oct. 4: GRI 409, Short Sale Techniques (8 hrs. CE) – TAR Office, Nashville. This is a new course and a GRI Elective!
Oct. 11 – Nov. 14: GRI 412: Financing the Successful Transaction (16 hrs. CE) – An E-Class distance-learning course and GRI Elective.

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

1. HOT LINE: Must Bank Accept Full-Price Offer?
2. HOT LINE: Electronic Signatures on Contracts?
3. HOT LINE: Buyer To Verify Square Footage?

4. Thought Leaders Name Biggest Challenges
5. Challenges in Getting a Mortgage Persist
6. Economically in Recovery, Mentally in Recession
7. If Your Listing Isn’t Selling…
8. Three Months to Get Ethical!
9. Instructor Training Rescheduled
10. Rates at NEW Record Low: 3.40%!
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 to access the current issue with “live” links!

1. HOT LINE: Must Bank Accept Full-Price Offer?

QUESTION: I have a client that made an offer listed in the MLS. It is a short sale. We made almost a full-price offer, but the listing agent has stated the lender is unwilling to accept this because they have too much money in the property. If we make a full-price offer, as it is listed in the MLS, it is my understanding that the lender cannot reject this offer. Is that correct?

ANSWER: The answer is probably no. Often, the bank will not advise the seller as to what they will accept on a short sale. Therefore, the seller is trying to determine a list price which the bank will accept, but is aggressive enough that they can beat the foreclosure. This sometimes leads to a list price that, even if met, the bank will not approve. This does not necessarily mean that either the seller or the agent has done anything wrong. It is only an issue if that home is priced so low that it is completely illogical for the bank to accept. At this point, your buyer can make another offer (full price or above) and wait to see if the lender will approve it.

Unfortunately, in short sales, the lender is in control. This often means a long process in which the buyer is not sure of anything until the last minute. It is not for the faint of heart. However, buyers often get very good deals on these types of properties, and this is the trade-off.

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

2. HOT LINE: Electronic Signatures on Contracts?

QUESTION: As we move more and more towards electronic everything, just how legal are electronic signatures for contracts? Should TAR address this in the contract? TAR Contracts have a place under notices which all parties agree delivery by: person, overnight, fax, mail, and email. To me a signed scanned document that is sent via email is still signed with that person’s signature. Is there an electronic signature application that is better for legal documents?

ANSWER: TAR only endorses Authentisign which is available through Transaction Desk, as part of their all-inclusive upgrade, available through 12-31-12. Please see the following link for more information:

Other systems are available as long as they meet all the requirements under federal and state law.

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

3. HOT LINE: Buyer To Verify Square Footage?

QUESTION: It is my understanding that the buyer is responsible for verifying the square footage of a property through an appraiser. Is this correct?

ANSWER: Generally speaking, yes. If a TAR Purchase and Sale Agreement is used, there is language within it which puts the buyer on notice that if they have concerns about the square footage, they should get independent expert advice:

“Lines 286-297:
10. Disclaimer. It is understood and agreed that the real estate firms and real estate licensee(s) representing or assisting Seller or Buyer and their brokers (collectively referred to as “Brokers”) are not parties to this Agreement and do not have or assume liability for the performance or nonperformance of Seller or Buyer. Buyer and Seller agree that Brokers shall not be responsible for any of the following, including but not limited to those matters which could have been revealed through a survey, flood certification, title search or inspection of Property; for the condition of Property, any portion thereof, or any item therein; for the necessity or cost of any repairs to Property; for hazardous or toxic materials; for the tax or legal consequences of this transaction; for the availability, capability, and/or cost of utility, sewer, septic, or community amenities; for applicable boundaries of school districts or other school information; for the appraised or future value of Property; square footage of Property; any condition(s) existing off Property which may affect Property; for the terms, conditions, and availability of financing; and/or for the uses and zoning of Property whether permitted or proposed. Buyer and Seller acknowledge that Brokers are not experts with respect to the above matters and that, if any of these matters or any other matters are of concern to them, they should seek independent expert advice relative thereto.”

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

4. Thought Leaders Name Biggest Challenges

A few weeks ago, we reported on the predictions for the future by industry leaders, captured by the Imprev Thought Leader Survey of the 850 top real estate brokerage executives (nationally). This week, we look at the top challenges they see for their businesses.

More than 90 percent of respondents consider attracting top talent to be their most crucial business concern. When asked about their firm’s single biggest challenge, 42 percent cited recruiting, 19 percent profitability, and 14 percent competition.

Imprev CEO Renwick Congdon says there are concerns about a “knowledge walkout” in the real estate industry as it continues to age. The National Association of Realtors reports a jump in the median age of members to 56 last year from 51 in 2006. When asked what makes agents join their firm, 78 percent of executives pointed to brand and reputation, 75 percent cited better technology, another 75 percent said culture fit, and 73.4 percent said training and education. As for why agents leave their firms, 60 percent said they were seeking better compensation, 30.8 percent cited a better culture fit, 12.3 percent said administration and support services, and 10.8 percent said more leads and referrals.

To read more, CLICK HERE.


5. Challenges in Getting a Mortgage Persist

Despite historically low mortgage interest and stellar payment performance by borrowers lately, lenders are tightening underwriting criteria even more rather than relaxing standards. Industry data show that the average FICO score for new loans is up, as are down payments, and that even would-be borrowers with solid credit backgrounds are still being turned away. Fannie Mae chief economist Doug Duncan says lending standards could loosen once fears of mortgage buybacks diminish and new mortgage rules are finally issued by the federal government.

To read more, CLICK HERE.

[SOURCE: LA Times]

6. Economically in Recovery, Mentally in Recession

An article posted online in the CoStar Group’s newsletter this past week (“MAJOR DILEMMA: Economically We’re in Recovery; Mentally We’re Stuck in Recession”) was written for the commercial real estate industry but might apply to residential real estate in some areas as well:

Despite improving job numbers, rising CRE and housing prices, declining vacancies and stabilizing rental rates, not to mention a new round of fed stimulus that will pump $40 billion a month into the mortgage markets, the prevailing sentiment in the commercial real estate industry still seems to be one of doom and gloom.

…”We have noticed the trend as well and concur that a negative, or rather extremely conservative, mindset is prevalent with the investors in the market,” said Steve Timmel, senior vice president of Colliers International in Cincinnati. “Many investors are analyzing assets based on the ‘what-could-go-wrong’ view versus spending time focusing on ‘what-could-go-right’ and this has had an impact on pricing and deal velocity.”
*** END QUOTE ***

To read the article in its entirety, CLICK HERE.

[SOURCE: CoStar Group]

7. If Your Listing Isn’t Selling…

An article on Realty Times last week by Jennifer Allan (“If Your Listing Isn’t Selling”) offers some counter-arguments to the typical strategy of simply reducing the asking price of the listing. To read the three reasons she gives in rebuttal to that approach, CLICK HERE.

[SOURCE: Realty Times]

8. Three Months to Get Ethical!

Well, we’re actually not serious with that headline, since we expect all of our members to be ethical all of the time!

BUT …only three months DO remain until all TAR members must have completed a 3-hour local-association-approved course in the Code of Ethics within the past four years!

As we keep telling people, this has ABSOLUTELY NOTHING to do with your license, or CE requirements, or the Core Course!

And NOBODY is grandfathered or exempt from this Ethics Course requirement!

The requirement that every Realtor in the country take a 3-hour course in the Code of Ethics at least once every four years is a NATIONAL requirement that NAR established some time ago, to ensure that every Realtor in the U.S. remains somewhat up-to-date on their responsibilities under the Realtor Code of Ethics. The current 4-year cycle for complying with this mandate began on January 1, 2009, and ends on December 31, 2012!

To see if you still need to take a course between now and the end of the year, please check with your local association of Realtors. By the way, it’s NOT necessary to take a CE-accredited course in the Code; as long as your local association approves the course as meeting NAR’s requirements then it can count.

9. Instructor Training Rescheduled!

Our two-day instructor-training program – The Learning-Centered Instructor – has been scheduled and will now be held on Nov. 1-2 at the TAR Office in Nashville.

This will be our only offering of this workshop until March of 2013, so – if you’re interested in polishing your skills as a presenter or instructor – this is your best opportunity for a while! It’s also approved for 16 hours of CE!

To learn more, go to:

To register, CLICK HERE.

10. Rates at NEW Record Low: 3.40%!

Last week, average interest on 30-year fixed mortgages according to Freddie Mac dropped to 3.40 percent, with an average 0.6 point, setting a new all-time low!

And 15-year rates move downward to 2.73 percent, with an average 0.6 point, ALSO setting a new record low!

To see current mortgage rates, go to:

To see THDA rates and programs, go to:

11. To Ask a Hot Line Question…

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