The 11-13-12 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville


UPCOMING TAR EVENTS:
Nov. 21 – Knoxville: Tips, Tools, & Technologies for Your Business (GRI 406, 8 hrs. CE). For more info, CLICK HERE.

Nov. 29-30 – Nashville: The Learning-Centered Instructor Workshop (16 hrs. CE) – a two day instructor-development workshop at the TAR Office, Nashville. For more info, CLICK HERE.

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

To access online CE courses, go to: http://tnrealtors.com/education/online-courses/

HOT LINES IN THIS ISSUE:
1. HOT LINE: Buyer’s Agent Competing With His Client?
2. HOT LINE: Increasing Buyer Agent’s Commission?

IN OTHER NEWS:
3. NAR Expects Housing Rebound Through 2014
4. November Is National Designation Awareness Month!
5. The Attraction of “NORCs”…
6. The Seven Second MLS Listing Rule
7. A New and Improved TAR DIGEST!
8. Rates Still Near Record Low: 3.40
9. 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: Buyer’s Agent Competing With His Client?

QUESTION: Is it unethical for an agent to represent a buyer on a property and also bring an offer himself on the same property, representing himself? Of course his offer is higher than his client’s and is produced only after he brings me the one from his client. I think his client is unaware that the agent is interested in the property.

ANSWER: This is indeed problematic. It is definitely a conflict of interest for the agent who is working with the potential buyer. Pursuant to Article 1 of the NAR Code of Ethics:

*** BEGIN QUOTE ***
When representing a buyer, seller, landlord, tenant, or other client as an agent, Realtors pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve the Realtors of their obligations to treat all parties honestly. When serving a buyer, seller, landlord, tenant or other party in a non-agency capacity, Realtors remain obligated to treat all parties honestly.
*** END QUOTE ***

Furthermore, the Broker’s Act states that an agent can be disciplined for “any conduct, whether of the same or different character from that hereinbefore specified, which constitutes improper, fraudulent or dishonest dealing.” Tenn. Code Ann. 62-13-312(b)(20).

It also states that agents have a duty to all parties to “diligently exercise reasonable skill and care in providing services to all parties to the transaction” and to “provide services to each party to the transaction with honesty and good faith”. Tenn. Code Ann. 62-13-403(1) and (4).

If the agent has an agency relationship with the buyer he is further obligated to “be loyal to the interests of the client. A licensee must place the interests of the client before all others in negotiation of a transaction and in other activities, except where such loyalty duty would violate licensee’s duties to a customer under 62-13-402 or a licensee’s duties to another client in a dual agency.” Tenn. Code Ann. 62-13-404(2).

If you feel that the agent has violated the Code of Ethics, you may file a complaint with the local board. If you feel the agent has violated the Broker’s Act, you may file a complaint with TREC.

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


2. HOT LINE: Increasing Buyer Agent’s Commission?

QUESTION: What is the proper way for a buyer’s agent to ask a seller’s agent for additional cooperative compensation on property sales when they are members of the same MLS?

ANSWER: Cooperative commissions should be established PRIOR TO an offer being submitted. The NAR Code of Ethics has several Standards of Practice that address this situation:

*** BEGIN QUOTE ***
Standard of Practice 3-1
Realtors, acting as exclusive agents or brokers of sellers/landlords, establish the terms and conditions of offers to cooperate. Unless expressly indicated in offers to cooperate, cooperating brokers may not assume that the offer of cooperating includes an offer of compensation. Terms of compensation, if any, shall be ascertained by cooperating brokers before beginning efforts to accept the offer of cooperation.

Standard of Practice 3-2
To be effective, any change in compensation offered for cooperative services must be communicated to the other Realtor prior to the time that Realtor submits an offer to purchase/lease the property.

Standard of Practice 3-3
Standard of Practice 3-2 does not preclude the listing broker and cooperating broker from entering into an agreement to change cooperative compensation.

Standard of Practice 16-16 states:
Realtors, acting as subagents or buyer/tenant representatives or brokers, shall not use the terms of an offer to purchase/lease to attempt to modify the listing broker’s offer of compensation to subagents or buyer/tenant representatives or brokers nor make the submission of an executed offer to purchase/lease contingent on the listing broker’s agreement to modify the offer of compensation.
*** END QUOTE ***

Under NO circumstances should a deal be held hostage due to a commission dispute between agents. Standard of Practice 3-2 clearly speaks to this situation. Any change in compensation must be communicated before an offer is submitted.

You can use the Compensation Agreement Between Listing and Seller Broker form (Form F56) to confirm this. We would also recommend a phone call to give the listing agent a head’s up (the old adage of more flies with sugar, etc). Of course, the listing agent is not required to provide more compensation than what is offered in the MLS.

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


3. NAR Expects Housing Rebound Through 2014

The National Association of Realtors expects the housing market to rebound through 2014 as long as mortgage credit does not tighten further and Congress avoids a “fiscal cliff.”

“Existing-home sales, new-home sales and housing starts are all recording notable gains this year in contrast with suppressed activity in the previous four years, and all of the major home price measures are showing sustained increases,” notes NAR chief economist Lawrence Yun. “Disruption from Sandy likely will be temporary, notably in New Jersey and New York, but the market is likely to pick up speed within a few months with the need to build new homes in damaged areas.”

Mortgage interest is expected to rise and average 4 percent next year and 4.6 percent in 2014. Yun expects the national median existing-home price to rise 6 percent to $176,100 for all of 2012 and increase another 5.1 percent in 2013 to $185,200, with comparable gains in 2014. NAR projects existing-home sales to rise 9 percent this year to 4.64 million, increase 8.7 percent in 2013 to 5.05 million, and jump to about 5.3 million in 2014; and it forecasts new-home sales to reach 368,000 this year and 575,000 next year. Housing starts should rise to 776,000 this year and reach 1.13 million in 2013. The market share for distressed sales is projected to fall to 8 percent in 2014 from about 25 percent this year.

[SOURCES: NAR; National Mortgage Professional]


4. November Is National Designation Awareness Month!

Did you know that Realtors who earn a professional designation or certification have an average gross income that’s $27,000 higher than Realtors who have none (2012 NAR Member Profile)? Gain the necessary expertise to navigate the current marketplace by earning an official NAR designation or certification.

The most accessible designation in Tennessee is the GRI – Graduate, REALTOR Institute designation – available to members by either classroom courses or distance-learning courses, or a combination of the two!

  • GRI is the only nationally-recognized Realtor designation that includes training customized to the laws and forms of each state where it’s offered!
  • GRI is also the ONLY national designation that you will NEVER have to pay an annual fee or dues to keep!
  • And, the GRI courses are updated annually in Tennessee to make sure that the training our members receive is current!

Our 2013 schedule of GRI courses – both classroom and E-Class – will be posted soon, so look for it …and plan to earn your GRI in 2013!


5. The Attraction of “NORCs”…

A new article on Inman News by Teresa Boardman explores an opportunity many Realtors may be overlooking!

While many real estate professionals seem to be focused on short sales and first-time home buyers, it would be a mistake to ignore the huge population of Baby Boomers – many of whom would like to age in place. This niche market of potential buyers rejects the idea of retiring and becoming a snowbird; they would rather downsize from a big suburban dwelling into something more manageable. Many of them also shun the idea of age-restricted living, preferring instead to occupy “naturally occurring retirement communities,” or NORCs. These are condominium buildings or neighborhoods where a significant chunk of the population is made up of older residents who intend to stay put until they are forced into an assisted-living situation or until they pass away. However, they need knowledgeable real estate agents who can help them locate NORCs or who specialize in multigenerational housing – another option for seniors – as well as who can guide the surviving family in its real estate options and decisions once their loved one has passed. At a minimum, all agents should be aware of the migration patterns and demographics of their own community.

To read more, CLICK HERE.

[SOURCE: Inman News]


6. The Seven Second MLS Listing Rule

The 97 percent of home buyers who search for properties online spend an average of only seven seconds previewing a listing, bypassing it if it fails to grab their attention, says NAR. This means agents need to craft their listings with these seven seconds in mind.

They must paint a picture with words, merging data with vivid descriptions without being too flowery or ambiguous. They should use words found to have a big impact, such as beautiful, fresh, bright, and light. Incorporating the words landscaping and turnkey, meanwhile, will attract the attention of buyers looking for a home in move-in condition with plenty of curb appeal. They might even want to put a positive spin on some problem spots, such as emphasizing the “beautiful fountains” that help muffle street noise. After creating an eye-catching description, they must focus on the photos, taking care that the rooms are clean and free of clutter.

To read more: http://realtybiznews.com/the-seven-second-mls-listing-rule/98716625/

[SOURCE: RealtyBizNews]


7. A New and Improved TAR DIGEST!

Beginning with next week’s issue, we will be introducing some changes to the TAR DIGEST, to make it more useful to you!

The Hot Line letters will almost certainly remain a regular feature, but some other things may not. Our goal is not to duplicate other newsletters and news services that members receive, but instead to offer you a Tennessee-specific resource to help you:

  1. Stay out of trouble;
  2. Be more successful; and
  3. Save time and avoid hassles!

8. Rates Still Near Record Low: 3.40

Last week, the average interest on 30-year fixed mortgages according to Freddie Mac was 3.40 percent, still near its all-time low of 3.36 percent.

And the average rate on 15-year mortgages was 2.69 percent, very near its all-time low of 2.66.

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


9. 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/