The 3-4-14 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville


1. Upcoming COURSES & EVENTS
2. 2014 TAR Spring Conference DEADLINE!
3. The 2014 Cost vs. Value Report
4. TAR Governmental Affairs Update!
5. Earning Repeat Versus New Business
6. Mortgage Applications Drop Significantly
7. A RESPA-Related Lawsuit Is Making News
8. HOT LINE: Seller Wants to Move Two Days After Closing?
9. HOT LINE: Buyer Doesn’t Do a Home Inspection?
10. Check Your Own CE Hours, Etc.

“Success each day should be judged by the seeds sown, not the harvest reaped.” — John C. Maxwell


1. Upcoming COURSES & EVENTS

March 11-12: The Learning-Centered Instructor Workshop (16 hrs. CE) — hosted by the Williamson County Association. For more details, go HERE.

To see upcoming offerings of TREC CORE COURSES, ABR COURSES, etc., – at locations around the state – go to the TAR Course calendar at: http://tnrealtors.com/education/realtor-courses/

Our 2014 GRI Classroom Course Schedule is posted in the “Education” section of the TAR website: http://tnrealtors.com/education/gri/

During the month of March you can feel the Luck O’ The Irish because The CE Shop is offering our members 15% off every one of their courses and online packages! This is a Limited Time Offer! Enroll today: http://tarnet.theceshop.com/ …and enter “lucky15” at checkout to receive your discount!


2. 2014 TAR Spring Conference DEADLINE!

This coming FRIDAY, MARCH 7, is the DEADLINE for Early-Bird Registration for the 2014 TAR Spring Conference! Registration goes up by $50 after that date! And there is NO on-site registration. Everyone must register in advance!

For info on registering for both the Conference and the Hotel, go to: http://tnrealtors.com/meetings-and-events/spring-conference/

The Spring Conference at the Cool Springs Marriott, just south of Nashville, is often our biggest event of the year, and features 10 hours of Education Sessions with national speakers, all designed to give your business a boost. For a Early-Bird registration fee of only $75, it’s also one of the best bargains you’ll find anywhere!


3. The 2014 Cost vs. Value Report

If you have clients considering upgrades or improvements to their properties before putting them on the market, it might be useful to consult Remodeling Magazine’s 2014 Cost vs. Value Report, specifically the report for the East South Central region of the U.S. (TN-KY-AL-MS).

Want to know what the resale value is for a Bathroom Remodel versus its cost?
Or a Master Suite Addition?
Or a (wood) Deck Addition?

Go to: http://www.remodeling.hw.net/cost-vs-value/2014/east-south-central/


4. TAR Governmental Affairs Update!

A special legislative update from Kendra Cooke, TAR’s Governmental Affairs Committee Chair:

It is with great pleasure to be able to share with you that Senate Bill 1761/House Bill 1663 passed UNANIMOUSLY in both the State House and Senate and on its way to the Governor to be signed. This TAR-supported legislation amends current law to increase the occasions where commercial real estate brokers can recover their commissions.

This bill was about fairness and protecting the commercial agent’s right to his or her commission. A special thanks goes out to Senator Bill Ketron and Representative Andrew Farmer for bringing this legislation to the General Assembly.

Before this bill, the law only considered situations where a commercial real estate broker’s commission was payable over time, which generally coincided with the payment of rent. However, there are many instances where the commission is not payable over time, but in a lump sum. This lump sum may be payable upon execution of the lease, at the date of occupancy, or at some later date. Essentially, the property could be transferred to a subsequent owner who will clearly be receiving the benefit of the real estate agent’s work but the broker is left attempting to collect his commission from an entity which may no longer exist and/or is not in a financial position to pay such commission.

This bill will follow all established notice requirements and any liability of a subsequent owner will require, just as it does under the current law, that any future owner have prior notice of the broker’s right to receive compensation by the filing of a notice with the Register of Deeds Office.

This is fair legislation protecting Realtor commissions.


5. Earning Repeat Versus New Business

Although the National Association of Realtors’ most recent Profile of Home Buyers and Sellers shows that 88 percent of buyers and 84 percent of sellers would use the same real estate licensee again, Realtor Bob Hunt points out that only 12 percent of buyers and 25 percent of sellers actually do engage with their previous agent.

The gap between stated intentions and actual actions can be explained in part by turnover in the industry and sellers moving far away, but the failure of the agent to maintain contact also plays a role. Business advisers estimate that it costs six to seven times more to obtain new customers than to retain existing ones. Agents’ web presence generally is focused on luring new clients; but experts stress that they need to devote time, money, and energy toward reaching out to existing customers — which involves more than mailing out Christmas cards. Those who make an effort to keep in touch with past clients will reap the rewards of repeat business and referrals.

Mr. Hunt elaborates on the above in a recent Realty Times article HERE.


6. Mortgage Applications Drop Significantly

As the peak spring market for home sales approaches, analysts point to a troubling softening in loan demand. Mortgage Bankers Association chief economist Mike Fratantoni said that while “this is the time of a year we would expect a significant pickup in purchase activity . . . we are not yet seeing it.”

Rather, MBA reports, applications for credit to buy a home sank 4 percent last week to the lowest level in almost 20 years. On an annual basis, the volume is 15 percent lower than during the comparable period of 2013. Refinancing requests are down as well, tumbling 11 percent last week from the previous week. The weak activity has been attributed to harsh weather this winter; but the biggest decline in home sales was seen in the West, where snow and cold were less of an influence. “We’re at a critical juncture in housing, and it started when rates went up a small 1 percentage point back in June,” said housing analyst Mark Hanson. “We’re going from an investor-led housing market to an end user-led housing market, and that’s creating a lot of problems.”

To read more: http://www.cnbc.com/id/101446044


7. A RESPA-Related Lawsuit Is Making News

Real estate columnist Ken Harney posted an article on Inman News last week (“Top-producing Long & Foster team facing class-action RESPA suit over alleged kickbacks”) about a lawsuit filed last month against a high-producing team in Maryland:

*** BEGIN QUOTE ***
A federal district court’s decision to certify a class-action suit against one of the highest-volume Realtor teams in the country should set off alarms for brokerage firms that have marketing agreements between themselves and settlement service providers, say RESPA legal experts.

Not only is the class-action certification ominous in its own right, but it comes on top of indications that the Consumer Financial Protection Bureau is actively probing marketing agreements and other forms of affiliated business dealings, and is preparing at least several, as yet unannounced, enforcement actions involving realty firms.
*** END QUOTE ***

To read more, go HERE.


8. HOT LINE: Seller Wants to Move Two Days After Closing?

QUESTION: I represent the buyer. The seller wants my buyer to allow him 2 days after we close to move out. I need to know what, if any liability, my buyer will have if something was to happen during the 2-day period? What do I need to do to ensure my buyer is covered?

ANSWER: TAR has two different occupancy agreements which can be used in the event that possession does not occur at closing. The first, the Temporary Occupancy Agreement for the Buyer Prior to Closing (F31), can be used if the buyer moves in prior to closing. The other, the Temporary Occupancy Agreement for Seller after Closing (F32), can be used if the seller does not move out prior to the closing date. These two agreements provide security for the parties. They both establish who is responsible for what, the legal rights and obligations of the parties, and what happens in the event that possession is not transferred when it supposed to do so.

We STRONGLY recommend that these forms be used in the event that possession does not occur at closing. Otherwise, many issues could arise in the event that something happens to the property, questions arise regarding utilities, and what happens if possession is not given as planned.

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


9. HOT LINE: Buyer Doesn’t Do a Home Inspection?

QUESTION: If an agent does not check the box on the Residential Purchase and Sale Agreement “To Waive All Inspections” but does not do a Home Inspection, are they required to provide a form stating so?

ANSWER: No. The 2014 Purchase and Sale Agreement states that the buyer is to perform any inspections they wish during the Inspection Period. Before the end of the Inspection Period, the buyer is required to either terminate the contract, state that they will take the property “As Is”, or request repairs. Lines 240-243 state:

“In the event Buyer fails to timely make such inspections and respond within said timeframe as described herein, the Buyer shall have forfeited any rights provided under this Paragraph 8, and in such case shall accept the Property in its current condition, normal wear and tear excepted.”

The Forms Committee intended this language to govern in the event that the buyer fails to make an election during the Inspection Period. They intended that if the buyer did not make an election, that they would be taking the property “As Is”.

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


10. Check Your Own CE Hours, Etc.

To check your CE credits on file with TREC, go to: http://verify.tn.gov

To go to the TAR website: http://tnrealtors.com

To access current and past TAR DIGESTS: http://www.tardigest.com

Follow TAR on Twitter at: http://twitter.com/tnaor

TAR’s LinkedIn page: http://www.linkedin.com/groups?gid=852077&trk=hb_side_g

TAR’s page on Facebook: http://www.facebook.com/pages/Nashville-TN/Tennessee-Association-of-RealtorsR/15041383689

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

For CE classroom courses around the state, go to: http://tnrealtors.com/education/realtor-courses/

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

Tennessee Real Estate Commission: http://tn.gov/regboards/trec/