The 5-27-14 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville


1. Upcoming COURSES & EVENTS
2. Realtor Income on the Rise
3. HELP WANTED: Seller Finance Examples!
4. All-Cash Transactions Still Dominate
5. How Far Money Goes, in 356 Different Cities!
6. First-Time Homebuyers Are Harder to Find
7. HOT LINE: Seller Selling His Own Property?
8. HOT LINE: Presenting Offer on an Old Form?
9. Check Your Own CE Hours, Etc.

“The successful warrior is the average man, with laser focus.” — Bruce Lee


1. Upcoming COURSES & EVENTS

June 3: NAR 2013-2016 Ethics Course (3 hrs. CE) – TAR Office, Nashville. For more information or to register, go HERE.

To see our 2014 GRI Schedule, go to: http://tnrealtors.com/education/gri/

Why Should YOU Earn Your GRI? 10 Reasons!

To see upcoming offerings of TREC CORE COURSES, ABR COURSES, etc., – at locations around the state – go to the TAR Calendar at: http://tnrealtors.com/meetings-and-events/calendar-of-events/

May is STILL a great time of year. Warmer weather, baseball, the promise of summer fun and so much more! To help you have some CE fun, the CE Shop is extending a 15% discount on online courses through the month of May! Enroll today: http://tarnet.theceshop.com/ …and enter “homerun15” at checkout to receive your discount!


2. Realtor Income on the Rise

Home prices are not the only things rising.

According to recent National Association of Realtors (NAR) data, the median gross income of a Realtor nationwide rose to $47,700, an increase of 9.6 percent from 2012. Realtors with over 16 years of experience had a median income of $70,200. Those with less than 3 years of experience had a median income of $30,100.


3. HELP WANTED: Seller Finance Examples!

Seller financing continues to remain a hot topic in Tennessee. Federal and State laws dictate what can and cannot be done, such as allowing for five (5) such transactions per year without have to be licensed as a mortgage loan originator. TAR continues to press the federal government for more reasonable standards, but we need actual examples you have with seller-financed transactions.

For instance, it has been shared that a typical individual who might be a subject for exemption from licensing would be a person who owns a large parcel of land and, in order to facilitate a sale of the land, desires to subdivide it into smaller tracts and to finance the sale of those tracts to multiple buyers/borrowers. There are currently some exemptions from licensing available under Tennessee law, but they are limited. For instance, a person might inherit the family farm in rural Tennessee, attempt to sell the property as a single parcel, but find that there is no market due to size, cost or availability of credit in the area. This person, being unable to afford to maintain the property, finds that the most expedient method of disposal is to subdivide the property into multiple parcels, sell the parcels at auction and perhaps finance many of those sales. One consideration by federal regulators is whether the financing activity is such as to demonstrate the habitualness or repetition in a commercial context that is needed to engage in the business of a loan originator.

Is this example a common issue seen by you in Tennessee? Other states?

Are there other common examples that could be considered?

Please PROVIDE EXAMPLES of your sense of the seller finance process by emailing:


4. All-Cash Transactions Still Dominate

All-cash deals now account for about 40 percent of U.S. home sales, according to CoreLogic, up from about a quarter of home sales historically. And more of these buyers are individuals rather than institutional investors.

Wealthy people, foreigners, and retirees offering cash are helping to make up for the alarming absence of first-time buyers. A recent survey from the National Association of Realtors (NAR) shows the share of investors has declined from 24 percent in 2012 to 19 percent last year and the first quarter of this year. “Since the supply of distressed properties has thinned out, we expected the all-cash sales would be falling but that’s not the case,” says NAR chief economist Lawrence Yun. CoreLogic’s data shows that the share of cash sales remains high among non-distressed properties, which are less attractive to investors.

To read more from the Washington Post, go HERE.


5. How Far Money Goes, in 356 Different Cities!

National Public Radio (NPR) recently tackled the issue of just how far a paycheck goes in various cities across the country, according to Bureau of Economic Analysis figures from the federal government.

A fascinating graph compares the annual median income for typical, full-time workers in different metro areas with the actual cost of living in each metro area. In some areas, for example, an income of $70,000 might only “feel” like an income of $50,000 because the cost of living is so high!

The nice thing about this article is that you can enter any city you want (if it’s a mid-sized or larger city in the U.S.), and find the comparison for that city!

To read more and try out this online tool, go HERE.


6. First-Time Homebuyers Are Harder to Find

According to the Wall Street Journal, ambitious hopes for the U.S. housing recovery have been dampened as real estate agents, home builders, and economists come to the realization that first-time home buyers are simply not yet taking part in the rebound.

Price appreciation, tough underwriting criteria, a lackluster economic landscape, and bleak financial circumstances are keeping many of these prospective buyers on the sidelines — and may continue to do so for a few more years. “We likely have hit the bottom in the past six months or so regarding the lack of participation of first-time buyers,” remarked National Association of Realtors chief economist Lawrence Yun. “It may take three years to return to normal first-time buyer participation.”

This group accounted for about 29 percent of home purchases last month, according to NAR, down from 40 percent to 50 percent throughout 2009 and 2010 when a federal tax credit for new homeowners was in play. For new homes, the National Association of Home Builders said first-timers accounted for about 16 percent of transactions compared to 25 percent to 28 percent between 2001 and 2007.

To read more, go HERE.


7. HOT LINE: Seller Selling His Own Property?

QUESTION: How can we use an exclusive right to sell listing form to create an exclusive agency relationship, letting the seller sell his/her own property?

ANSWER: You can use the Exclusive Right to Sell Listing Agreement, but you will need to add some language to the Special Stipulations. If you want to convert the listing agreement to an exclusive agency agreement, you can use the following special stipulation language which can be found on form F33:

18. SELLER RESERVES THE RIGHT TO SELL – EXCLUSIVE AGENCY AGREEMENT. The Seller hereby reserves the right to sell Property and hereby converts this Agreement into an Exclusive Agency Listing Agreement. If a Buyer is procured for the Property through the sole efforts of Seller acting alone, then Seller is not required to pay Broker the compensation contained herein. However, in the event that the Buyer is obtained through any efforts of Broker (included but not limited to any Broker advertising including but not limited to any internet advertising, listing in the MLS, or traffic created by any signage put in place by Broker), then the aforementioned compensation is due to Broker at closing.
— (Lines 187-193).

This will prevent the seller from listing it with multiple real estate firms, but will allow the seller to sell the property on his/her own without owing a commission.

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


8. HOT LINE: Presenting Offer on an Old Form?

QUESTION: I submitted an offer on a property for a buyer. The listing agent notified me that they would not present the offer until it was made on 2014 forms. Is this legal?

ANSWER: The Broker’s Act states “Unless the following duties are specifically and individually waived, in writing by a client, a licensee shall assist the client by receiving all offers and counter-offers and forwarding them promptly to the client.” — Tenn. Code Ann. 62-13-404(3)(A)(ii).

TREC Rule 1260-2-.08 states “A broker or affiliate broker promptly shall tender every written offer to purchase or sell obtained on a property until a contract is signed by all parties.” Therefore, an agent must present all offers to the client unless they have instructed them not to do so in writing and signed by the seller.

Furthermore, under Standard of Practice 1-6, “Realtors shall submit offers and counter-offers objectively and as quickly as possible.” In addition, Standard of Practice 1-7 states in pertinent part, “When acting as listing brokers, Realtors shall continue to submit to the seller/landlord all offers and counter-offers until closing or execution of a lease unless the seller has waived this obligation in writing.”

HOWEVER, we do need to point out that the agent’s request is actually for your own good. TAR only endorses the most recent version of any form. Therefore, you should only be using the 2014 version of the forms. If you use an older form, it may not be consistent with current law, and it does not provide the protections which the 2014 forms provide.

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


9. 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/