The 5-6-14 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville


1. Upcoming COURSES & EVENTS
2. If Homebuyers Could Do It Over Again….
3. Saying No to Lowball Offers
4. The Hazards of Chinese Drywall
5. Like a Good Neighbor?
6. HOT LINE: Other Agent Contacting My Client?
7. HOT LINE: Buyer Doesn’t Qualify for Loan?
8. HOT LINE: Agent Has Established a LLC?
9. Check Your Own CE Hours, Etc.

“I don’t know the secret to success, but the secret to failure is trying to please everyone.” — Bill Cosby

NOTE: Due to the Realtor Party Convention in Washington, DC, next week, there will be no TAR DIGEST. We will return with the 5-20-14 Edition!


1. Upcoming COURSES & EVENTS

May 7-9: Register for our three-course GRI package (GRI 404, 405, and 406) in Memphis through our GRI EXPRESS option and save $55! For more info or to register, go HERE.

May 7: GRI 404, Working More Effectively With Sellers (6 hrs. CE) – MAAR Office, Memphis. To register for this course only, go HERE.

May 8: GRI 405, Mastering Forms and Contracts (6 hrs. CE) – MAAR Office, Memphis. To register for this course only, go HERE.

May 9: GRI 406, Tips, Tools & Technologies For Your Business (6 hrs. CE) – MAAR Office, Memphis. To register for this course only, go HERE.

Why Should YOU Earn Your GRI? 10 Reasons!

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

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 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. If Homebuyers Could Do It Over Again….

Chase Mortgage Banking did a recent “What I Wish I Knew About the Homebuying Process” survey, asking homebuyers what they would do differently if they could go through the process again. The findings are revealing:

They felt ready, but:
Nine of every 10 recent homebuyers felt prepared when they bought their home, but in hindsight, 56% wish they were armed with more knowledge about the financial aspects of purchasing a home, including the ins and outs of closing on the house (22%), making the offer and negotiating (19%), and financing a home (15%).

Maybe a different size, price or neighborhood:
A total of 39% said that they would buy a different-size or different-priced home, or a home in a different neighborhood, knowing what they know now.

Longer, shorter and more expensive?:
Most recent homebuyers were surprised by how long the homebuying process took – 40% said it took longer than expected and 34% said it cost more than expected.

Always more to do:
More than 80% of recent homebuyers considered their home move-in ready, yet 76% have done or are planning to do renovations to their home in the near-term.

Who you gonna call?:
Two-thirds of recent homebuyers sought advice from real estate agents, while 45% turned to banks, mortgage bankers and loan officers.

To read more, go HERE.


3. Saying No to Lowball Offers

Inman News ran an interesting article this past week (“Just Say No to Lowball Offers: 4 Ways to Get Your Buyer Clients a Great Deal Without Offending the Seller”). According to the article, which originally appeared on the Trulia Pro Blog, there are several steps agents should take to prevent buyer clients from making lowball offers, which more than likely will trigger bid rejection by the sellers.

They should give them information about homes that have sold in the last few months and the difference between the list and sales prices, which should serve as a market reality check. Providing them with comparative sales data from the past two months should emphasize how prices are affected by square footage, lot size, age, and other factors. Moreover, they should stress that the average home search takes 12 weeks and that making a reasonable offer can prevent them from dragging out the process

Finally, agents should explain to buyers that sellers have an emotional attachment to the property, and lowball offers can be viewed as an insult and destroy any chance they had of securing the home.

To read more, go HERE.


4. The Hazards of Chinese Drywall

A USA Today story this past week offered some unsettling news.

The U.S. Agency for Toxic Substances and Disease Registry at the Centers for Disease Control and Prevention (CDC) issued its long-awaited report on May 2 regarding Chinese-made drywall, which was used in more than 20,000 U.S. homes. The report says the drywall, which has been the subject of numerous lawsuits, could have caused nosebleeds, headaches, difficulty breathing, and asthma attacks in those Americans exposed to it.

“The bottom line is that this modeling data suggests that levels of sulfur dioxide and other sulfur compounds found in the Chinese manufactured drywall were sufficiently high to result in the health effects people have been reporting,” said Vikas Kapil, chief medical officer with the U.S. Agency for Toxic Substances and Disease Registry at the CDC. Homeowners had filed health-related lawsuits tied to the drywall, and they also have alleged sulfur dioxide and other chemicals found in the drywall caused foul odors and corroded pipes and wiring. Five settlements totaling more than $1 billion were reached, but it is not clear how much of the drywall was replaced.

To read more, go HERE.


5. Like a Good Neighbor?

No, this isn’t an ad for insurance. It’s an appeal for nominations!

Barely two weeks remain to nominate someone for a NAR Good Neighbor Award, which recognizes Realtors who improve their communities through volunteer work. Five winners will receive $10,000 grants for their cause and national publicity for their non-profits, and five honorable mentions will receive $2,500 grants.

If you know a Realtor in your association who has really made a contribution of time and effort to his/her local community, PLEASE take this opportunity to recognize their efforts. The deadline for nominations is May 16!

For more information, go HERE.


6. HOT LINE: Other Agent Contacting My Client?

QUESTION: If an agent contacts one of your clients whose property you’ve listed just to “see how it’s going” and then offers advice on how they would do things differently to try and help, is this an ethical violation?

ANSWER: We would NOT recommend that agents do this! It could easily be found to be in violation of the Code of Ethics, and possibly TREC Rules and/or the Broker’s Act. Article 16 of the NAR Code of Ethics states “Realtors shall not engage in any practice or take any action inconsistent with exclusive representation agreements that other Realtors have with clients.”

Standard of Practice 16-13 states that:

“All dealings concerning property exclusively listed, or with buyer/tenants who are subject to an exclusive agreement shall be carried on with the client’s representative or broker, and not with the client, except with the consent of the client’s representative or broker or except where such dealings are initiated by the client.”

Pursuant to Tenn. Code Ann. 62-13-312(b)(10), an agent can be punished under Tennessee law for “Inducing any party to a contract, sale or lease to break such contract for the purpose of substitution in lieu thereof a new contract, where such substitution is malicious or is motivated by the personal gain of the licensee.”

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


7. HOT LINE: Buyer Doesn’t Qualify for Loan?

QUESTION: I received a Notification (F26) from the Purchaser’s Realtor indicating that the purchaser will not qualify for the loan. Does the Seller need to sign any form prior to the return of the earnest money?

ANSWER: Both the Notification form (F26) and the Earnest Money Disbursement and Release form (F30) have undergone some changes this year. Specifically, you referenced the buyer’s inability to qualify for financing. This is the provision which allows the buyer to terminate the contract in the event that they cannot receive financing. Under the terms of the contract, the buyer is permitted to do this. He does NOT need the approval of the seller to do so. Therefore, the Notification is adequate to convey that the buyer is exercising his contingency and terminating the contract. It also contains language which requests return of the earnest money pursuant to the terms of the contract.

The Earnest Money Disbursement and Release form (F30) is not technically required in that situation since the contract states that the buyer has the right to terminate and if he does so, he is entitled to the earnest money. However, some brokers want a document in which both parties agree to the distribution of the funds. This is because they may not be comfortable in making a reasonable interpretation of the contract, which would be done in the event that the earnest money is returned without the signature of F30.

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


8. HOT LINE: Agent Has Established a LLC?

QUESTION: If an agent has established a LLC, do we make their commission checks payable to the LLC or to the agent?

ANSWER: It’s been a while since we last addressed this issue. An agent can only be paid by their broker. Therefore, an individual licensee that has “incorporated” or “LLC’ed” himself CANNOT be paid a commission through the company. The individual holds the license, not the company. The only time that a company can hold a license is if it is a firm license. A company cannot be issued an individual license. Furthermore, pursuant to Tenn. Code Ann. 62-13-302(a):

“It is unlawful for any licensed broker to employ or compensate any person who is not a licensed broker or a licensed affiliate broker for any of the acts regulated by this chapter. A licensed nonresident broker may pay a commission to a licensed broker or another state if such nonresident broker does not conduct in this state any of the negotiations for which a commission is paid.”

In addition, Tenn. Code Ann. 62-13-312(b)(11) states that an agent can be disciplined for:

“Accepting a commission or any valuable consideration by an affiliate broker for the performance of any acts specified in this chapter, from any person, except the licensed real estate broker with whom the licensee is affiliated”

An agent can only be paid in the name of their license – whether it is a firm license or their individual license.

[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/