The 7-29-14 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville

1. Upcoming COURSES & EVENTS
2. TREC Disciplinary Actions in June
4. Five Unspeakables
5. The Latest “Voice for Real Estate”
6. Register NOW…
7. HOT LINE: Jointly Marketing with a Lender?
8. HOT LINE: Inspection Report to the Lender?
9. HOT LINE: Agency Disclosure …When?
10. Check Your Own CE Hours, Etc.

“To succeed in life, you need three things: a wishbone, a backbone and a funnybone.” — Reba McEntire

NOTE: If you’re reading this on a mobile device (iPhone, etc.), GO HERE for a mobile-friendly DIGEST.

1. Upcoming COURSES & EVENTS

Aug. 4 & 5: Real Estate Collaborative Specialist-Divorce (RCS-D) Training – TAR Office, Nashville. Each day is accredited for six (6) hours of CE! To register only for Day 1, or Days 1 & 2 together, or just to get more information, go HERE.

Aug. 12-13: Accredited Buyer Representative (ABR) 2-Day course, approved for 16 hrs. CE – TAR Office, Nashville. For more information or to register, go HERE.

To see our 2014 GRI Schedule, go to:

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:

July 20th was National Lollipop Day, so The CE Shop has a sweet treat for you! Get 20% off your entire online continuing Education (CE) for the entire month of July! Enroll today at: …and enter promocode “lollipop20” at checkout to receive your discount!

2. TREC Disciplinary Actions in June

At its June meeting, the Tennessee Real Estate Commission (TREC) revoked one license, and imposed significant fines ($500-$2,000), and additional penalties (classes, etc.), on eight (8) individuals for the following offenses:

Failure to adequately supervise activities of affiliates
Failure to adequately supervise activities of affiliates (Advertising)
Failure to timely disburse/interplead earnest money
Failing, within a reasonable time, to account for or to remit moneys belonging to others
Failure to timely account for trust fund deposits and all other property received from any party to the transaction
Failure to timely complete required education (MULTIPLE)
Engaging in unlicensed activity
Accepting a commission or consideration from any person except broker
Operating an unlicensed firm
Failure to respond to a complaint filed with the Commission
Engaging in real estate activities with a retired license
Failure to maintain Errors and Omissions insurance

NOTE: The (MULTIPLE) notation indicates that more than one licensee was punished for this reason.

IN ADDITION TO the above, five (5) other licensees had their licenses suspended by the Commission.


Effective July 31, 2014, the form “F25 – Personal Property Agreement (Bill of Sale)” will be removed from the TAR forms inventory and will no longer be available.

The TAR Residential Forms committee was recently made aware of several instances involving the use of form F25 – Personal Property Agreement (Bill of Sale) and how it has created some very unfortunate situations for real estate agents. Given the increased regulation of financial institutions, these types of agreements are riskier than in the past and could lead to personal liability for personal property items in the event of a negative judgment against agents. Remember that ALL TAR forms are subject to periodic revisions and it is the responsibility of the TAR member to use the most recent available form OR in this case, to discontinue use of it. Both TransactionDesk and Forms on the Fly will no longer contain F25 after July 31, 2014.

For more information, please read:

4. Five Unspeakables

Consultant Rob Hahn was a speaker at a recent California Association of Realtors event, organized to look at the strategic issues facing the real estate industry. He then wrote an article last week (“The Five Unspeakables from the California Association of REALTORS Event”) reflecting on that event, and “the five things that we in the industry talk about privately, acknowledge as problems, but don’t really discuss in polite company.”

The five things he discussed at that event and in his article – “the Five Unspeakables in the industry” – are:

1. Too much incompetence
2. Agent Teams are the future of the industry
3. Technology only makes things more efficient
4. The MLS is Broken
5. It ain’t data, it’s advertising
*** END QUOTE ***

One sentence, in particular, caught our attention, especially in light of the rumored acquisition of Trulia by Zillow (creating a HUGE online real estate portal if/when it occurs …see THIS): “Thanks to companies like Trulia, Zillow, Move, and Redfin (and others), the consumer has mobile apps to access property information that are lightyears beyond what the professional has at her disposal.”

This is a thought-provoking article and worth your time, even if you don’t agree with all of his conclusions. To read it, go HERE.

5. The Latest “Voice for Real Estate”

In the third video in The Voice for Real Estate video news series, NAR Director of Broadcasting Stephen Gasque looks at NAR President Steve Brown’s recent FHA discussion at the White House, the state of commercial drone regulation, and lingering concerns over the impact of the Qualified Mortgage rule’s ability-to-repay requirements on mortgage lending.

6. Register NOW…

The upcoming TAR Annual Convention in Chattanooga (Sept. 17-19) promises to be fun, educational and a great way to end a busy summer! Realtors really are going to ROCK Chattanooga! If you’ve never been to your state’s Annual Convention, this is a good one to attend!

The education sessions feature great topics to help you build your business, stay out of trouble, and be even more successful. And you don’t want to miss this year’s speakers: Darryl Davis, G. William James, Leigh Brown, and Cheryl Knowlton.

Registration at early-bird rates is STILL available! For more information, or to register, go to:

7. HOT LINE: Jointly Marketing with a Lender?

QUESTION: I have had a lender approach me regarding a joint marketing and referral program. Is this permitted?

ANSWER: Under RESPA, “No person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person.” — 12 USC 2607(a).

A real estate settlement service defined as:

“any service provided in connection with a real estate settlement including, but not limited to, the following: title searches, title examinations, the provision of title certificates, title insurance, services rendered by an attorney, the preparation of documents, property surveys, the rendering of credit reports or appraisals, pest and fungus inspections, services rendered by a real estate agent or broker, the origination of a federally related mortgage loan (including, but not limited to, the taking of loan applications, loan processing, and the underwriting and funding of loans), and the handling of the processing, and closing or settlement.” — 12 U.S.C. 2602(3).

You can engage in joint advertising with a mortgage company, but you MUST each pay your prorated share of the advertising costs. For example, if 95% of an ad was devoted to advertising the real estate firm, then the real estate firm must pay 95% of the advertising cost. You cannot receive anything of value as a thank you for recommending a mortgage company. Finally, if you are going to recommend a mortgage company, recommend several and let the client do their own research. That lessens your liability in the event something goes wrong.

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

8. HOT LINE: Inspection Report to the Lender?

QUESTION: I have a buyer that I’m representing and she is under contract for a condo in the Nashville area, and the lender is requesting a copy of all inspections. It has not been my experience that lenders request a copy of the home inspection report. I am accustomed to only providing the termite inspection to the lender. Am I required to provide her a copy?

ANSWER: This has come up before. Some banks are requiring copies of the home inspections. Therefore, if your buyer instructs you to forward the report to the lender, you should do so. The lender could deny the loan based on the failure to provide the report.

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

9. HOT LINE: Agency Disclosure …When?

QUESTION: When must agency disclosure occur?

ANSWER: Under the Broker’s Act, confirmation of agency is required to be done orally, and then in writing if the other side is not represented by an agent:

“(a) If a licensee personally assists a prospective buyer or seller in the purchase or sale of a property, and such buyer or seller is not represented by this or any other licensee, the licensee shall verbally disclose to such buyer or seller the licensee’s facilitator, agent, subagent or designated agent status in the transaction before any real estate services are provided….

(b) The disclosure of agency status pursuant to subsection (a) must be confirmed in writing with an unrepresented buyer prior to the preparation of an offer to purchase. The disclosure of agency status must be confirmed in writing with an unrepresented seller prior to execution of a listing agreement or presentation of an offer to purchase, whichever comes first. Following delivery of the written disclosure, the licensee shall obtain a signed receipt for such disclosures from the party to whom it was provided. The signed receipt shall contain a statement acknowledging what the buyer or seller, as applicable, was informed that any complaints alleging a violation or violations of 62-13-312 must be filed within the applicable statute of limitations for the violation set out in 62-13-313(e). The acknowledgment shall also include the address and telephone number of the Commission.” — Tenn. Code Ann. 62-13-405(a, b).

You will notice that you have to have a signed receipt from the party to whom it was provided if that party is unrepresented. Therefore, the buyer and seller should sign the same form if one of the parties is unrepresented.

As a Realtor, you are ALSO subject to the NAR Code of Ethics. Pursuant to Standard of Practice 16-10:

“Realtors, acting as buyer or tenant representatives or brokers, shall disclose that relationship to the seller/landlord’s representative or broker at first contact and shall provide written confirmation of that disclosure to the seller/landlord’s representative or broker not later than execution of a purchase agreement or lease.”

Pursuant to Standard of Practice 16-12:

“Realtors, acting as representatives or brokers of sellers/landlords or as subagents of listing brokers, shall disclose that relationship to buyers/tenants as soon as practicable and shall provide written confirmation of such disclosure to buyers/tenants not later than the execution of any purchase or lease agreement.”

[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:

To go to the TAR website:

To access current and past TAR DIGESTS:

Follow TAR on Twitter at:

TAR’s LinkedIn page:

TAR’s page on Facebook:

To ask a TAR Legal and Ethics Hot Line question:

For CE classroom courses around the state, go to:

For online CE courses, go to:

Tennessee Real Estate Commission: