The 12-2-14 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville


1. Upcoming COURSES & EVENTS
2. TREC Disciplinary Actions in October
3. Five Predictions for the 2015 Real Estate Market
4. About That Sewer Connection…
5. Reluctant To List in the Holiday Season?
6. Helping Credit-Challenged Clients
7. HOT LINE: Reducing Price in Lieu of Repairs?
8. HOT LINE: Extending Time for Response to an Offer?
9. HOT LINE: TAR Contract Form Has Been Modified!
10. Check Your Own CE Hours, Etc.

“How would your life be different if… You stopped making negative judgmental assumptions about people you encounter? Let today be the day… You look for the good in everyone you meet and respect their journey.” — Steve Maraboli

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


1. Upcoming COURSES & EVENTS

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/


2. TREC Disciplinary Actions in October

At its October meeting, the Tennessee Real Estate Commission (TREC) imposed significant fines ($1,000-$2,000) and additional penalties on four (4) individuals for the following offenses:

– Failure to diligently exercise reasonable skill and care in providing service to all parties to the transaction (MULTIPLE)
– Failure to adequately supervise the activities of an affiliate
– Operating with an expired firm license
– Failure to respond to a complaint with the commission

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

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3. Five Predictions for the 2015 Real Estate Market

In its November U.S. Economic and Housing Market Outlook, Freddie Mac outlined five predictions for the real estate market in 2015:

– Interest rates climbing throughout 2015 and rising to 5.0 percent by the end of next year;
– Annual house price gains to slow from 9.3 percent in 2013, to 4.5 percent in 2014 and 3.0 percent in 2015;
– Total housing starts to increase by 20 percent from 2014 to 2015 and total home sales to increase by about 5 percent over that time period to the best sales pace in eight years;
– Single-family mortgage originations to fall an additional 8 percent from 2014 to 2015 and a drop in refinancing; and
– Multifamily mortgage originations increasing, up about 14 percent in 2015 over 2014.

To read more, go HERE.

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4. About That Sewer Connection…

One of the more common MISrepresented items in listings for sale is whether or not a home is on septic or is connected to the local sewer system. In many municipalities, even the property owner may think a home is connected to the sewer system because the owner’s water bill includes a billing for sewer services, only to discover that the property was never actually connected to the sewer at the time that services became available.

Recently NAR posted the description of a legal case in New York that is a great illustration of this problem. Read it to see what can occur when a seller knowingly or unknowingly claims that his property is on sewer when it isn’t… and the listing broker doesn’t check the actual status of the property in public records. In this case, the listing broker ended up paying $4,200 to the new owner as reimbursement for the costs of hooking up to the municipal sewer. All for failing to do his homework!

To read the whole case summary, go HERE.

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5. Reluctant To List in the Holiday Season?

If you have any prospective sellers “sitting on the sidelines” and reluctant to put their homes on the market during the holidays, a recent article by Realtor Melissa Brown may give you some good arguments as to why they should go ahead and list.

Her article (“Top 10 Reasons to Sell Your Home During the Holidays“) is written to sellers but her 10 reasons are yours to use!

To read what Melissa says, go HERE.

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6. Helping Credit-Challenged Clients

You may find yourself working with a client who has defaulted on a mortgage in the past or otherwise has a poor credit history. If so, a recent RISMedia article advises: be careful!

Home buyers are likely to look to their agent for advice on shoring up their credit score or settling a dispute, for example. While property practitioners can refer customers with credit flaws to a number of outside “experts” — including credit counselors, financial advisers, and CPAs — the challenge is in directing them to a reputable source that can actually provide the help they need.

Realty professionals must be especially wary of sending these customers to credit repair organizations, which are in the habit of deleting accurately reported information. That is tantamount to fraud, and a Realtor who steers a client to such a company could face liability. Rather, agents should point credit-challenged customers to the websites like www.consumerfinance.gov, www.ftc.gov, and www.myfico.com, where they can find truthful information and resources at no cost to them.

To read more, go HERE.

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7. HOT LINE: Reducing Price in Lieu of Repairs?

QUESTION: We have a contract that was contingent upon the home inspection. The inspection was completed, and in lieu of repairs, we want to reduce the purchase price. Which form do we use for this situation?

ANSWER: The boiler plate language of the 2014 TAR Purchase and Sale Agreement does not contain specific language by which the buyer and seller can agree to a reduction of the purchase price in lieu of repairs. However, this is something that the parties may do during the Resolution Period if they wish. If they do that, then we would recommend using F6, the Amendment form, and stating that:

1. Sales price shall be $__________

2. No repairs are required to be made by seller.

You would use form F6 instead of F5 in this situation since the parties are not agreeing on specific repairs. Be advised that, if the contract (before the price reduction) has already been submitted to a lender for financing, the amended contract should be submitted to the lender as a replacement for that one.

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

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8. HOT LINE: Extending Time for Response to an Offer?

QUESTION: Could TAR possibly provide a form — addendum or amendment — by which an offeror may unilaterally extend time for response if the original offer has not been accepted, rejected or countered?

ANSWER: An addendum is used BEFORE a contract is completed. For example, form F47 (VA/FHA Loan Addendum) is generally presented with the offer. An amendment is used AFTER a contract has been formed and is used to change the terms.

If the offer has not yet been accepted, rejected, or countered, you could use an addendum to extend the time period of the offer. It would only need to be signed by the buyer (offeror) unless or until the seller agrees to accept the offer.

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

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9. HOT LINE: TAR Contract Form Has Been Modified!

QUESTION: One of our agents received an offer from XYZ Realty. She noticed they have changed words in the F9 Purchase and Sale Agreement. I don’t mean by striking thru them. I mean they have added typed words and modified what we know as the F9. The changes are not obvious. They are the same font.

Can a company put TAR Purchase and Sale Agreement F9 at the bottom of their forms and then modify the hard-coded form?

ANSWER: TAR has recently discovered that some folks are doing this to the boiler plate language of the TAR forms. Beginning next year, there will be specific rules in place to make it clear that members are PROHIBITED from changing the language of the TAR forms unless it is done so in a manner in which it will be obvious that language has been added. They will be required to put the changes in different font and also to remove the TAR logos from the bottom of the forms so to place other Realtors on notice that changes have been made.

In the meantime, you will need to be vigilant in ensuring that the boilerplate language has not been altered.

[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/