The 1-13-15 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville

1. Mortgage Rates Fall to Lowest Level Since 2013!
2. NAR Predicts Sales To Rise By Nearly 7 Percent in 2015
3. Getting Your Business Ready for 2015
4. Realtor Kidnapped – Another Safety Reminder!
5. Upcoming COURSES & EVENTS
6. HOT LINE: Valid vs. Invalid TAR Forms?
7. HOT LINE: What Actually Constitutes a Closing?
8. HOT LINE: Applying One’s Commission to Closing Costs?
9. HOT LINE: PUD Document Disclosure …When?
10. Check Your Own CE Hours, Etc.

“Forget past mistakes. Forget failures. Forget everything except what you’re going to do now and do it.” — Will Durant

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

1. Mortgage Rates Fall to Lowest Level Since 2013!

Mortgage interest has dropped to levels not seen since May 2013, according to Freddie Mac. The company reports that average interest on 30-year fixed loans landed at 3.73 percent this past week compared to 3.87 percent the prior week and 4.51 percent a year ago. The 15-year fixed rate, meanwhile, slipped to 3.05 percent from 3.15 percent the previous week and from 3.56 percent at the same time in 2014. Despite the persistently low borrowing costs, many would-be home buyers remain on the sidelines due to the inability to cobble together a down payment or qualify for financing.

2. NAR Predicts Sales To Rise By Nearly 7 Percent in 2015

In a newly released video on his 2015 housing market expectations, National Association of Realtors (NAR) chief economist Lawrence Yun forecasts that resales will rise about 7 percent this year thanks to three factors: a strengthening economy, solid job gains, and a healthy increase in home prices.

In the video, Yun states, “Home prices have risen for the past three years cumulatively about 25 percent, which boosts confidence in the market and traditionally gives current homeowners the ability to use their equity buildup as a down payment towards their next home purchase.” He also expects first-time buyers to slowly move from the sidelines, especially as new mortgage products are made available to them with low down payments and private mortgage insurance.

On the downside, Yun cites three areas of concern — a likely rise in interest rates, lenders’ slow pace in easing underwriting standards back to normalized levels, and homeowner unwillingness to move due to comfort with an existing low interest rate — that could slow the pace of sales in 2015.

To view the video online, go HERE.

3. Getting Your Business Ready for 2015

A new RISMedia article by Patty McNease (“5 Easy Tips to Get Your Business Ready for 2015“) offers five excellent, “doable” recommendations for both Individual agents and brokers, as you gear up for a successful 2015:

Update Social Accounts
Catch-up on Communication
Refresh Recommendations
Verify Business Listings
Review Triumphs and Failures

This is the best time for you to get organized and consider your goals for the months ahead! To read more about each of the above recommendations, go HERE.

4. Realtor Kidnapped – Another Safety Reminder!

The [Sacramento, CA] Realtor came to show a model home to someone she thought was a potential buyer on Thursday, but police say she was instead handcuffed and held captive by [David] Burnhart. She was held captive for about an hour.

Police say Burnhart told the agent they were going to walk out of the home together. Instead, after Burnhart walked out, the agent slammed the door behind him and locked it. That’s when he jumped in his truck and took off.
*** END QUOTE ***

The alleged kidnapper, David Burnhart, is a registered sex offender and was subsequently arrested. Fortunately, in this case the Realtor apparently escaped unharmed! BUT …this episode last week is yet ANOTHER reminder to establish better safety procedures when asked to show property to strangers.

To read more about what happened, go HERE.

To see the new NAR video with 12 safety steps to take, go HERE.

5. Upcoming COURSES & EVENTS

Jan. 21: The NEW 2015-2016 TREC Core Course (6 hrs. CE) — TAR Office, Nashville. This new Core Course is updated with information affecting your business! For more information and/or to register, go HERE.

The complete 2015 Schedule of GRI courses is posted on the TAR website at:

You can ALSO begin work toward your GRI designation in 2015 ONLINE! To find out how, go to:

To see upcoming offerings of TREC CORE COURSES, ABR COURSES, etc., – at locations around the state – go to the TAR Calendar at:

6. HOT LINE: Valid vs. Invalid TAR Forms?

A retraction and clarification of the Hot Line Question regarding valid versus invalid TAR forms — published in the 1-13-15 issue of the DIGEST is being prepared by TAR’s staff and attorney and will be published shortly.

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

7. HOT LINE: What Actually Constitutes a Closing?

QUESTION: I recently represented a seller on a property that was closed on a Friday afternoon. All documents were signed by both parties but due to an accident, they did not get to the buyer’s title company before the wire cut-off time. Our title company called to inform me they did not receive the wire, and it had been initiated with the following Monday’s date on it.

I then called the buyer’s agent to inform him payment of purchase price had not been made so his buyer should not take possession. He told me he had already moved in. When I asked him to have his buyer sign a Temporary Occupancy Agreement, he refused claiming because all documents were signed, it was a done deal.

I sent him a Temporary Occupancy Agreement for his buyer to sign along with a letter to document our conversation and my Broker sent a letter to his Broker. We spent the weekend not hearing from either of them. The buyer moved into the house.

It is my understanding that possession takes place with delivery of warranty deed and payment of purchase price. Since it did not fund, am I correct in assuming it is not closed or is he correct in assuming it is since docs were signed and the wire was initiated?

ANSWER: You are correct. Closing did not actually occur on Friday. The TAR Purchase and Sale Agreement states on lines 170-173:

“A. Closing Date. This transaction shall be closed (“Closed”) (evidenced by delivery of warranty deed and payment of Purchase Price, the “Closing”), and this Agreement shall expire, at 11:59 p.m. local time on the ____ day of _________, _____ (“Closing Date”), or on such earlier date as may be agreed to by the parties in writing.”

This means that the closing is not completed until all the documents have been signed, the warranty deed is delivered AND the purchase price is paid. If the closing is not completed early enough in the day, the transaction is not “closed” until the following day when the wire transfer is completed.

Many agents and most of the general public do not understand this concept.

You were correct to err on the side of caution and to request a temporary occupancy agreement which would protect the parties in the event of a disaster over the weekend until the wire transfers cleared on Monday.

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

8. HOT LINE: Applying One’s Commission to Closing Costs?

QUESTION: Is it okay to redirect a commission towards closing costs for a client?

ANSWER: We’ve addressed this before. TREC does NOT permit agents to pay closing costs.

The Legislature recently passed a law that states: “A real estate licensee shall not give or pay cash rebates, cash gifts or cash prizes in conjunction with any real estate transaction. As part of the Tennessee Real Estate Commission’s general rulemaking authority the commission may regulate the practices of real estate licensees in regard to gifts, prizes or rebates that are not otherwise prohibited by law.” — Tenn. Code Ann. 62-13-302(b).

TREC has interpreted this law as prohibiting agents from paying closing costs for their clients. Therefore, if there are closing costs which appear on the HUD, you cannot pay them.

Otherwise, an agent CAN offer to reduce his or her commission, but cannot pay the closing costs. However, this does not mean that the overall commission would be reduced. A buyer’s agent would have to have both the seller’s agent and the seller agree to reduce the commission and apply this to the closing costs (this is because the seller is typically under contract to pay a certain percentage to his agent regardless of whether there is an agent working with the buyer). Then, the contract would have to indicate that the SELLER was paying that portion of the closing costs.

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

9. HOT LINE: PUD Document Disclosure …When?

QUESTION: Is there a mandate as to when the PUD (Planned Unit Development) documents have to be given to a potential homebuyer in a new development (i.e., at signing of a contract, closing, etc.)?

ANSWER: Tenn. Code Annotated 66-5-213 states:

“(b) In addition to any other disclosures required in this part with regard to transfers described in 66-5-201, the owner of the residential property shall, prior to entering into a contract with a buyer, disclose in the contract itself or in writing, including acknowledgment, if the property is located in a PUD, and make available to the buyer a copy of the development’s restrictive covenants, homeowner bylaws and master deed upon request.

As you can see by part (b), the seller must disclose that the property is in a PUD either BEFORE entering into a contract or within the contract itself. The statute is a bit gray as to when the PUD documents must be given to the new buyer. It simply states that they must be conveyed upon request. Therefore, we would make sure that any contract written is contingent upon the buyer receiving and approving these documents.

[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: