The 4-7-15 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville


1. Closing Costs Are Rising
2. New Video Highlights REO Sales & Health Insurance
3. NAR Pushes for Credit-Scoring Alternative
4. Are You TOO Busy, Busy, Busy?
5. Sales of Vacation Homes Soar
6. UPDATES on COURSES & EVENTS!
7. HOT LINE: Closing After Listing Expires?
8. HOT LINE: Can Lease/Purchase Still Be Marketed?
9. HOT LINE: Is Earnest Money Required?
10. Check Your Own CE Hours, Etc.

“Did you ever walk in a room and forget why you walked in? I think that’s how dogs spend their lives.” — Sue Murphy

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


1. Closing Costs Are Rising

According to Bankrate.com’s annual survey, closing costs are indeed rising …significantly. The Bankrate.com article really includes a lot of useful information, and it’s probably a good idea to prepare your buyers and sellers for the increase.

Nationwide, the costs have rose 5.7 percent in 2014 over 2013 costs. Origination fees alone rose 8.5 percent.

Why is it happening? “The biggest reason (for the higher fees) is the additional regulations,” says Dan Stevens, sales operation manager and vice president of National Bank of Kansas City. “The No. 1 at the moment is the qualified mortgage rule. That alone has really added additional man-hours to the mortgage approval process.”

To read more, go HERE.

In Tennessee — on a hypothetical $200,000 loan — the average closing costs are:

Average origination fees charged by lenders: $1,746
Average third-party fees: $620
Average origination plus third-party fees: $2,366

To see a breakdown of these figures for Tennessee, go HERE.


2. New Video Highlights REO Sales & Health Insurance

The federal government is making it easier for households to buy Fannie Mae and Freddie Mac REO properties. Owner-occupants get a 20-day window to purchase the properties before investors can come in to buy them. The policy reflects an effort by NAR to help strengthen hard-hit communities by allowing families and other households to get a first shot at buying distressed properties.

NAR’s latest “The Voice for Real Estate” news video also looks at a special open enrollment period the government is offering people who would otherwise be facing a penalty for not having health insurance for 2015. And the video looks at the latest existing-home sales numbers from NAR.

To view the video online, go HERE.


3. NAR Pushes for Credit-Scoring Alternative

Several real estate trade groups met on April 1 to discuss alternatives to traditional credit scoring. New models would incorporate public utility and rental housing payments, give less weight to unpaid medical bills, and eliminate the impact of missed payments on debts that have subsequently been paid off.

NAR President Chris Polychron said: “If lenders and the government-sponsored enterprises were to adopt alternative credit scoring methods, such as FICO 9 and VantageScore 3.0, they could expand access to mortgage credit without dramatically increasing risk in the housing market.”

NAR was a host of the event, which included two roundtable discussions and a keynote address from HUD Secretary Julian Castro. Castro said the FHA is exploring the use of new credit scoring models and that HUD will consider every option to help make housing more accessible.

To read more, and see a video clip from the meeting (if you wish), go to: http://www.realtor.org/node/12123/?


4. Are You TOO Busy, Busy, Busy?

Yes, there is such a thing as being TOO busy. So busy, in fact, that you’re never really present with your clients and customers! Leigh Brown (a successful North Carolina Realtor and past speaker at TAR events) makes this point in a good, 2-1/2 minute, advice-filled video on Inman News.

To view it online, go HERE.


5. Sales of Vacation Homes Soar

Vacation home sales boomed in 2014 to above their most recent peak level in 2006, while investment purchases fell for the fourth straight year, according to an annual survey of residential homebuyers released last week by the National Association of Realtors.

NAR’s 2015 Investment and Vacation Home Buyers Survey, covering existing- and new-home transactions in 2014, shows vacation-home sales catapulted to an estimated 1.13 million last year, the highest amount since NAR began the survey in 2003. Vacation sales were up 57.4 percent from 717,000 in 2013.

To read more, go HERE.


6. UPDATES on COURSES & EVENTS!

April 10: Power Negotiator’s Playbook (6 hrs. CE) – TAR Office, Nashville. Taught by Adorna Carroll, this new 1-day Course with 2 CRB credits is an interactive experience to help negotiators elevate their game! For more info or to register, go to: http://bit.ly/1xmfWAH

The first three classroom GRI courses of 2015 are coming up soon:

April 15 — GRI 401: Doing the Right Thing (6 hrs. CE)
April 16 — GRI 402: Staying in Business and Out of Court (6 hrs. CE)
April 17 — GRI 403: Working More Effectively with Buyers (6 hrs. CE)

Once again, the GRI EXPRESS option can be used to register for ALL THREE GRI courses in a given location …for a savings of $55! The complete 2015 Schedule of GRI courses — with links to registration for them — is posted on the TAR website at: http://tnrealtors.com/education/gri/

There are 10 good reasons to earn YOUR GRI! Just go to: https://vimeo.com/90565297

You can ALSO begin work toward your GRI designation ONLINE! To find out how, go to: http://tnrealtors.com/education/e-class-gri-information/

See all UPCOMING COURSES at: http://tnrealtors.com/education/


7. HOT LINE: Closing After Listing Expires?

QUESTION: There is a bilateral contract on a property that I had listed. My listing agreement has run out but the contract doesn’t close until the middle of next month. I have a seller that feels that she can work on her own to close this contract and not pay a commission. Does my listing agreement extend until closing?

ANSWER: You will need to look at your listing agreement to see if it automatically extends in the event that a purchase and sales agreement is executed. The TAR listing agreements do provide for this event. For example, lines 37-38 of TAR form RF 101 state:

“If a contract to purchase, exchange or lease is signed before this Agreement expires, the term hereof shall continue until final disposition of Purchase and Sale Agreement, exchange agreement, or lease agreement.”

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


8. HOT LINE: Can Lease/Purchase Still Be Marketed?

QUESTION: If a seller is involved in a lease/purchase agreement, do they have the legal right to still market the property?

ANSWER: A seller can always continue to market his property unless the contract states otherwise. Any additional offer would be considered as a possible back up offer. The question becomes whether the second offer can move into a primary position. This will depend upon the terms of the original lease/purchase agreement. If your seller has questions concerning this issue, he should speak with his own attorney.

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


9. HOT LINE: Is Earnest Money Required?

QUESTION: Is earnest money required when you submit an offer, or is it optional?

ANSWER: We haven’t answered this question in a long time.

Tenn. Code Ann. Section 47-50-103 states: “All contracts in writing signed by the party to be bound, or the party’s authorized agent and attorney, are prima facie evidence of a consideration.” Therefore, a written contract for the sale of real estate does not require earnest money for consideration of a contract. However, most sellers will require earnest money before agreeing to a contract.

There are some places in the U.S. — parts of Arkansas, for example — where earnest money is rarely required with an offer.

[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/