6-13-16 — Vol.: 2016 Iss.: 22 • Randy Durham, 2016 President • Phil Newman, TAR Digest Editor
TAR TAKEAWAYS ✔ TN home sales/prices rise 5%, inventory drops 28% in May ✔ Boo!—what if that new listing is a haunted house? ✔ Laugh with a top “thought leader” and his biting parody ✔ How to shine up your ride with REALTOR® pride
CONTENTS In the News
1. TN Sales/Prices Up, Inventory Down
2. A Thought Leader’s (Hilarious) Wisdom Member Services
3. REALTORS® Federal Credit Union
4. Ride with REALTOR® Pride
5. Excess E&O Discount for Firms
6. RCS-D: Help Clients In Tough Times
7. Referral Tip: Business Partnerships Legal & Ethics Hot Line
8. Adverse Facts: Meth Houses?
9. Adverse Facts: Cemeteries?
10. Adverse Facts: ‘Haunted’ Houses? Key Links & Resources
**Register for Fall Convention!**
1. TN Sales/Prices Up, Inventory Down in May Tennessee single-family home sales rose 5 percent in May 2016 over the previous May (from 6,821 to 7,163), while the median price rose 5.4 percent (from $185,000 to $195,000), and inventory dropped 28.2 percent (from 33,110 to 23,781), according to numbers compiled by TAR. Meanwhile, condominium sales held steady (672 vs. 671) and the median condo price rose 10 percent (from $150,000 to $165,000), while condo inventory dropped by 38 percent (from 2,785 to 1,728).
In both categories, a continuing squeeze in inventory helped to boost median prices statewide. Year to date (Jan.-May), Tennessee home sales were up 7.5 percent, and the median price rose 7.3 percent over the same period in 2015.
“Buoyed by a strong economy and Tennessee’s continuing popularity as a destination for businesses and new residents, sales and median prices remain on the rise while the number of homes available for purchase has tightened,” said Chattanooga broker and TAR President Randy Durham. “Weighing all factors, especially the growth mindset and vibrancy we see in everycorner of the state, this remains an excellent time to buy or sell a home in Tennessee.”A breakdown of May’s numbers by the state’s three Grand Divisions (West, Middle and East) illustrates each region’s distinctiveness. For example: Single-family home sales grew the most in East Tennessee; they were +10.2% in East (from 1,888 to 2,081), +3.3% in West (from 1,306 to 1,349), and +2.9% in Middle (from 3,627 to 3,733). The median price of a single-family home grew the most in Middle Tennessee; it was +6.4% in Middle (from $211,900 to $225,500), +5.8% in East (from $165,268 to $174,900), and +2.7% in West (from $146,000 to $149,900). Inventory of single-family homes dropped the most in Middle Tennessee; it was -34.3% in Middle (from 14,035 to 9,214), -25.3% in East (from 12,533 to 9,361), and -20.4% in West (from 6,542 to 5,206).
2. ‘Thought Leader’ Shares (Hilarious) Wisdom
Sometimes the way we communicate with clients, associates and others is as powerful as what we actually say—or even more powerful.
3.REALTORS® Federal Credit Union The many benefits available to TAR members include financial services from REALTORS® Federal Credit Union, a division of Northwest Federal Credit Union and a partner with NAR’s REALTOR® Benefits program. RFCU offers personal and business banking (savings/checking), credit cards, vehicle loans and more. For details,visit this link. For more TAR member services,go here. (login required)
4. Ride with REALTOR® Pride Next time you renew your vehicle registration, be sure to order the “Celebrate Homeownership” REALTOR® license plate from your County Clerk’s office. Just show your membership card**, which includes your NRDS ID# and proof that you’re a REALTOR®. NOTE: It’s a requirement to show your membership card to confirm your status and quality to purchase the plate. **If you need a membership card, visitthis link to download a PDF and/or print the card.
5. Excess E&O Discount for Firms Rice Insurance Services, which administrates Tennessee’s Errors & Omissions (E&O) group program, offers a 5 percent discount for firms purchasing higher limits pursuant to excess E&O policies, if those offices utilize Tennessee forms. The excess coverage is for firms that desire policy limits higher than those provided by the group program’s coverage. (This offer is available only to firms/offices, not to individuals.) Any firms that would like to apply for excess coverage may contact Rice at (502) 897-1876, ext. 107; (800) 637-7319, ext. 107; or email to .
6. RCS-D: Help Clients Navigate Tough Times There’s still time to sign up for next week’s RCS-D designation course (Real Estate Collaboration Specialist–Divorce), June 20 and 21 at TAR. Taught by Kelly Murray, J.D., a Vanderbilt law professor, licensed REALTOR® and instructor, the course will equip you to work with divorce and elder-care clients, and their attorneys, throughout the property buying/selling process. It’s a perfect opportunity to help clients navigate these challenging seasons of life. To learn more and register, visit this link (login required).
7. Referral Tip: Business Partnerships From our friends at the Real Estate Buyer’s Agent Council (REBAC, an NAR subsidiary), here’s a note about leveraging referral partnerships:
“Local businesses regularly interact with customers who may be preparing to buy or sell a home. Wouldn’t it be great if your name was top-of-mind when those conversations occurred? You can certainly improve your odds by reaching out to various businesses and exploring referral partnerships. Here are several steps to consider as you seek to cultivate local business referrals:
Post referral partnerships on your website (in a section called Local Resources), including links to your partners’ sites and/or other contact details.
Create a series of blog (or vlog) posts, each featuring a local business partner.
Publish a directory of your referral partners, including a description of each business’ services, plus a logo and/or photo. Give it to your own clients, post it on your site, and share copies with your business partners so they can also distribute your directory to their customers.”
Look for more insights from REBAC in future editions of the Digest.
Source: TAR Legal & Ethics Hot Line Counsel
Adverse Facts: What Must an Agent Disclose? Pursuant to Tennessee Code Annotated § 62-13-403(2), a real estate agent is required to “[d]isclose to each party to the transaction any adverse facts of which the licensee has actual notice or knowledge.” Tennessee law defines adverse facts as “conditions or occurrences generally recognized by competent licensees that have a negative impact on the value of the real estate, significantly reduce the structural integrity of improvements to real property or present a significant health risk to occupants of the property.” Tenn. Code Ann. § 62-13-102(2).
8. Adverse Facts: Meth Houses?
QUESTION: My client purchased a house that was foreclosed on because it was used to produce meth. He followed proper procedures, had the proper authorities mitigate the house, and was issued a certification of clearance. He then spent a large sum of money remodeling the house and is now ready to put it on the market. Must I disclose that the house was once used for the production of meth?
ANSWER: Yes, a licensee should disclose this information. The presence of meth on the property would constitute an adverse fact as it would pose a significant health risk to the occupants of the property. Any location in which a methamphetamine lab is found is considered to be a hazardous-materials site. The potential risk to subsequent occupants is justification for disclosing this known fact since it would have an effect on the physical environment of the real property. I would recommend that any disclosure be made in writing and acknowledged in writing by the potential buyer before any offer is considered. When disclosing, you can indicate what you know has been done to clean up the property. You should also point toward sources that could provide more information about the property’s connection to illegal drugs, such as the Tennessee Bureau of Investigation (www.tn.gov/tbi), the local police department, the county register of deeds’ office, and/or the Tennessee Department of Environment and Conservation (www.tn.gov/environment).
9. Adverse Facts: Cemeteries?QUESTION: There is an old grave behind the house on a property I have listed; do I need to disclose that?
ANSWER: I would consider this to be an adverse fact under the law, not necessarily from the standpoint that there is something damaged about the property, but that there are certain responsibilities which are associated with having a cemetery on the property. The families of the people buried in the cemetery have certain rights of access to the cemetery itself; they are entitled to be able to come and visit and pay their respects to their relatives who are buried there. In addition, there are restrictions as to what can legally be done with the property of the cemetery itself. This could potentially have a negative impact on the value of that part of the property. Therefore, if the seller does not disclose this, the licensee should.
10. Adverse Facts: ‘Haunted’ Houses?QUESTION: Do I have to disclose if my seller thinks the house is haunted?
ANSWER: Pursuant to Tenn. Code Ann. §66-5-207, a licensee is not required to volunteer whether or not a house is perceived to be “haunted”:
Notwithstanding any of the provisions of this part, or any other statute or regulation, no cause of action shall arise against an owner or a real estate licensee for failure to disclose that an occupant of the subject real property, whether or not such real property is subject to this part, was afflicted with human immunodeficiency virus (HIV) or other disease which has been determined by medical evidence to be highly unlikely to be transmitted through the occupancy of a dwelling place, or that the real property was the site of: 1. An act or occurrence which had no effect on the physical structure of the real property, its physical environment or the improvements located thereon; or 2. A homicide, felony or suicide.
In this case, the seller’s belief that the house is haunted has no effect on the physical structure of the property.