10-3-16 — Vol.: 2016 Iss.: 36 • Randy Durham, 2016 President • Phil Newman, TAR Digest Editor

✔  Legal & Ethics: are you keeping the right records the right way?
✔  Become an expert on TransactionDesk at our Oct. 18 classes
✔  Get tax-planning tips that can help you save thousands
✔  Help your clients with these home-upkeep tips

In the News
1. Brokers on the Sunny Side
2. To Potty or Not to Potty?
3. Upkeep Advice for Homeowners
Member Services
4. Tax-Saving Tips Keep $ In Your Pocket
5. RETI Webinar: Make Great Videos
Professional Development
6. TransactionDesk Classes 10/18 at TAR
Vote. Act. Invest.
7. FHA Proposes Condo-Rule Changes
Legal & Ethics Hot Line
Maintaining Proper Records
8. Which Records to Keep?
9. OK to Store Records Electronically?
10. Keeping Files Locked Up?
Key Links & Resources

1. Brokers on the Sunny Side
The new NAR 2016 Profile of Real Estate Firms finds that most firms have a positive outlook on future growth and profitability despite challenges such as tight inventory, price increases and lower sales volumes. Upshot: 91 percent of all firms expect their net income to increase or remain the same over the next year. Read the story about the survey HERE. View the survey HERE.

2. To Potty or Not to Potty?
Open House etiquette for homebuyers is sometimes a sticky subject. THIS HouseLogic blog answers five frequently posed questions: Can I use the bathroom? Is it OK to bring in my coffee? Can I peak in the closet? How about a quick selfie with this awesome, lemon-colored range? Can I plop down on that chaise lounge? Bottom line: “Be on your best behavior.” For more tips, read the blog HERE.
3. Upkeep Advice for Homeowners
THIS helpful blog covers eight maintenance tasks that all homeowners should tackle at least once a year, if applicable. They are:

  1. Salt your water softener.
  2. Test your well water.
  3. Update your disaster kit.
  4. Know your humidity.
  5. Check for termites.
  6. Take a photo.
  7. Save 1% of the home’s value.
  8. Create a donation pile. 

Read the details in the full article HERE.

4. Tax-Saving Tips Keep $ In Your Pocket
Learn why tax planning is so important and get tax-saving tips that will help you accumulate wealth via a free webinar from TAXBOT, a TAR partner, Thursday, Oct. 13, at 10 a.m. Central. Led by Sandy Botkin—a former IRS trainer, CPA, tax attorney, and author of Lower Your Taxes Big Time—the webinar will cover topics including:

  • How to deduct your meals and entertainment
  • Why hiring your kids or your spouse could save you big
  • Health Savings Accounts and how they work
  • Health Reimbursement Accounts and how you can legally write off 100% of your healthcare costs
  • How to legally deduct your home office furniture
  • How to get the equivalent of free gas for your vehicle
  • How to easily track your mileage and other expenses to stay tax compliant

To learn more and register, go HERE.

5. Free RETI Webinar: Make Great Videos
Here’s how to easily build a video interview, testimonial, commercial for a listing, condo building, neighborhood, etc. Craig Grant with the Real Estate Technology Institute (RETI), a TAR partner, is offering a FREE webinar at 3 p.m. EDT/2 p.m. CDT this Wednesday, Oct. 5: “Creating Great Videos Using WeVideo”. Register HERE.

6. TransactionDesk BASIC and ADVANCED: Tues., Oct. 18
With a NEW version of TransactionDesk right around the corner, now is an ideal time to sharpen your skills on the program to make transitioning to the new version—expected sometime during the first quarter of 2017—smooth and seamless. Join us at TAR in Nashville on Tuesday, Oct. 18, for TransactionDesk BASIC (9 a.m. to Noon) and/or ADVANCED (1-4 p.m.). Register for BASIC HERE. Register for ADVANCED HERE.

7. FHA Proposes Condo-Rule Changes
Last week the Federal Housing Administration (FHA) released a proposed rule on condominiums that includes positive changes, like a return of spot loans and an extension of the certification period. However, it also would set owner-occupancy rate requirements within a range of 25 percent to 75 percent—despite a 35 percent cap required by H.R. 3700, the “Housing Opportunity Through Modernization Act,” which passed earlier this year. NAR President Tom Salomone praised parts of the FHA proposal while expressing concerns about the possibility of an overly high owner-occupancy threshold. Read NAR’s statement HERE.

Legal & Ethics Hot Line
Source: TAR Legal & Ethics Hot Line Counsel

Maintaining Proper Records
A real estate firm must have a copy of all records, pursuant to Tenn. Code Ann. § 62-13-312(b)(6), which states that a licensee can be penalized for “Failing to preserve for three (3) years following its consummation records relating to any real estate transaction.” Although the Brokers’ Act requires that records be retained for only three years, it is a good business practice for licensees and firms to maintain their records for at least six years following the consummation of a transaction, because the statute of limitations for breach-of-contract actions is six years. If a former customer or client brings a cause of action against a licensee or a firm under a breach-of-contract theory, he/she has six years from the date of the breach to do so. Below are some other helpful hints on how to properly store all necessary records.

8. Which Records to Keep?

QUESTION: Is there a checklist that we can keep in each of our sales files to make sure we have all of the documents necessary in case of an audit?
ANSWER: TAR does not have a “checklist” for files. This is purely a matter for principal brokers to determine. However, here is a suggested list (although others may also be necessary or a good idea to maintain, depending on the transaction):
Listing Agreement or Buyer’s Representation Agreement
Property Condition Disclosure/Exemption/Disclaimer
Confirmation of Agency Status
Purchase and Sale Agreement
VA/FHA Addendum
Repair/Replacement Proposal
Repair/Replacement Amendment
Temporary Occupancy Agreement
Lead-based Paint Disclosure
Subsurface Sewage Disposal System Permit Disclosure
Earnest Money Disbursement and Release
Disclaimer Notice
Purchase and Sale Agreement checklist
According to TREC, these records must contain, at a minimum, the following: listings; offers (even those that do not become contracts); contracts; closing statements; agency agreements; agency-disclosure documents; property-disclosure forms; correspondence; notes; and any other relevant information. You also need copies of emails and text messages.

9. OK to Store Records Electronically?

QUESTION: Can we store our records electronically, or must we retain paper copies from every transaction?

ANSWER: You can keep these records electronically pursuant to TREC rules:
TREC Rule 1260-2-.40.Electronic Records
(1)       Pursuant to T.C.A. § 62-13-312(b)(6), real estate licensees must preserve records relating to any real estate transaction for three (3) years following the consummation of said real estate transaction.Real estate licensees may utilize electronic recordkeeping methods and comply with this requirement, provided that the following conditions are met:
(a)       All documents required to be retained must be readily accessible in an organized format providing ease in document identification within twenty-four (24) hours of any request for inspection by representatives of the Commission.
(b)       In order to ensure proper document retention, the principal broker of all real estate firms which use electronic recordkeeping methods must develop and utilize a retention schedule that safeguards the security, authenticity, and accuracy of the records for the entire required retention period and that also provides for the use of technology and hardware that ensures the accessibility of records in a readable format.
It is advisable that an agent keep a copy of their files for this long as well.Records do not have to be kept on site, but you must be able to access them within 24 hours of request.

10. Keeping Files Locked Up?

QUESTION: My broker files are in an unlocked office during work hours. Am I under any liability with my files and others’ access to them? Do I need to move these files to another locked area?
ANSWER: You will need to secure these files in such a way that people who should not have access to them cannot see them.This is part of the duty of confidentiality you owe to your clients.This can be in a locked file cabinet or in a locked office.

To check your CE hoursverify.tn.gov/default.aspx
For CE and other courses around TN: tarnet.com/education/
For online CE coursestarnet.com/education/?target=online-CE-courses/
To ask a TAR Legal and Ethics Hot Line questiontarnet.com/technology-support/legal-ethics-hotline/
TREC: tn.gov/commerce/section/real-estate-commission
TAR website: tarnet.com
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