✔ Mourning the passing of our friend Emil Mongeon
✔ New website — tnrealtors.com — is built for you
✔ Legal & Ethics guidance on RESPA exceptions
✔ D.C.-bound in May? Sign up for Hill visits with TN legislators
✔ Insights from Rep. Mark Pody on working with REALTORS®
Remembering Emil Mongeon
**New Website — tnrealtors.com**
As part of our recent renaming and rebranding, today Tennessee REALTORS® has launched a new website at a new URL: www.tnrealtors.com
The same member services, features and resources you’ve always enjoyed remain available to you through this new site.
If you have feedback to share after exploring the site, please click “Contact Us” on the bottom of any page. Thank you.
Last-Minute Tax Tips for the Self-Employed
From our friends at the Internal Revenue Service, HERE are six quick, basic tips for self-employed taxpayers that might be useful to anyone who is still working to complete a return before this year’s Tuesday, April 18, filing deadline.
As a REALTOR®, you are part of a local, state and national organization that is committed to helping you succeed. On the state level, our membership has reached the highest level since before the economic downturn in 2008. During the past year, total membership rose from 22,673 to 24,336 (as of March 31), a 7% increase. We are grateful for the opportunity to serve our increasing number of members through transaction management, professional development, legislative and regulatory advocacy, and much more.
Get Invoice Pricing through Nissan / Infiniti Partnership
Tennessee REALTORS® has entered an agreement with Nissan Corp. to provide invoice or even below-invoice pricing on most new Nissan and Infiniti vehicles for members throughout Tennessee. To qualify, simply:
1. Visit www.InsideNissan.com (or your local Nissan dealer or Infiniti retailer*).
2. Click the “Business Associates” tile.
3. Enter your name and then VPP022208 in the VPP company code box.
4. Follow the instructions to get your claim certificate and savings on qualifying new vehicles.
*You must bring your NAR NRDS ID card as proof of eligibility. If you need to download and print your card, visit THIS LINK and follow the prompts.**
Filter Your Flow of Leads: Free Webinar 4/12
To have a successful real estate business, you need a consistent flow of leads. But how do you determine which are the best and most worthy to follow up? By creating a sales funnel. Alex Camelio of the Real Estate Technology Institute (RETI), a Tennessee REALTORS® partner, will lay out this concept during a FREE webinar 3 p.m. EDT/2 p.m. CDT this Wed., April 12: “Building a Real Estate Sales Funnel”. Register HERE.
Get Schooled on TransactionDesk — Wed., May 10
Tennessee REALTORS® will host TransactionDesk courses May 10 led by Brent Maybank, 3 hours of CE per course. Click the titles below to register (login required).
Wed., May 10 — TransactionDesk BASIC, 9 a.m.- Noon
With TransactionDesk ‘in the cloud’ you can access and manage all your real estate forms, contracts, documents and contracts from any computer with internet access—and always have your “virtual” real estate office with you. Bring your laptop and/or smart device!
Wed., May 10 — TransactionDesk ADVANCED, 1-4 p.m.
You’ve worked with TransactionDesk…now it’s time to take it to a higher level and learn about the integrated cloud service (DocBox), E-signatures (AuthentiSign), and E-faxing (InstaFax). Combine these features with filling out forms and transactions, and you’ve got a complete transaction-management solution. Designed for moderate to advanced users. Bring your laptop and/or tablet!
For more upcoming classes, log in to the portal HERE and look around.
Get in on SRES Course THIS WEEK
Sign up for the game-changing SRES (Senior Real Estate Specialist) designation course April 12-13 at Del Webb Spring Hill with instructor Monica Neubauer. The SRES course seeks to instill knowledge and understanding of, and empathy for, 50+ real estate clients and customers. You’ll develop business-building skills and resources needed for specialization in this market while earning continuing education credit. Register HERE. (Login required)
Working for You on Capitol Hill
As your statewide association, Tennessee REALTORS® is committed to working hand-in-hand with state legislators and the state government to protect the rights of property owners and strengthen the real estate industry.
In a current example of that commitment, we are working closely with Rep. Mark Pody, R-Lebanon, concerning a bill he introduced in the General Assembly. If passed into law, the bill (HB891) would exempt certain transactions by limited liability companies (LLCs) from the Tennessee Real Estate Broker License Act of 1973.
After becoming aware of the bill, our governmental affairs team, guided by the legal and advocacy efforts of Farrar & Bates, engaged Rep. Pody in conversation, seeking to ensure that the interests of REALTORS® are considered in the deliberative process. As a result, Rep. Pody agreed to place the bill essentially “on hold” to allow time to make certain it receives careful examination from those most affected.
Rep. Pody tells The Digest, “I want to thank the REALTORS® for being willing to look at this issue and work together throughout the coming summer to see if we can find something beneficial to all parties and best for all Tennesseans.”
Rep. Pody emphasizes that our REALTOR® leaders “have been very professional in bringing up issues that we need to look at, in a very respectful way. Russ Farrar and his team have been fantastic. They don’t just want to try to kill a bill, but to come up with a solution. Whenever any bill is introduced, it’s always important for the people most affected to have conversations with legislators. This helps us to work together, rather than as adversaries, to look at potential pitfalls, to overcome them, to make sure all parties are well represented.”
He also explains the impetus behind the bill: “Because of the ownership structure in which some businesses operate (LLCs), for tax reasons, they are stuck because of how the code is worded. We are trying to resolve this issue that makes it more difficult for some business owners to liquidate their property.”
In more technical terms, the Broker Act requires anyone carrying out a real estate transaction “to be licensed as a broker, affiliate broker, or time-share salesperson, as appropriate.” There are six specific exceptions to the licensure requirement and a general exemption for vacation lodging services. This bill would add one more: “a limited liability company acting through an officer duly authorized to engage in a real estate transaction, where the transaction occurs as an incident to the management, lease, sale, or other disposition of real estate owned by the company…”
Whatever the eventual outcome, the voices of REALTORS® will be heard and included in the process—and they already have. “We are in really good shape, with a great working relationship, to work toward a solution that protects Tennessee businesses, that protects real estate professionals, and that protects consumers buying real estate,” Rep. Pody says. “I am confident that we’ll accomplish that as we work together.”
We encourage you to get involved and let YOUR voice be heard. Learn more about this specific bill HERE. Locate and contact your state representatives and senators HERE. Learn how you can support RPAC and the REALTOR® Party HERE.
Sign Up for D.C. Hill Visits
If you are heading to Washington, D.C., in mid-May for the NAR’s 2017 REALTORS® Legislative Meetings and Trade Expo, be sure to sign up for our visits with members of Tennessee’s congressional delegation. You can choose to meet with your local U.S. representative, our U.S. senators, or a combination. Fill out the form HERE to get registered today.
The Real Estate Settlement Procedures Act (RESPA) was passed in 1974 and updated in 2010 to protect potential homeowners and enable them to become more intelligent consumers. RESPA requires lenders to provide more information to prospective borrowers at certain points in the loan-settlement process, and it prohibits the parties involved from paying kickbacks to each other.
Under RESPA, No person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person. 12 USC 2607(a)
A real estate settlement service is defined as: any service provided in connection with a real estate settlement including, but not limited to, the following: title searches, title examinations, the provision of title certificates, title insurance, services rendered by an attorney, the preparation of documents, property surveys, the rendering of credit reports or appraisals, pest and fungus inspections, services rendered by a real estate agent or broker, the origination of a federally related mortgage loan (including, but not limited to, the taking of loan applications, loan processing, and the underwriting and funding of loans), and the handling of the processing, and closing or settlement. 12 U.S.C. 2602(3)
Not every situation is covered under RESPA, and this week’s Q&As cover some of those circumstances…
Q: An agent referred a lender to his buyer on a commercial property via email and stated to the buyer, “This bank offers a referral fee of 1% to referring partners.” The lender and buyer have talked, and the buyer has submitted his loan application to lender. Can the agent accept a referral fee without violating RESPA?
A: Because the transaction is a commercial property, RESPA does not apply. Under 12 USC §2606, credit transactions primarily for business, commercial, or agricultural purposes are exempted from RESPA. Thererfore, based on the information in your question, it appears the agent could receive a referral from the lender in this transaction. Under the Broker’s Act, the agent is required to obtain written permission from the person being referred acknowledging that the agent will receive a referral fee and in what amount (TCA 62-13-403(7)(B)). The referral fee must be paid to the firm, which can then pay the agent.
Q: I wrote a contract for a client to purchase land through Farm Credit. Farm Credit is requesting the buyer use a different lender that they approve. Is this a RESPA violation?
A: Under RESPA, sellers are permitted to offer incentives to buyers to use their preferred lenders; however, they are NOT allowed to require them to use those lenders. Keep in mind that when a loan is made to purchase vacant land, and none of the proceeds of the loan will be used to construct a covered residential structure, the loan is exempt from RESPA oversight. Also, land tracts of 25 or more acres, whether there is a residence or not, are not covered by RESPA.
Referral Fees for Security Systems?
Q: After the closing of a property, ADT installs a security system and offers the real estate agent and the buyer gifts certificates of $200 and $100, respectively—is this a RESPA violation or okay to accept?
A: This would not be a RESPA violation because the alarm system company is not a real estate settlement service provider. The agent will need to disclose any referral fee to clients. Pursuant to Tenn. Code Ann. § 62-13-403(7)(B), a real estate agent owes a duty to all parties to:
Not recommend to any party to the transaction the use of services of another individual, organization or business entity in which the licensee has an interest or from whom the licensee may receive a referral fee or other compensation for the referral, other than referrals to other licensees to provide real estate services under the Tennessee Real Estate Broker License Act of 1973, without timely disclosing to the party who receives the referral, the licensee’s interest in such referral or the fact that a referral fee may be received.
An agent may use form RF 307, Referral for Service Disclosure, for this purpose.