8-15-16 Vol.: 2016 Iss.: 30 • Randy Durham, 2016 President • Phil Newman, TAR Digest Editor

TAR TAKEAWAYS
See who’s leading—and joining—the TN Real Estate Commission
Help for brokers transferring transactions to former agents
Are you in good shape on your home-office deduction?
Get tips for making your MLS photos even better
 
CONTENTS
In the News
1. TREC: Chair, Vice Chair, New Member
2. Alert: Tax-Scam Robo Calls
3.
NPR: Inventory Squeezing 1st-Timers 
Member Services
4. Home-Office Deduction: The Big Lie
5. TransactionDesk Tip for Brokers
6. RETI Webinar: Picture Perfection
Professional Development
7. Convention Line-up Adds FB, Google
Legal & Ethics Hot Line
Earnest/Trust Money—Part II
8. Using $ for a Different Transaction?

9. Check Payable to Closing Attorney?
10. Non-Licensee Holding Funds?
Key Links & Resources

**Register for Fall Convention!**

 
 

1. TREC: Chair, Vice Chair, New Member
Congratulations to John Griess of Knoxville, re-elected Chairman of the Tennessee Real Estate Commission (TREC); to Austin McMullen of Nashville, elected Vice Chairman of the Commission; and to Rick Douglass of Bartlett, welcomed as the Commission’s newest member, all at last week’s TREC meeting. *Look for a profile article on Rick in next Monday’s edition of the TAR Digest.*

2. Alert: Tax-Scam Robo Calls
Even though it’s not officially “tax season,” here’s a timely word of caution for all of us: Nefarious robo-calls are on the rise by scammers leaving urgent requests for taxpayers to call back and settle their “tax bill” or risk legal action. In a new trend, scam artists are demanding bogus tax payments owed on iTunes and other gift cards. Other fake claims to watch for include:

— Demanding payment for a “Federal Student Tax”
— “Verifying” tax-return details over the phone
— Pretending to be from the tax-preparation industry
— Soliciting W-2 info from payroll and HR professionals 

The IRS urges anyone receiving such a call to hang up immediately and report it at THIS LINK or by calling (800) 829-1040.
 

3. NPR: Inventory Squeezing 1st-Timers
This National Public Radio story (which aired on All Things Considered) examines the question, “Fewer Young People Buying Houses, But Why?” The upshot: ever-tightening inventory. There’s a Tennessee connection: the millennial interviewed for the story moved to Nashville a year ago. Also quoted, among other experts, is NAR Chief Economist Lawrence Yun, saying that young people are squeezed from both sides…rents are increasing even faster than home prices…[and] city politicians aren’t making it easy for developers to build condominiums that would be good starter homes. “We are creating this divide because of the ongoing housing shortage,” Yun says. Read and/or listen to the whole story HERE.
 

 

4. Home-Office Deduction: The Big Lie
Taxbot, a TAR partner, tackles home-office deductions in its latest blog, “The Strange Lie You’ve Likely Heard About Claiming a Home Office Deduction”. Upshot: The myth is that claiming such a deduction increases your chances of an audit. The news isn’t so dire. Read all about it HERE.

5. TransactionDesk Tip for Brokers
We periodically share tips to help you navigate TransactionDesk, including step-by-step tutorials featuring our own Buzz Steele, RCE. This week (for Managing Brokers):
 

How to Transfer Transactions to a Former Agent

As a Managing Broker, you will receive transaction-transfer notifications when an agent leaves your firm for another. That agent’s transactions will automatically transfer to you, the Managing Broker. Now you can transfer any or all transactions back to the former agent. Using the new version of TransactionDesk, you’ll find this feature in the Broker Tools section. Please view the brief screencast HERE to see how it works.
 
NOTE: Agents, it is a good idea to talk to your Managing Broker prior to leaving the firm and negotiate which transactions you’ll take with you (if any). This is at the Managing Broker’s discretion. 

6. Free RETI Webinar: Picture Perfection
Great pictures often sell a property. To help you get that stellar shot every time, the Real Estate Technology Institute (RETI), a TAR partner, will offer a FREE webinar at 3 p.m. EDT/2 p.m.CDT this Wednesday, Aug. 17: “Picture Perfect: MLS Photos #win or #fail,” led by listing-marketing expert Amy Smythe-Harris. Register HERE.

7. Convention Line-up Adds Facebook, Google
The stellar slate of guest speakers and presenters for our 2016 Fall Convention now includes key leaders from Facebook and Google sharing timely and practical tech insights. Experience the Great Blue and VentureIN with us Sept. 14, 15 and 16, at the Charleston (S.C.) Marriott.

Reserve your place HERE. View the entire CE/speaker schedule HEREAdvance registration ends on Sept. 1, so don’t delay!

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

Earnest/Trust Money—Part II
Last week we discussed disbursement of earnest and trust money. Being entrusted with these funds doesnot end (or begin) with disbursement. Other issues a REALTOR® may encounter when holding earnest/trust money include transferring funds from one transaction to another, to whom the disbursement check should be payable, and whether someone other than a real estate licensee may hold such funds.

8. Using $ for a Different Transaction?

QUESTION: I am a buyer’s agent and had a contract on a house. The deal didn’t work out, and we have an earnest-money release signed by both the buyer and seller. We have another property we are working on, and the buyer wishes to simply transfer the currently held earnest money to the new property. Is this legal?
 
ANSWER: Yes, this is possible. First, you should make certain that all of the documents have been properly drawn up demonstrating that the earnest / trust money from the initial transaction is to be distributed to the buyer. Next, you need to have the buyer instruct you, in writing, to retain the funds within your earnest-money account until they enter into another purchase and sale agreement, or until the end of the buyer’s representation agreement, or until instructed otherwise in writing by the buyer.

9. Check Payable to Closing Attorney?

QUESTION: I was at a recent closing where the closing attorney told me in the future to make earnest / trust money checks out to his law firm, instead of to the buyer. Is this permissible?
 
ANSWER: Generally speaking, it is advisable to have any check made payable to either the buyer or the seller. If the transaction is closing, then it would be permissible to make it payable to the closing attorney.

10. Non-Licensee Holding Funds?

QUESTION: I believe it is legal for a title company to hold earnest / trust money, but another agent does not agree. Which is correct?
 
ANSWER: There are no specific state statutes concerning who can hold this money. It can be held by a third party, or even by one of the parties to a transaction. That said, it is most common for a real estate agent, a title company, or an attorney to hold the funds. This is because there are statutes and rules governing each of those professionals that provide security to the parties and confidence that their money is safe. More real estate companies are moving toward having a title company or closing attorney hold the funds so that they do not bear this responsibility. If a Broker chooses to hold the earnest money, then they must follow TCA § 62-13-321, TCA § 62-13-312(b)(5), and TREC Rule 1260-2-.09.

KEY LINKS & RESOURCES
To check your CE hours:verify.tn.gov/default.aspx
For CE and other courses around TN: tarnet.com/education/
For online CE courses: tarnet.com/education/?target=online-CE-courses/
To ask a TAR Legal and Ethics Hot Line question: tarnet.com/technology-support/legal-ethics-hotline/
TREC: tn.gov/commerce/section/real-estate-commission
TAR website: tarnet.com
TAR on Twitter: twitter.com/tnaor
TAR on LinkedIn: linkedin.com/groups?gid=852077&trk=hb_side_g
TAR on Facebook: facebook.com/pages/Nashville-TN/Tennessee-Association-of-RealtorsR/15041383689

2016 TAR Fall Convention 
Sept. 14, 15 and 16

 Watch the PREVIEW VIDEO
REGISTER HERE

**Advanced Registration Deadline Sept. 1**

#GreatBlue

Follow TAR on Twitter or Like our page on Facebook.

01-23-2017

1-23-17 Vol.: 2017 Iss.: 3 • Brian Copeland, 2017 President • Phil Newman, TAR Digest Editor

TAKEAWAYS:
  Tips for helping clients (and yourself) de-clutter closets
  Try these 20 top apps for real estate
  Are your commission rates in line with antitrust laws?
 Earn 9 hours of CE in Cool Springs (March 27 & 28)
CONTENTS
In the News
1. Not-so-Tiny House Costs
2. What’s in Your Closet?
Member Services
3. ICYMI: 2017 Forms Updates
4. Countdown: 1 Month!
5. 20 Top Apps: Free Webinar 

Professional Development
6. Get Schooled on Land Consulting
7. ‘Press Play’ for 9 Hours of CE
Legal & Ethics Hot Line
Setting Commission Rates
8. Minimum Rate Within Firm?
9. Advertise a Commission Rate?
10. Publish Commission Splits?

Key Links & Resources

1. Not-so-Tiny House Costs
Tiny Houses continue to attract attention ranging from mild curiosity among TV viewers to serious downsizers who compress their lives into miniaturized, often mobile dwellings. Part of the appeal is saving $, but the price can add up, asTHIS realtor.com blog points out: “Typically, the cost to build a tiny home ranges from $20,000 for simple models to $140,000-plus for more complex luxury models. And that’s just the beginning.” Additional costs include appliances, décor, land, foundation, sanitation, transport, and more. Get the whole story HERE.

2. What’s in Your Closet?
January is a popular month for de-cluttering after the holidays. In THIS helpful article, Julie Ryan Evans offers ideas for clearing out closets by parting with extra or outdated goods, such as: store bags; towels, sheets, pillowcases; clothes you haven’t worn in a year; threadbare shoes; duds you’re waiting to fit and/or come back in style; wire coat hangers (no more!); promotional T-shirts; lonely socks; anything with a stain (ew!); and special-occasion items, and more. Read it HERE.

3. ICYMI: 2017 Forms Update
As a reminder, the many updates to our 2017 forms are explained in THIS VIDEO starring Bobbie Noreen, Residential Forms Committee Chair, and in THIS PDF that accompanies the video. The video includes a timeline reference to skip ahead or back to certain forms. Also, the comprehensive changes file for ALL forms is available on our “Forms on the Fly” page, and the NEW TransactionDesk includes many topic-based “How To” videos; go HERE for a brief screencast on how to use them.
 
4. Countdown: 1 Month!
Between now and the end of February, TransactionDesk is showing a splash screen with information on the new system, links to webinars, etc. Users are automatically logged into the new system but can switch
back to the old. **Use this time to learn the NEW TransactionDesk.** As of FEBRUARY 28, only the new system will be available; the old will be turned off! NOTE: All data has been replicated, so there are no lost data, documents or forms. You don’t have to do anything—except start using the new system!

5. Top 20 Apps: Free Webinar
With MILLIONS of apps, how to cut through the clutter and find the most helpful tools for your business? The Real Estate Technology Institute (RETI), a TAR partner, will offer a FREE webinar at 3 p.m. EDT/2 p.m. CDT Wed., Jan. 25: “The Top 20 Apps for Real Estate”, led by Craig Grant. Register HERE.

6. Get Schooled on Land Consulting
If becoming an Accredited Land Consultant (ALC) is on your list, here’s an opportunity to hear from top ALCs in a FREE webinar covering the most efficient path to fulfilling the ALC requirements and instruction on how to create your portfolio, presented by Brandon Rogillio, 2017 RLI President; Flo Sayre, 2017 ALC Designation Committee Chair; and George Clift, RLI Past President. All three will be available to answer questions. Register HERE.
 

7. Press Play’ for 9 Hours of CE
We continue to feature aspects of our Spring Conference, March 27 & 28. This week: an update on CE: We will offer 20 total hours of continuing education (pending TREC approval) in three concurrent tracks. This means you can earn up to 9 hours of CE as you select sessions from among the tracks. Go HERE to register at the Early Bird rate and to book your lodging.

Legal & Ethics Hot Line
Source: TAR Legal & Ethics Hot Line Counsel
Setting Commission Rates
The most important thing to remember when entering into agreements with clients is that commission rates are negotiable between the firm and the client. This week’s Q&As provide tips on how to avoid violating antitrust laws when setting commission rates.

8. Minimum Commission Rate Within Firm?

Q: With regard to antitrust laws, I want to put in the independent contractor agreements with my agents that our agents charge a minimum of 6% of the sales price. Is this considered price setting?
 
A:
It is strongly recommended that a REALTOR® have an attorney assist in drafting independent contractor agreements. That way, this and other issues are addressed properly to ensure compliance with the law and that the agents are in fact independent contractors, not employees. Remember that commissions are negotiable between the firm and the client. A principal broker would be within the law to set a minimum amount for the commission charged to clients within their firm. However, a lower commission could be set with the approval of the broker; this would alleviate any question of legality.

9. Advertise a Commission Rate?
 
Q: Can a licensee advertise what they will charge for commission compared to other licensees in the area?
 
A:
Agents are permitted to advertise what theywill charge for commissions, without violating antitrust laws. It gets more complicated and risky if they compare themselves with others. For that reason, an agent should not compare their rate to others nor include any reference to “most brokers” in advertisements, agreements, or discussions. Also, NAR recommends that REALTORS® not keep preprinted forms with commission rates on them, as this could be seen as a violation of antitrust laws. For additional information on RESPA, refer to NAR’s Anti-Trust Compliance Guide for Realtors® and Realtor-Associate®s, which contains a lot of great information, at www.realtor.org.

10. Publish Commission Splits?

Q: Can a broker/office publish their commission levels/splits that they pay agents, either on a website or via emails directed to REALTORS®?
 
A:
The NAR antitrust handbook does not prohibit the advertisement of a REALTOR®’s commission rate. It is recommended the REALTOR® follow these guidelines:

  1. The commission rate be based upon the cost of the services the agent provides, the value of these services to its clients, and competitive market conditions.
  2. The commission rate cannot be determined by agreement with, or recommendation or suggestion from, any person not a party to a listing agreement with the firm.
  3. The agent shall not participate in any discussion with any person affiliated with, or employed by, any other real estate firm concerning the commission rates charged by the agent’s firm, or any other real estate firm in the community.
  4. When soliciting a listing, no agent shall make any reference to a “prevailing” commission in the community, the “going rate,” or any other words or phrases which may suggest that commission rates are uniform or standard in the marketing area.

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