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loan disclosure

The effective date of the TRID has been determined – October 3rd:

http://www.realtor.org/topics/trid-tila-respa-integrated-disclosure

The way some people are acting, you would think it was the end of the world.

The changes in loan disclosures were supposed to take effect sooner, but the mortgage industry pleaded for more time.  The lenders’ software needs to be changed and employees need to be re-trained, but once in place it looks pretty simple to me.

There will be two required forms:  a Loan Estimate that must be delivered or placed in the mail no later than the third business day after receiving the consumer’s application, and a Closing Disclosure that must be provided to the consumer at least three business days prior to consummation.

Lenders will have to be a little sharper about printing loan documents in a timely fashion. The companies that already have strong, organized clerks who can handle their desk and can print out loan docs will take it all in stride.  The lenders who don’t pay enough to get good clerks will struggle with these new timelines.  Get Good Help.

People are worried that buyer credits arranged late in the transaction could delay the closing, because the lender will have to re-issue the Closing Disclosure.  But credits negotiated during the 17-day inspection period still give the lenders another 13 days to close a regular sale.  If your lender is on their game, there shouldn’t be a problem.

But if buyer credits are a problem, what other alternative is there?

“AS-IS” Offers.

Let’s have the sellers supply a written inspection report to every buyer.  Have each buyer make an ‘as-is’ offer after reviewing the inspection and termite report, knowing the condition of the house.  Buyers might procure their own inspection reports later, but with good inspectors, the findings shouldn’t vary much.

How often does it happen where the buyers make a retail-priced offer thinking the house was in good condition (staged or otherwise), only to find out it needs a lot of work. It happens ALL THE TIME.  The sellers won’t do much for them, they are tired of the pursuit, and close the sale any way – and then spend $50,000 to $100,000 over the next 12 months to make it right.

At least if the buyers saw a decent inspection report before offering, they can say that they made a knowledgeable decision.

Handling the repair requests are a major part of a realtor’s job.  We would prefer sales to be ‘as-is’, so once we make a deal we can just head for closing.

With ‘as-is’ sales, we’ll only be one step away from auctions.

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