TRID - Seller Side Implications

TRID - the impact to Seller side of the transaction

The new Federal guidelines are in effect now and we are beginning to see the impact to all parties. This article will focus on implications, changes and the reframing of mindsets that must occur to enjoy a thoughtful plan you can live with.

#1:  Longer time between ratification (all parties have agreed to in writing) and settlement.  We should plan on 60 days. Don't accept an offer with financing from anyone who says "our lender says we can do this in XX days". Simply can't happen.  We hope that as the dust settles we can move up to 45, however, for the remainder of 2015, let's stay with 60 days from ratification to settlement.

#2:  Longer time period for financing and appraisal contingencies. We should plan on 30 days as both sides work thru their new, or re-ordered steps in the process.

#3:  Buyer's pre-approval. By the new guidelines, will only offer 6 items of info on buyer - and is NOT what our normal standard of practice has been here in Virginia.  No verification of income will have taken place. This is to allow the buyer time to shop for best terms and rates AFTER ratification!! This is backwards from how most of us worked with buyers. We wanted to ensure sellers that we have viable pre-approved buyers in their homes and this is a setback. Nothing we can do about it - this process is deemed to protect the buyer from unscrupulous agents and lenders who might lock buyers into terms that were not competitive. The buyer unfortunately, can now shop for their loan AFTER ratification. The contract still says that formal loan application MUST take place within 7 days, so at least only a week can be spent shopping for a loan.

#4:  Highly recommend 3 day post-occupancy (some call this a "rent-back" and it is NOT RENT!) should your home be occupied.  And #5 explains why:

#5:  ALL final documents are now created by the bank - not the settlement company! This again is to protect the buyer from last minute fees. Should a last minute adjustment need to take place, the lender can determine settlement should be delayed by a 3 business day period (including Saturday - not Sunday or holidays). As the seller, you don't want your furnishings on a moving truck and have settlement delayed  while you are empty-handed of bedding, clothing, food, etc.

#6:  Once home inspection contingency has been agreed upon, ANY work must be performed immediately so that invoices can be reviewed, and final walk-thru take place PRIOR to the 3 day period immediately preceding settlement.

Think of it this way, you are to have your house ready to go to settlement at a minimum of 3 days in advance of settlement.  We know most of you will still be in the house and packing, but right now , this is the scenario. It will take some getting used to and a lot of communication between the 2 of us, but we can get through like many other changes over the years.  Knowledge is Key!