On October 3, new mortgage disclosures will be implemented, and the changes coming have prompted many real estate agents to extend sales contracts to build in more time for closings.
The new mortgage disclosure is called Truth in Lending Act/Real Estate Settlement Procedures Act integrated disclosures (TRID), and with it mortgages must be finalized and in the borrower’s hands three days prior to closing. Failure to meet the deadline can result in a re-issuance of the closing disclosure and another three-day waiting period.
In a survey by the National Association of Realtors, more than 50% of real estate agents plan to make sales contracts longer.
“When asked about their plans to deal with the new TRID rules, 55.9 percent of Realtors plan to change their purchase agreements to reflect a longer timeline, while 31.2 percent will add contingencies to the contract,” says NAR based on the research.
The survey did not ask how many days will be added to contracts, so both NAR and real estate agents are unsure of the exact change.
“Based on a handful of anecdotes, some (Realtors) are adding 15 days to a 30-day contract and others are opting for the 60-day contract,” says Ken Fears, NAR’s director of regional economics and housing finance.
Florida realtors will be updating contracts on September 28 in preparation for the big change on October 3. You can view the new changes online in redline version with the changes presented graphically.
82% of agents surveyed by the NAR also said that they have received additional training to prepare for TRID.
TRID is catalyzing changes to the process of buying a home with these contract extensions. If you have any questions about the changes coming up this fall, please contact one of our expert agents today who is happy to answer your questions.
As written yesterday, this September is THE time for YOU to buy your dream home in South Florida.