DC REAL ESTATE SELLERS & TRID

HOW TRID IMPACTS WASHINGTON DC HOME SELLERS

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DC Real Estate Sellers TRID

On October. 1, 2015. TRID (TILA-RESPA Integrated Disclosure) replaced the HUD-1 Settlement and Good Faith Estimate. The change was a result of the Consumer Financial Protection Bureau’s aim to ensure the mortgage industry will not repeat behaviors that led to the Great Recession in the early 2000’s. CFPB is the new oversight agency for the industry, replacing the Department of Housing and Urban Development. The CFPB (Consumer Financial Protection Bureau) created a new real estate mortgage closing disclosure form that combines TILA and RESPA disclosures for borrowers. The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act prompted a single, unified form for loan applicants; a Loan Estimate and a single form for buyers settlement document called the Closing Disclosure that satisfy TILA and RESPA requirements. CFPB changes to RESPA and the Truth in Lending Act (TILA) under the Dodd-Frank Wall Street Reform and Consumer Protection Act combines the GFE with the TIIA disclosure now called the Loan Estimate (LE) and the HUD-1 settlement statement with the final TIL, now called the Closing Disclosure (CD).
You’re selling a DC home, not applying for a mortgage loan. Why should you care? Simple answer: TRID was a game-changer and what affects buyers, affects you.

FAQ: What Sellers should know about TRID

Closing Dates

TRID has extended the escrow period to 40-45 days minimum. We may see that cycle shorten over time, as lenders and title companies learn how to implement the changes, become more adept at processing and as software catches up with the form changes. But for now, longer escrows will be required for financed purchases. Keep this in mind while reviewing offers. Now, more than ever, cash is king.

Under TRID, settlement can’t take place until the 3rd business day after final loan approval and the buyer’s acknowledgement of the CD.

Last-minute changes are a thing of the past, so if buyers lag in providing lenders with documentation or information, if the lender makes an error, or if the buyer has a “changed circumstance,” settlement will be delayed.

However, most settlement issues, such as adjustments to seller credits to account for repairs, that were previously addressed as late as the day of closing can continue to be handled at closing without requiring a new three-business-day review period.

How to prepare
  1. Factor these considerations into your contract and plan for delays. Vet your buyer carefully and his/her lender as well.
  2. Are you still occupying your home for sale? Discuss last-minute changes with your mover when you book the service. What will they charge to store your belongings in the event of a delay? Can the moving date be easily changed? A back-up date booked in advance? Scout temporary housing and its cost.
  3. Avoid high-risk closing dates and times. Your agent may advise you to set closing dates for mid-month and mid-week to avoid the busier schedules of title companies and lenders, and to provide a “cushion” if a new 3 day review period is set. Tuesdays, mid-month are ideal!
  4. Contract terms for your purchase are key. If you’re purchasing a home as well as selling one, TRID will affect you in both transactions. Be sure to cover yourself in both contracts. Ask your agent how!
  5. Be proactive! Provide all requested information/documentation without delay so the lender has time to process and request additional items, if needed.

Inspection Issues

Mortgage underwriters are likely to require pre-settlement repairs if the appraisal comes back with roof or other structural issues noted, including pest damage from termites or other wood-boring insects. This can lead to appraisal contingency and financing problems and settlement delays even if the seller credits the home buyer in lieu of repairs.

If a contract is written ‘as is,’ whether or not the buyer has a financing contingency, repairs can become a seller issue if the buyer hasn’t the funds to complete required repairs prior to the closing date and can’t receive loan approval.

If repairs are to be completed by the seller, this should be accomplished early in the escrow period, with documentation going to the lender as quickly as it is received in order to avoid loan delays.

Expect home buyers to start using itemized inspection contingencies again, rather than the ‘walk-away’ contingencies that replaced them when the market turned in favor of sellers. Bidding war-inspired offers without inspection contingencies are likely to become a thing of the past with TRID due to lending issues, unless buyers are paying cash.

How to prepare
  1. More than ever before, it is important to carefully assess buyers’ financials when they are financing a purchase. Do they have the finds for any required significant repairs such as roof or structural items in addition to their downpayment and closing costs? A pre-approval won’t tell you. Require a Financial Information Statement from all buyers.
  2. Credit in lieu of repair. Closing cost credits can provide buyers with the necessary funds for required repairs and eliminate the necessity for a second (or third) inspection, which can delay settlement. Keep in mind that a closing credit will effectively lower the price of your home, but you’ll pay transfer tax and capital gains on the full price. Factor this into your initial price negotiations with buyers you haven’t performed pre-listing inspections and associated repairs.
  3. Be proactive! Previously, many agents didn’t recommend pre-sale inspections, but TRID has brought this practice back. Know in advance what can come back on an inspection report and make those repairs prior to listing. Any significant repairs not made in advance of a mechanical and/or structural nature should be disclosed prior to contract. Keep inspection contingency periods short. Provide all associated information/documentation quickly.

SELLING DC REAL ESTATE?

Choosing the right Realtor

Selection of the agent representing your property is crucial to success. Your agent will apply market knowledge, strategies, experience and skills towards making your DC real estate transaction the most successful possible. With nearly 25 combined years of experience in residential real estate, consistently as top producers, The Isaacs Team’s expertise and reputation are well established. Outstanding service is our hallmark so we first pose the question, “What’s important to you?” Let’s meet and talk it over.

The Isaacs Team at Evers & Company

Experience
We have the experience and expertise to help make your real estate transaction the most profitable.
Market IQ
Thanks to a large buyer base, we know DC's neighborhoods & buyer preferences
$$$
Pricing mistakes can cost you. We're great pricing strategists. Check the records.
Why work with The Isaacs Team? Our clients will tell you!
Susan and Alex are superstar agents. There is no one else I’d want on my side of a real estate transaction. My wife and I first met Susan in 2010 when she helped us buy our first home, a condo. We were so impressed by her deep local knowledge, tenacious negotiating, 24/7 efforts on our behalf, and clear guidance on the home-buying process that we didn’t consider going with anyone else when we decided to buy a 3-BR in our dream neighborhood. We were not disappointed. After a few weeks, we found the perfect house at the perfect listing price. We knew it would be competitive, but Susan and Alex provided expert advice on how to make the offer, and in the end, we provided terms just attractive enough to end the process in our favor, but no higher than final appraisal and just above what their agent later admitted was their line. They also did a fabulous job of staging and selling our condo, which netted $30K over selling price after six strong offers during just two-days of being on the market. They get amazing results and are a blast to work with. 
Susan responded immediately and impressed me with her patience and almost supernatural ability to find the perfect place for me despite some significant constraints (time, location, finances). I was not an easy case, but she never made me feel like I was a ‘burden’ or ‘not her first priority’. Above all, she treated me with respect and honesty.
In today’s market in this area, you cannot rely on luck to get you that perfect place or a great deal – you need to have an agent who knows the market cold, is aggressive, and effective – Susan is all of those things and more.
Susan is knowledgeable, friendly and very responsive–she got back to us immediately to answer any of our questions at any hour. Even as first-time homebuyers who could be somewhat indecisive at times, she understood what we were looking for in a home, didn’t hesitate to answer our questions and always had our best interests in mind. Her warm, welcoming attitude and confident guidance really took the stress out of a process that, before we met Susan, we had assumed would be overwhelming and beyond our reach.
It would not be an exaggeration to say that Susan did the work of both the buyer’s and seller’s agent, spotting and solving problems using a powerful combination of intuition and experience. She brought her impressive professional network to bear on one problem to such great effect that the buyer’s lender gave me–the seller–a closing cost credit. When does that ever happen? 
Susan not only worked hard to help my wife and me find the perfect place, she was a dogged (and effective) negotiator on our behalf once we zeroed-in. She knows the market and knows the area, but best of all she knows how to play hardball and get things done—exactly what we needed in an agent.
Susan was an invaluable part of my new home purchase from beginning to end. She quickly understood what I liked, previewed properties and showed me homes that fit our criteria. She made herself extremely available through the process and worked with us through every aspect of the transaction. Susan was so much fun as an agent that she took the anxiety out of the home buying process. I would work with Susan again in a heartbeat.
We expected an extremely stressful experience when we decided to sell our home of over 25 years and buy a condo, especially because we live nearly 3000 miles away, yet the Isaacs Team was beyond exceptional in their competent guidance, attention to detail, follow through, and simply doing what they said they would do. While other realtors said, "this is what you need to do;" this team said, "we can do this for you!" Our process was smooth and quick, and they designed a strategy and negotiated a sale well above our asking price; and a purchase price below asking - both in the same market. They are also a pleasure to work with in every respect. Please know that you can turn this difficult personal event over to true professionals and emerge with happy results and fast friends. We highly recommend this team in every regard.
In today’s market in this area, you cannot rely on luck to get you that perfect place or a great deal – you need to have an agent who knows the market cold, is aggressive, and effective – Susan is all of those things and more.
When a property popped up in a neighborhood that she and I had scouted, Susan was there within the hour and insisted it was worth us leaving work to check out. If we had a less responsive Realtor, I am convinced that we would not have our amazing house now. Susan’s advice is invaluable. You need a Realtor that knows her stuff. And Susan does!
Susan and Alex are superstar agents. There is no one else I’d want on my side of a real estate transaction. My wife and I first met Susan in 2010 when she helped us buy our first home, a condo. We were so impressed by her deep local knowledge, tenacious negotiating, 24/7 efforts on our behalf, and clear guidance on the home-buying process that we didn’t consider going with anyone else when we decided to buy a 3-BR in our dream neighborhood. We were not disappointed. After a few weeks, we found the perfect house at the perfect listing price. We knew it would be competitive, but Susan and Alex provided expert advice on how to make the offer, and in the end, we provided terms just attractive enough to end the process in our favor, but no higher than final appraisal and just above what their agent later admitted was their line. They also did a fabulous job of staging and selling our condo, which netted $30K over selling price after six strong offers during just two-days of being on the market. They get amazing results and are a blast to work with.
My husband and I loved working with Susan and Alex. This was my 9th real estate purchase but the first time that I have used The Isaacs Team. They were the best agents I have worked with and I can not accurately describe how impressed we were! They were amazing and extremely detailed. They went over and above for us in neighborhood research, service, and contract negotiations. I found them to be extremely responsive, always available, and 100% competitent in their knowledge of the markets they serve. I was really impreseed by their extensive knowledge of the real estate contract. I must say that I was incredibly impressed. They made the process easy and held our hands through difficult negotiations. I will be their client for life!
Susan not only worked hard to help my wife and me find the perfect place, she was a dogged (and effective) negotiator on our behalf once we zeroed-in. She knows the market and knows the area, but best of all she knows how to play hardball and get things done—exactly what we needed in an agent.
Susan is a true client advocate who worked tirelessly on my behalf to ensure my purchasing goals were met. We hit some seller stumbling blocks along the way, and Susan used her experience and knowledge to ensure every box was checked on my behalf – She was my personal Bulldog. Her experience in the builder realm proved extremely valuable during the entire process.
Susan is sooo responsive–pretty much 24-7. She made what could have been a difficult situation very easy to navigate. I couldn’t have bought my property without her, I’m sure. I recommend Susan VERY HIGHLY. She is a delight to work with.

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