Whether you’re in the middle of a real estate transaction, or your agent just placed a “for sale” sign in your yard, you’ve probably at least heard of the new TRID guidelines. They officially became effective on October 3rd, but what exactly does that mean for you, the seller?
The short answer is simple: time.
The TRID regulations, or TILA / RESPA Integrated Disclosure Rule, were designed as a tool for consumer protection. They call for all lenders to comply with new disclosure forms that they provide to home buyers. The forms must include a complete breakdown of fees and must also list who (the buyer, seller, or third party,) is responsible for the fee.
The disclosure forms must be presented first following a buyer’s approval, but more specifically, again at least three days before closing. In other words, a closing can’t occur until the second disclosure is presented and after a 72 hour waiting/review period.
That’s where the time factor comes into play. Concerns have risen that three-day waiting period could hold up multiple real estate transactions, particularly if you are selling your home as well as purchasing one. But there is good news: remember, these new regulations are for consumer protection.
For starters, the Consumer Financial Protection Bureau released a statement clearing up some of the time concerns. There had been some misconception that any change made to loan or disclosure restarted the three-day waiting period. But in fact, only three changes require a new three-day review:
- The annual percentage rate (APR) increases
- A prepayment penalty will be added
- The basic loan product changes
So when answering the question, “Will the new mortgage disclosures delay my closing?” the CFPB states: “The answer is NO for just about everybody.”
And there’s more good news, there’s a great chance that your Realtor, as well as your buyer’s agent, is ready for these regulations. According to a survey by the National Association of Realtors “More than 80% of respondents had taken some form of training on TRID,” even better, over 70% of Realtors rating their preparedness for these new guidelines at least average or better. The NAR also concluded that “[Realtors] are working with their industry partners and making changes to contracts to help smooth the transition.”
“It’s never been more important for a seller to work with a knowledgeable Realtor who can help ensure that the buyer writing an offer on their home is fully aware of the new loan requirements and is prepared to work with their lender in a timely manner,” noted Woods Bros agent Marcia Murray.
As complicated as they seem, the TRID guidelines are in place to actually make the home buying process easier, safer, and more straightforward for both buyers and sellers. With the help of an informed Realtor, you can rest easy and enjoy a smooth transaction.