Developed with: Academy Mortgage, Adams Community Bank, Berkshire Bank, Greylock Federal Credit Union, Lee Bank, MountainOne Bank, Salisbury Bank, and Trustco Bank.
What do the local lenders suggest for contingency and closing dates?
A 60 day closing, following the best practices we’ve identified, ensures you will be able to navigate the new disclosure process. If a buyer needs more time, REALTORS should extend all of the dates that follow and / or contact the lender for specific instructions. The Berkshire Board of REALTORS created an extensive Extension of Performance Dates addendum that allows you to extend all dates in the P&S in one convenient place. Your other important role is educating buyers on the importance of sticking to the dates they agreed to, and creating realistic expectations.
| Mortgage and Insurance Application dates | 7 days after termination date |
| Inspection Contingency Dates | 15 days after termination date |
| Insurance / Mortgage Contingency Dates | 45 days after termination date |
| Closing | 60 days after termination date |
* Please note that Inspection issues, appraisal issues, failure by the buyer or seller to provide timely documentation or perform, title issues, pay-off issues all may delay this timeline.
How can REALTORS help make sure back-to-back closings stay on track when two sales are involved?
The greatest thing you can do to make sure things stay on task is communicate, communicate, communicate. It is very important that the lenders are kept informed of any thing you might learn regarding closings, that everyone is clear with their buyer, seller, attorneys and lenders that commitment dates are incredibly important and that you follow the best practices as best as possible. Right now, if there are delays, the buyer and seller have to mutually agree to postpone a closing. We do not have an addendum that will automatically extend contract dates so staying on top of the process throughout the entire transaction timeline is critical.
What other documents do you need to have a copy of besides the Purchase and Sale Agreement?
For REALTORS, when the contract is sent to the Attorney/Lender, please always include a copy of all pages of the Purchase and Sale, any and all addendums, a copy of the deposit check and the signed lead paint disclosure notification. When the second deposit is received and/or if any other addendums are executed, send those along as well. For buyer’s, they should get a list of documents the lender will need for loan approval when they are getting their per-qualification, so that they can prepare ahead of time and be ready to go when they find their dream home.
How should Realtors handle fixtures and personal property? I’m talking about appliances, drapes, mowers or hot tubs?
Installed fixtures and appliances can be included in the Purchase and Sale Agreement (identified in Par 12) as part of the property. All other personal property, (hot tub, mower, etc) whether it something for value or not, should be a separate transaction between the buyer and seller and apart from the P&S. The Berkshire Board of REALTORS created an Agreement for Sale of Personal Property just for this situation. The personal property can be valued at $1 or however much the parties agree – and the transfer of title of that property happens at the closing of the property. The bottom line is that the mortgage lenders cannot lend for furniture or goods not intrinsic to the property.
If a buyer re-negotiates the price based on inspection issues or requests a seller make repairs, what should the Realtors do to make sure the closings stay on target?
First, make sure you send the addendum to the lender and the Attorney. The underwriter may have to consider a new purchase price in the commitment, and will most definitely have to update the closing disclosure. For repairs that the seller is willing to preform, try to have all repairs completed at least 10 days before the closing, and have the buyer approve that they have been done to their satisfaction. This avoids any last minute issues. The final walk through should be only to make sure the property is in the condition it was when the offer was made and that it is broom clean.
What is the latest date that you can change the purchase price based on renegotiated inspection issues to avoid any delays?
The price can be changed 10 days before closing without delay in the transaction timeline. The underwriters will still have to review the renegotiated price to determine if it is still in line with lending standards. A new loan estimate will have to be adjusted and reissued.
During the time before closing when the lender is getting the house appraised and the underwriter is looking at the buyers purchasing power, can the buyer/seller renegotiate the purchase terms without delays?
Yes, without a timeline delay, but with the understanding that the Loan Estimate has to be adjusted.
How should the REALTORS handle walk-thru issues, like trash left in the house or damages to the property?
Work with the seller / seller’s agent to get small items taken care of right away, even if that means calling a hauler. If the sellers aren’t receptive, make sure the lender is made aware of the issue, so they can advise you on how best to proceed. Now is the time to use those finely honed negotiation skills to get the deal done! For damages to the property, report the issue to the lender immediately, so they can have underwriting weigh in on how to proceed. Please note that not all issues will require a delay; it depends on scope, severity and possible solution.
Will lenders still be writing pre-qualification letters for buyers?
Yes, we will offer pre-qualification letters, but we cannot offer pre-approval letters
How long will be your standard rate lock?
45-50 days is typical
How will you handle P&S agreements that do not provide the needed time required for closing or contingency dates?
The lender will contact the real estate agents and attorneys immediately so that the buyer and seller can execute an addendum with realistic dates
Do all agree that the only changes to the closing Disclosure that require a 3-day waiting period is limited to APR changes, loan product changes or prepayment penalty added?
Yes, and those instances are rare.
Are buyer attorney lists closed?
Some are, some are not. You should call to determine the policy of each lender.
What happens if the seller’s attorney doesn’t get the closing attorney the payoff and adjustments in time?
Unlike most addendums in Massachusetts, the Berkshire P&S was changed based on a Connecticut model whereby the Seller agrees to accept the closing attorney’s adjustment and payoff numbers if the seller’s attorney fails to send the needed information at least ten (10) days before the closing date. This allows the closing attorney to create a Closing Disclosure required by TRID changes and not delay the closing.
Questions Fielded after the program
Do we need an addendum like the Mass Form, to handle TRID delay issues?
No, not at this time. Board Legal Counsel, the CEO and the President met and debated and discussed four different addendums created at the very last minute for TRID changes. We don’t believe they are needed. Why?
We already addressed how to handle adjustments without having to delay the closing, a key component to the addendums. In our practice, the closing attorney can calculate the numbers if not provided for by the seller’s attorney, and they are binding.
There were concerns about creating automatic extensions that don’t require buyer and seller consent. Currently, there is no extension to the closing date without consent, and there is no compelling reason now to create one… we will continue to monitor this and may make a modification if it is discovered that the lenders or attorneys are unable to perform in the timelines we’ve established.
All addendums that were produced cited the need for an automatic extension due to compliance with TRID. That isn’t possible. The regulation creates no delay; an individual or institution’s failure to perform as expected creates delay.
None of the addendum address when notice of delay has to be given. It is conceivable that the buyer could have the moving truck packed and on their way to closing when they learn of a delay. The consensus that our standards for performance and mutual consent should be preserved, unless we learn otherwise after roll-out and actual implementation.
Mastering the new contracts with fixed dates will be a challenge. What are the best practices for picking dates?
Very simply, follow the basic guidelines for time-frames and if the 15 day or 45 day or 60 day time-frame falls on a weekend or holiday, move it forward to the next working day. A niffy resource for helping you can be found online at TimeandDate.com. Simply enter your start date (the contract’s termination date) and set the number of days forward you’d like it to go. In the example below, we entered 10/15/2015 as the termination date, and asked for the date 45 days from then… the result was Sunday November 29th, so in the contract, we would enter the mortgage and insurance contingency date to be 11/30/2015… or the Monday following exactly 45 days.
When should we have the Contact Worksheet filled out?
As soon as possible. If your buyer is truly prepared, send it along with the Purchase and Sale Agreement when forwarding it to the lender and attorney. At the latest, this should be completed when the Inspection Contingency is completed.
Does the new TRID disclosure requirements apply to commercial loans?
No, this is home loan regulation. Contact the lender to verify details on time-frames for the loan type the buyer is seeking, but know that most all commercial loans do not require the same time-frame and disclosure requirements as we shared for the new TRID regulations. Sale of mobile homes are also exempt. Reverse mortgages, Home Equity Line of Credit (HELOC), Community No-interest loans and creditors making 5 or fewer loans per year are also exempt from these regulations.
Do we need an addendum like the Mass Form, to handle TRID delay issues?
No, not at this time. Board Legal Counsel, the CEO and the President met and debated and discussed four different addendums created at the very last minute for TRID changes. We don’t believe they are needed. Why?
We already addressed how to handle adjustments without having to delay the closing, a key component to the addendums. In our practice, the closing attorney can calculate the numbers if not provided for by the seller’s attorney, and they are binding.
There were concerns about creating automatic extensions that don’t require buyer and seller consent. Currently, there is no extension to the closing date without consent, and there is no compelling reason now to create one… we will continue to monitor this and may make a modification if it is discovered that the lenders or attorneys are unable to perform in the timelines we’ve established.
All addendums that were produced cited the need for an automatic extension due to compliance with TRID. That isn’t possible. The regulation creates no delay; an individual or institution’s failure to perform as expected creates delay.
None of the addendum address when notice of delay has to be given. It is conceivable that the buyer could have the moving truck packed and on their way to closing when they learn of a delay. The consensus that our standards for performance and mutual consent should be preserved, unless we learn otherwise after roll-out and actual implementation.
Some attorneys are requiring asking us to strike “time is of the essence”. Is that going to be removed from our Purchase and Sale agreement?
No, not at this time. There have been a handful of law firms that routinely requested that be stricken long before the TRID disclosure issue. Our current agreements and way of doing business hold the dates to be hard performance dates unless otherwise mutually agreed. If the buyer’s attorney recommends that be stricken, that is a negotiable item between the seller and the buyer.
Can we get a list of all of the Real Estate Agent’s contact information and license numbers for filling out the contact worksheet?
You have access to that information now! In FlexMLS, go to SEARCH | OFFICE / MEMBER. In the search results, you will find the agent’s contact information, including their license number if it’s in the database. It’s up-to-the minute and available 24/7!
Please go check your own profile to make sure your license number is listed, by going to | PREFERENCES | MY PROFILE| and then QUICK PROFILE MAINTENANCE. The license number field is right there. It takes 2 seconds and would be really helpful to all!
Does the Agreement for Sale of Personal Property Form protect the seller from having to sell there stuff if the sales doesn’t close? Should there be language that says if there is no sale, there is no transfer of personal property?
Yes, Mike Shepard, Board Legal Counsel, changed from a Bill of Sale to an “Agreement for Sale of Personal Property” for this very reason. A seller might be willing to give the mower away for a song, but only to the future owner of the home… if the deal falls through, so should the sale of personal property. That agreement specifically states that at the closing the seller will sell… if the property doesn’t sell, neither will will personal property.
What happens if the Bill of Sale says “for personal enjoyment” instead of a dollar amount, but then the seller doesn’t leave the items behind?
The buyer should contact their attorney in that instance. The buyer will have a claim against the seller and that should be handled between both parties. The lawyer can advise on how best to proceed for a breach.
Mastering the new contracts with fixed dates will be a challenge. What are the best practices for picking dates?
Very simply, follow the basic guidelines for time-frames and if the 15 day or 45 day or 60 day time-frame falls on a weekend or holiday, move it forward to the next working day. A niffy resource for helping you can be found online at TimeandDate.com. Simply enter your start date (the contract’s termination date) and set the number of days forward you’d like it to go. In the example below, we entered 10/15/2015 as the termination date, and asked for the date 45 days from then… the result was Sunday November 29th, so in the contract, we would enter the mortgage and insurance contingency date to be 11/30/2015… or the Monday following exactly 45 days.
When should we have the Contact Worksheet filled out?
As soon as possible. If your buyer is truly prepared, send it along with the Purchase and Sale Agreement when forwarding it to the lender and attorney. At the latest, this should be completed when the Inspection Contingency is completed.
Developed with: Academy Mortgage, Adams Community Bank, Berkshire Bank, Greylock Federal Credit Union, Lee Bank, MountainOne Bank, Salisbury Bank, and Trustco Bank.