NEW REAL ESTATE SETTLEMENT RULES - PRE-CLOSING REVIEW OF CLOSING COSTS MADE MORE DIFFICULT FOR REAL ESTATE BROKERS REPRESENTING SELLERS, BUYERS!
For our Clients here in Chicago and Nearby, our Team routinely verifies our Client’s Closing Documents prior to the closing of their transaction to make sure the Closing Cost Items are calculated properly – and not too high! With the changes to Real Estate Settlement Procedures last year under new TRID (TILA-RESPA Integrated Disclosure) Rules, some Lenders, Title Companies, and Settlement Agents will not forward final Closing Disclosures to Brokers here.
Indeed, such a change could potentially delay closings – any calculation errors in Fees, Broker’s Commission, Tax Proration, and Seller Concessions must be corrected and a three business days’ waiting period must be given to Buyer for review before a transaction now can close. In some cases, when a closing is delayed, upset Sellers have refused to extend the closing date, potentially derailing the transaction.
As Real Estate Writer Kenneth R. Harney outlines in the Chicago Tribune, underolder HUD rules, Buyers, Sellers, and their Lawyers would receive a Closing Statement for a Sale or Purchase several days before closing, with enough time to review and correct errors. Now, lenders, often located hundreds of miles away from the transaction and unfamiliar with local fees and tax pro-ration customs, do not allow enough time and an easier opportunity for this critical review.
These miscalculations or inaccuracies might be easily spotted by an experienced Real Estate Broker or Attorney, but often missed by an unskilled Buyer or Seller. If errors are not caught until closing, they cannot be corrected on the spot. Instead, they must be re-submitted to the lender for correction, and a new three-day mandatory document review and waiting period would apply.
The obvious solution is for a Buyer or Seller to immediately share the Closing Disclosure and Master Closing Statement with their Real Estate Broker as soon as they receive it. Hopefully, in this manner, there is enough time to check and correct any errors without a delay in closing. On several occasions, since the beginning of the new Settlement Rules last October, our Team and Attorneys have caught errors quickly, and corrected them so no closing delays occur.
As we all know, especially as you prepare for an important Real Estate Closing, and Extra Professional to Review makes all the difference!
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DEAN MOSS & DEAN’S TEAM CHICAGO