As of January 1st of 2010, the new RESPA regulations passed by the federal government are in effect for all real estate lending transactions. RESPA, which stands for Real Estate Settlement Procedures Act, is in place to regulate truth in lending laws, and to protect consumers from predatory or unscrupulous loan schemes.
The important thing to know about the new regulations is that they can add to the length of time it takes to get from contract to closing. This is because once the good faith estimate, or GFE, has been issued to a potential borrower, any changes to the document that may cause a relatively significant change in the cost of the loan will require restating the GFE, and allowing new disclosure times for the buyer to review the information. This is important if you are buying a home, because you need to make sure you allow enough time to complete the loan process and not delay closing.
It’s even more important that your buyer’s agent knows these regulations, because he or she will be the one advising you on critical dates in your contract. Pay close attention to any dates that are followed be the phrase, “Time is of the essence.” That’s legalese for “miss this date, and it costs you money.”
When I first got into real estate in North Carolina, there were about 11,000 agents operating in the Charlotte MLS. The average Offer to Purchase was 5-9 pages. Today there are about 7,000 agents, and the average length of an offer is 9-15 pages. The fact that the number of agents is inversely proportional to the length of a contract is not just coincidence. While there are other factors shrinking the number of active agents, it is critical that you enlist the assistance of a knowledgeable and experienced agent to help with your transaction, no matter what side of the table you’ll be sitting on. If you need help with buying or selling a home, and don’t know where to begin, call or email me and we can put a plan together that meets your needs.