It happens…buyer and seller re-negotiate the sales price or add credits after inspections have been completed.
Just a year ago, we would address these changes on an addendum, send to the escrow office and lender (hopefully before the loan docs have been prepared) and we were good to go!
Now, every change must be approved by the buyer FIRST before loan docs can be ordered. Here is the tricky part. They must be allowed 3 days (Sundays and holidays excluded) from receipt of the Closing Disclosure (CD) to review the change before anything can happen.
This is a result of a new lending law that commenced in October of 2015. “Know Before You Owe” rule helps borrowers understand the loan terms before they sign loan documents.
This cooling off period can have some detrimental effects on the closing date if re-negotiations are occurring close to the closing date.
Buyers and sellers who have an urgent need to close on time require agents to coordinate action items and offer guidance to ensure there are no delays.
Here are some tips to avoid the time crunch:
1-Order inspections the day you go under contact so reports are received early during the transaction
2-Get seller disclosures in the hands of the buyer ASAP
3-Push the lender to order the appraisal ASAP
4-Re-negotiate terms, if needed, as early as possible during the transaction
Finally, ensure your clients understand how the process works so they can make better decisions during any re-negotiating process.