TRID & Cash Sale Investments

/ / News & Insights

Just last week Title Stream handled two closings where a national lender issued HUD approval the day of the closing. The Consumer Financial Protection Bureau’s new implementation of the TILA-RESPA Integrated Disclosure which takes effect October 3rd, 2015, would have prohibited this and the closing would have been delayed. Experts are predicting that 45-60 day loan approvals will be the new normal. “Expect a one- to two-week delay in closings,” said Ken Trepeta, director of real estate services of the government affairs branch for the National Association of Realtors, when describing the impact of TRID.

What does this mean for investors? Well, the term “cash offer” will have a substantially heavier weight to the average homeowner who needs to sell their home quickly (say before a foreclosure date, or some other form of “must close by date”.) How often do we encounter a “motivated seller?” We predict that sellers will be more likely to accept a lower offer when a potential buyer brings cash to the table and with it the benefit of a shorter time to close. How much is it worth to a seller to close in 7 days versus 60 days? All things to consider when dealing with a cash buyer under the newest umbrella of Uncle Sam’s protection.

As an agent, please remind your investors that they will have an upper hand when dealing with motivated sellers and remind your sellers of the benefits of a cash offer. As always, we are capable of closing cash sales in 7 days or less!