About Pocket Listing
Generally, the properties that are being sold are listed on a Multiple Listing Service also known as MLS.
When a property is listed on MLS, the potential buyers and other realtors can view the information about the property and approach the real estate agent representing the property.
However, what if the seller does not want to market the sale of the property on MLS? In such a case, they can opt for pocket listing. In this post, we will learn what’s a pocket listing in detail.
What Is A Pocket Listing In Real Estate?
A pocket listing, also known as an off-market or off-MLS listing, is a property listing used to sell the property to potential buyers through a private channel other than the Multiple Listing Service (MLS).
Since these listings run through private marketing channels the properties sold in this type of listing stay in the real estate agent’s metaphorical “pocket.”
In this type of property listing, you won’t be finding any for sale sign, or see it listed on any online portals.
In addition, the real estate agent will also get on board by sharing the listing with a small number of clients or colleagues who represent that particular client.
There aren’t many pocket listings – they make up a single-digit percentage of property listings posted in the country.
How Does A Pocket Listing Work?
When you hire a real estate agent to list and sell a property, a contract is signed between you and the real estate agent and the agent’s company.
The property is usually listed on the Multiple Listing Service (MLS), a database of properties for sale that is used by all real estate agents and brokers.
This is done so that your real estate agent or broker can earn his or her commission by selling your property through coordination with other agents and brokers.
However, in pocket listings, you do not sign any contract with your agent, and your property will not be listed on MLS.
This type of listing is used by sellers with high-end or rare properties who only want serious and qualified buyers to show interest in buying their properties.
With the real estate agent’s connections, these buyers could be low in number but could get an exclusive listing for these properties.
In worst-case scenarios, the seller can use this type of listing to check if there are any potential buyers and what kind of offers they are getting from them.
If there are no offers or potential buyers during the exclusive listing, a seller can then decide to list the property on MLS.
It is important to note that some types of listings are not considered legitimate because one agent represents both the buyer and the seller.
Because of this, some types of listings are prohibited by the National Association of Realtors (NAR) or prohibited by state law.
When Should One Use A Pocket Listing?
Below are the situations when a seller might want to use an exclusive listing:
- Avoid the problem of bidding wars.
- Avoid sharing home price reduction figures in the MLS, which could alert home buyers.
- Sell to a known buyer so that the sale transaction could be quicker.
- Negotiate a discount with a real estate agent, who may not spend much time marketing your property.
- Check the home sales price and see if there are any potential buyers.
- Keep privacy of their home sale, especially if the buyer involved is a celebrity or public figure.
- Marketing to exclusive or restricted customers.
Finally, if the goal is to keep a listing private, avoid listing in the MLS, or limit it to a small number of potential buyers, a pocket listing may be a good option.
What Are The Pros And Cons Of Pocket Listing?
There are pros and cons for both the agent and the seller to offer the property as a bag list.
Pros:
- There is confidentiality for the seller and the buyer.
- The agent keeps 100% of the commission.
- A realtor can anticipate the asking price and set it accordingly before listing the property in the MLS.
Cons:
- A low number of potential buyers due to no public advertisement.
- If the deal falls through or a buyer is not found, the property has no market visibility.
- Only one agent is trying to sell the property.
- Low chances of multiple offers and bidding for the asking price.
Conclusion
Off-market listings or Off-MLS listings are essentially real estate marketed to potential buyers through private channels, as opposed to the Multiple Listing Service (MLS).
If the goal is to keep the property listing exclusive, avoid getting it in MLS, or limit it too confined buyers, this type of listing may be one of the best ways to opt for.
Understanding the working, advantages, and drawbacks of pocket listings may help you to make an informed decision.
About Fixtures in Real Estate
When buying or selling a property, it’s essential to understand the concept of fixtures in real estate.
Fixtures are an integral part of a property, and their determination can have significant implications for both buyers and sellers.
In this blog post, we will explore what fixtures are, how they are uniquely determined, and the impact they have on real estate transactions.
Defining Fixtures
In real estate, fixtures refer to items that are affixed to the property in such a way that they become part of it.
They are typically immovable and permanently attached, making them a crucial consideration in property transactions.
Fixtures can include items like built-in appliances, lighting fixtures, plumbing systems, heating and cooling systems, and even certain types of landscaping.
Uniquely Determining Fixtures
The determination of whether an item is a fixture or not can be a complex matter.
While some fixtures are obvious, such as a chandelier or a built-in oven, others can present more ambiguity.
Several key factors help uniquely determine whether an item qualifies as a fixture:
- Method of Attachment: The method by which an item is attached to the property is an essential factor in determining its fixture status. If an item is permanently affixed, such as by nails, screws, or bolts, it is more likely to be considered a fixture. Conversely, items that can be easily removed without causing damage are generally not fixtures.
- Adaptability: If an item is specially designed or customized to fit a particular space, it is more likely to be considered a fixture. For example, custom-made built-in shelves or cabinets are typically considered fixtures because they are designed to fit a specific area.
- The intent of the Parties: The intention of the buyer and seller plays a significant role in determining whether an item is a fixture. If the parties explicitly state their intentions in the purchase agreement or if it is commonly understood that an item is included or excluded from the sale, it can influence the fixture determination.
- Relationship to the Property: The item’s relationship to the property is another factor to consider. If the removal of an item would cause damage or alter the property’s functionality, it is more likely to be considered a fixture. For example, removing a central heating system would significantly impact the property’s value and functionality.
Legal Precedence and Jurisdiction
The determination of fixtures may also vary depending on the legal precedent and jurisdiction.
Courts often rely on established legal tests, such as the “intention test” or the “attachment test,” to decide whether an item qualifies as a fixture.
These tests help provide clarity and consistency in fixture determination.
It is crucial to consult local laws, regulations, and legal professionals familiar with real estate practices in your jurisdiction to ensure accurate and reliable determinations of fixtures in property transactions.
Local laws may have specific provisions that further define what qualifies as a fixture and may override any prior agreements between buyers and sellers.
Implications for Buyers and Sellers
Understanding fixtures is essential for both buyers and sellers in real estate transactions.
For sellers, identifying and properly disclosing fixtures to potential buyers can help avoid disputes and legal issues down the line. It ensures transparency and builds trust between parties.
Buyers, on the other hand, need to be aware of the fixtures included in the property they are purchasing.
Fixtures can significantly impact the value of a property and influence the decision to buy.
Being knowledgeable about fixtures allows buyers to make informed choices and negotiate terms accordingly.
Conclusion
Fixtures play a crucial role in real estate transactions, as they are an inherent part of the property.
Determining whether an item qualifies as a fixture is a multifaceted process, considering factors such as attachment, adaptability, intent of the parties, and relationship to the property.
Understanding fixtures helps both buyers and sellers navigate property transactions with clarity and confidence.
It is advisable to seek legal guidance and consult local laws to ensure accurate determinations in line with the jurisdiction’s requirements.
About Bird Dogging in Real Estate
In the world of real estate investing, finding the right property at the right price is very crucial.
There are many ways through which a real estate investor purchases potential properties such as MLS, pocket listing, etc.
However, one very unique way to find potential investment properties is through bird dogging. In this post, we will understand what is a bird dog in detail.
What Does Bird Dogging Mean?
The name bird dog comes from hunting, where dogs are trained to find fallen birds for hunters. An individual in real estate is referred to as a “bird dog” who financial asset for other real estate professionals.
A bird dog is an individual who looks for real estate properties that are off-market or undervalued and offers them to investors in exchange for a percentage of net profit in the transaction or a flat fee.
A bird dog is not a licensed real estate agent, instead, they work with other bird dogs and build a network in the area they work to find properties that could bring potential profits for the real estate investors.
How Does Bird Dogging Work?
In the world of real estate, bird dogs search the market for foreclosures, short sales, distressed properties, or other investment opportunities. Once the bird dog finds a property, it contacts a reliable investor.
The investor has to decide whether he wants to continue with the project. Bird Dog earns money by paying a finder’s fee through an investor.
For example, let’s say you’re a bird dog and you found a foreclosed property that could bring potential profit for any real estate investor. You contact the real estate investor and tell him about the property.
Once the investor decides to purchase the property that you have suggested, you would be paid by the investor either a flat fee or a percentage (2% to 8%) on the total sale transaction amount.
What Are The Pros And Cons Of Bird Dogging?
Let’s take a look at the pros and cons of being a bird dog and see if this is the right choice for aspiring real estate professionals.
Pros:
Here are some of the pros of bird-dogging.
- Bird dogging is low risk and requires little involvement: Bird dogs are less risky because they are a type of real estate investment that does not require a bird dog to buy the property. Also, it has a low commitment because once they hand over the property to their investors, they no longer have responsibility for the property.
- Bird dogs can work part-time or full-time: Bird dogging does not need a full-time commitment, which means that you can be flexible and work a few hours a week or over the weekends.
- Bird Dogging Will Help You Get More Exposure to Real Estate Industry: Even if you don’t buy the property yourself, bird dogs can learn a lot about the house, especially when you learn to find potential properties. Newcomers to real estate may find that becoming a bird dog is a great way to learn about the real estate industry.
- Bird dogs may get good profit: It is possible to make good money as a bird dog, especially because they do not invest their own money.
Cons:
Here are some of the cons of bird-dogging.
- It could be a difficult job: One of the biggest drawbacks of bird-dogging is that it can be challenging. You have to spend a lot of time and effort to find a good business, and even then, there is no guarantee that you will succeed. Finding great deals can be difficult, as can finding investors who will benefit from the deals you find.
- Risky Commission-Only Service: Bird Dog is a commission-only service, which means you only get paid if the deal is completed. This can be a dangerous situation because there is no guarantee that the deal will close. If the deal falls through, you don’t get paid, which means you could end up spending a lot of time working for free.
- You can be ripped off: Unfortunately, there are always people who try to take advantage of others. When bird-dog, you have to be careful about scammers who may try to take advantage of you. Be sure to do your research and always work with reputable people. The last thing you want to do is find an investment opportunity for someone and not get paid for it.
Conclusion
If you are new to the real estate industry and are willing to spend time learning the business with minimum or no investment, bird-dogging could be one of the best options for you.
Before you decide to take this chance, make sure that you have all the points of risks covered. As a bird dog, make sure that you sign a contract with reputable investors that can pay for your service.
You can get help from a real estate attorney to finalize the contract that could be appealing to the investors. Make sure that you research the area where you are planning to work as a bird dog.
An Overview of Reverse Mortgage vs Forward Mortgage
A forward mortgage is a term that means traditional mortgages and the term is rarely used, except in comparison with a reverse mortgage hence you would have never heard of it.
Depending on your financial situation you go with a forward or reverse mortgage.
If you are not yet 62, then the closest equivalent to a reverse mortgage is a home equity line of credit (HELOC).
HELOC is a set amount of money that can be drawn any time, for any reason provided your home has the equity, In a HELOC your home acts as collateral.
Your home is used as collateral by both forward and reverse mortgages as they are big loans, and huge financial commitments.
A single home can be used as collateral twice in their lifetime by a couple, by getting a forward mortgage while purchasing and a reverse mortgage later in life.
Reverse Mortgage
The federal government regulates reverse mortgages to prevent predatory lenders from taking advantage of senior citizens.
At the time of settlement, the homeowners can get the entire loan amount as a lump sum, with no restrictions on its use.
The only expectation being they will pay off their outstanding debts and use any remaining funds to increase other sources of income.
Homeowners can also get the money as a monthly annuity or line of credit.
In the case of a reverse mortgage, the accumulated debt and interest are due when the mortgage holder moves, sells the home, or dies.
The heirs have to pay the loan within the grace period of six months.
The bank recovers the loss from the insurance fund, which is one of the costs of the reverse mortgage.
In 2017 insurance fund was supported by the Department of Housing and Urban Development (HUD), which administers the dominant reverse-mortgage program.
Forward Mortgage
Borrowers instead of opting for the typical 30-year mortgage, may get a better interest rate, and save a considerable amount in interest over time if they go for a 10- or 15-year mortgage.
But it requires a good amount of confidence that your income and expenses will stay steady or improve in the coming years.
Except for the housing bubble in 2008 usually, the mortgage system assumes that real estate increases in value over time.
According to a survey by ATTOM Data Solutions, as of May 2020 3.6 million American homes, or 1 in every 15 homes with mortgages—were still severely underwater.
This means the homeowners need to continue paying inflated mortgages or when they sell would pay their banks 25% or more above their homes’ assessed value.
During the housing boom, many homeowners acquired a line of credit, using their homes as collateral, in addition to their mortgages.
The homeowners and their bankers took it for sure that the big increases in home values would just keep going but the homeowners got stuck holding the double debt, for the mortgage and the line of credit When the bust came.
For the first quarter in May 2020, a U.S Home Equity and Underwater Report was released by ATTOM Data Solutions.
It disclosed that 6.6% of all mortgaged properties in the U.S. were underwater properties, which is higher than 6.4% in the fourth quarter of 2019.
Examples of Reverse Mortgage vs Forward Mortgage
If a couple, takes a mortgage and buys a home with a small down payment and promises to pay the money back in small monthly installments of principal plus interest over a period of years.
Traditionally the standard is thirty years. Over the number of years, they have paid off the mortgage in full.
The couple who, are living in the same house has turned 62 years of age.
Now they are unable to make the ends meet even with their combined Social Security benefits and retirement savings, so they opt for a reverse mortgage.
They’ll pay nothing upfront and get a monthly check to supplement their income with the option of a reverse mortgage.
They don’t need to pay the mortgage or the interest and costs that accrue over the years.
But, in the future, their heirs must do so, either by selling the family home or with a lump sum.
Conclusion
There are two types of mortgages – the reverse and forward mortgages and both are large loans that use your home as collateral.
Forward mortgages, are commonly called mortgages, are loans that are used to purchase a home.
Reverse mortgages, require you to be 62 years old or older, and they allow you to borrow a lump sum or annuity-like payment when you have large amounts of equity in their home.
There are no monthly payments with reverse mortgages but the balance along with interest is due when the borrower dies or sells the home, or moves away.
Reasons for Comparing Mortgage Quotes in Texas
Mortgage a.k.a home loan is a very vast industry with many options a consumer can get.
If you are looking for a mortgage refinance or a new home purchase, you should always compare at least two different lenders/brokers before finalizing your loan.
Many mortgage quote comparison tools are available online that help you compare mortgage quotes in Texas.
It is now more important than ever to compare and shop around for the best interest rates in the market due to the competitive nature of the business.
It is evident that when two or more lenders compete, the borrower gets the maximum benefit and mortgage savings.
Today with the right to choose for the borrower and ever-growing knowledge of mortgage refinancing and property purchase, having knowledge about a few parameters can fetch you the best interest rate, maximum home equity loan, and lowest closing cost.
Today we will learn about these parameters and how they can help you to compare and get the best mortgage quotes in Texas.
1 - Interest Rate
When you decide to refinance a loan or purchase a new home, the first thing that we look at is the interest rate. Interest rates in the quotes that we get may vary from lender to lender.
We might think that the lender providing us with the lowest interest rate is giving the best Quote.
But this perception could be inaccurate because of the simple reason that there is more to compare.
The lender who quotes low-interest rates may be charging high closing costs. Many borrowers are comparing mortgage quotes in Texas before making an informed decision.
2 - Monthly Payments
The repayments say a lot about your creditability. When you receive a quote always keep a tab on monthly payments making sure it falls way into your monthly budget.
This would give you room to make some extra payments every month hence finishing the loan in less time.
Using various Mortgage calculators online, you can get to know the best monthly payments you can get for your mortgage loan, home equity loan, or new home purchase.
Using online comparison tools for mortgage quotes in Texas is one of the best ways to anticipate your monthly mortgage payment.
3 - Closing Costs
Closing costs are the fees incurred for getting a mortgage to refinance or a home purchase apart from the actual loan.
On average, the closing cost can be anywhere between 2 to 5 percent of the total loan value.
Closing cost is the second most important parameter when comparing mortgage loan quotes.
Usually, these are combined with the final loan amount. However, the borrower has a choice to pay this upfront at closing.
There are many closing cost calculators online, which could help determine how much closing cost should be charged on a particular mortgage loan refinance or a new home loan.
According to a recent survey, the average closing cost for a mortgage quote in Texas is $3,938.
4 - Tenure
It is essential you compare apple to apple or orange to orange. It would not be fair to compare an apple to an orange.
For E.g. it would not be appropriate to compare a 30 years mortgage loan to 15 year one.
So when you get quotes from lenders, you need to make sure you are getting quotes for the same tenure.
When you are comparing mortgage quotes in Texas ensure that you compare them with the same tenure for fair results.
5 - The Total Amount Paid for the Tenure
This term basically means how much loan you are paying over the tenure of the loan, including principal, interest, and closing costs.
When you are comparing the mortgage quotes in Texas, the lower the total amount paid for the tenure, the better is the Quote.
Conclusion
Once you have all the above parameters covered, you can use comparison tools online to know which lender quotes are best for your financial needs.
Your financial decision will determine your present and future as most mortgage loans are amortized for 10,15 or 30 years.
Just ensure you get the correct information through the mortgage quotes in Texas from the lenders, compare and save hundreds and thousands of dollars. Remember when you compare, you save!
About Kick Out Clause
In a real estate purchase transaction, when a seller accepts the buyer’s offer they sign a sales contract to confirm and initiate the purchase transaction. Most of the contracts are straightforward and may have fewer contingencies.
However, if there is a contingency where the buyer needs to sell his current home to buy the new one, the seller has the option to include a real estate kick out clause. In this post, we will understand what is a kick out clause in detail.
What Is A Kickout Clause?
Generally, once the seller and buyer sign the sales contract, the seller is supposed to take the house off the market, and cannot accept any more offers from other buyers.
The kick-out clause is a conjoined clause included by the home seller on a home sales agreement. In this clause, after the home seller has accepted the buyer’s offer with contingencies, the seller can continue to accept offers from other buyers.
In this type of clause, the seller is allowed to accept an offer with contingency and continue to search for an offer without any contingency.
In such instances, when a seller receives a better offer, it allows the seller to kick out the buyer with contingency and proceed with the second offer without any contingency.
The buyer with contingency will have up to 72 hours to either remove the contingency or walk away from the transaction.
How Does The Kickout Clause Work?
In most, but not all, kick out clauses will contain what is called a ‘right to refusal‘. This means that if a seller receives an offer from other buyers without any contingencies on a home, they must notify the original buyer and allow them to change their offer.
In most cases, buyers have 72 hours to recall their contingencies and decide whether to proceed with the sale. Otherwise, the original sale will be voided.
The buyer gets their earnest money back and the seller can proceed with a second non-contingent offer. If the original buyer accepts to remove the contingency, the second offer will be revoked and the original contract will exclude the contingencies.
It is also relatively rare for sellers to write blanket real estate kick-out clauses that allow them to accept good offers. Few buyers accept this.
For example, it is rare for a buyer to agree to this type of clause simply by accepting a higher sales price or waiving an important condition such as a home inspection.
Instead, most kick out clauses relates to special risks of sales contracts. The most common type of kick out clause is buyer home sale contingency.
In a home sale contingency, the buyer is given a certain amount of time to sell the home before completing the new home purchase, usually ninety days.
If the buyer fails to sell the house within the stipulated time, the purchase contract becomes void and the seller is free to put the house back on the market or accept the offer from other buyers.
Buyers like this situation because they avoid the risk of taking out two mortgages, and many believe they will use the proceeds from the sale of their previous home to pay down payment for their new home.
These clauses are rare when selling a home in a hot market, but even in a buyer’s market, few sellers may accept this type of clause.
What Are The Effects Of The Kick Out Clause On Buyers And Sellers?
Affects On Buyers: When the buyers make a home sales contingent offer, they risk losing their properties to another buyer if they are unable to sell the property within the specified time frame.
Affects On Seller: A contingency allows the seller to continue to put the home on the market once an offer is received. In other words, this clause in the sales contract allows the seller to “Kick-out” the buyer if a better offer is available.
Conclusion
Kick out clauses help buyers make a conditional offer on a home while giving them risk-free time to deal with contingencies.
Homeowners looking to sell their homes in a buyer’s market may be more than willing to accept less significant contingent offers if they are free to find a better deal.
As a buyer, you need to understand the specifics of this clause and ensure that your earnest money is refunded if this clause is executed.
About Servicemembers Civil Relief Act (SCRA)
Being an active duty member of the U.S. Military, National Guard, or other U.S. service organization means that you are entitled to additional financial protection that is not available to the general public.
To understand the kind of financial protection that you would have if you are an active duty member of any of the U.S. service organizations, you might want to understand what is SCRA. In this post, we will learn what is SCRA in detail.
What Is SCRA?
The full form of SCRA is Servicemembers Civil Relief Act. The Service Members Civil Relief Act was passed by Congress in 2003 to provide financial protection to the US active forces like the Military, Reserves, Coast Guard, National Guard, and other organizations serving the country.
The law limits the interest rates that active service members pay when they apply for a mortgage, vehicle, personal, and student loan.
This rate limit also applies to all credit card debt incurred by members before enlistment in the Army, National Guard, Coast Guard, and other eligible US service organizations.
Under this act, the lender is required to take some additional steps if the entitled service member is unable to make the payments for the debt.
The law also makes it easier for eligible US service members to terminate leases, including apartments, private homes, and cars, without penalty.
How Does SCRA Work?
The Servicemembers Civil Relief Act protects all individuals currently serving in the armed forces, including non-members of the Army, Navy, Air Force, Marine Corps, and active duty members of the Coast Guard.
It was expanded to include reservists on active federal duty, members of the National Guard on federal duty for 30 days or more and military personnel on sick leave or furlough.
Children of military personnel and other dependents are also protected when they are co-signing a loan.
What Does SCRA Protect?
Interest Rate Limits:
One of the most popular benefits of this act is the cap on the interest rate that eligible service members have to pay.
Any debt held before their posting, including credit card, home, or auto loans, must not exceed 6%.
Home And Car Protection:
In addition to allowing military families to cancel their phone, cable, and internet contracts in some cases, the act also includes several other protections for landlords, renters, and car renters.
Home and car renters can terminate a lease under certain conditions, and landlords and mortgage lenders cannot foreclose or evict a family of an active service member from the home without a court order.
Insurance:
The law also includes health and life insurance protection for eligible members when they are called for active duty.
All health insurance in effect at the time of active duty must be reinstated at the same premium rate upon the member’s return. In addition, service members can defer paying life insurance premiums without losing coverage during active duty.
Protection From Default Judgment: In a default judgment, if you do not appear in court to defend yourself, the judgment is in favor of the person or party suing you.
This can be a serious problem for active duty personnel. It is impossible to appear in court if you are on active duty.
However, according to the Servicemembers Civil Relief Act, if you are on active duty and cannot appear in court to defend yourself in a civil suit, the court cannot pass the default judgment until it first appoints an attorney to represent you.
The law requires the party suing you to provide the court with proof that you are currently on active duty service through an affidavit. The law also requires courts to allow a case to be postponed for at least 90 days.
Conclusion
The SCRA provides significant protections to active service members. If you are applying for a loan or a new loan, it makes sense to apply for the statutory interest rate cap and utilize the act to your benefit.
It’s also important to take advantage of the law’s protections if you plan to terminate your lease or face foreclosure.
If you are an active service member and ready to make the transition to homeownership, Speak to your trusted loan officer to make an informed decision.
All About Property Manager
Owning an investment real estate property means being responsible for its daily operations.
Being a real estate investor, handling the day-to-day operations could be challenging especially when you own more than one investment property or multi-unit investment property.
Taking care of lease collection, repairs, finding new tenants, keeping up with the market rent, etc are a few of the responsibilities that you need to take care of as an investment property owner.
You can hire a property manager who can take care of all these responsibilities for you. In this post, we will understand what are the roles and responsibilities of a property manager in detail.
What Is A Property Manager?
The property manager is the owner’s partner that helps in maximizing the return on investment of the property by effectively fulfilling the basic functional duties of the property.
PM helps maintain investment properties on behalf of property owners, communicate with tenants, collect rent, improve budgets, property maintenance, and keep records.
Property managers usually take care of investment properties in areas where real estate investors don’t live or don’t want to manage them personally.
Based on the needs of real estate investors, they can hire a single person or an entire management company.
The property managers would charge a fee to take care of these basic duties. The amount and method of payment depend on the asset manager’s business model.
Some managers charge a flat fee, but most commonly it is a percentage of the unit’s total monthly rent in addition to any other costs.
What Does A PM Do?
All real estate investment property has different requirements, but in general, responsibilities of the real estate managers are as follows:
- Taking care of the security deposits and arranging rental agreements
- Taking care of the maintenance requests and helping tenants to move out or move-in
- All documents management: Rental agreements, maintenance records, insurances, additional requests, etc.
- Interviewing and gaining the attention of potential tenants
- Recruitment and management of maintenance contractors when required
- Taking care of maintaining the physical condition of the property and all its units
- Collecting monthly lease and following up on unpaid lease
- Setting competitive rents to attract more tenants
- Keeping track of the budget for maintenance and repairs.
What Are The Pros And Cons Of Hiring A PM?
The Pros:
- No responsibilities for operational duties: Another major benefit of having someone else manage your property is maintenance care. Instead of doing the repairs yourself, you can rely on the building manager or their maintenance team to do the work.
- Advantages for multi-property investors: Owning multiple properties can be difficult to manage while satisfying tenants. Hiring a real estate manager can provide the work and attention your property and tenants need, even if you don’t have the time to manage it yourself.
- Freedom of investing elsewhere: One of the key benefits of working with an asset manager or management company is the ability to invest in remote properties while managing remotely without getting yourself involved.
The Cons:
- No control over your property: When you work with property managers, you have to give up direct control of your property and let them manage things for you. This will help you avoid the actual duties of property management, but it also means you can do things differently than they do.
- High Management Fees: Working with property managers has a cost associated with it. As mentioned above, several fees may be charged in exchange for the services of an asset manager. These costs may vary, but usually represent a significant portion of the total monthly rent. Before hiring one, research your asset manager to make sure it will work within your budget.
- The tenant selection process can be imprecise: Property managers are usually tasked with selecting potential tenants to live on your property. Even if there are some screening parameters to be followed, property managers can be lenient in handpicking tenants, which some landlords may think to differ.
Conclusion
Hiring a property manager to maintain your property may seem like the most logical idea. However, you might want to consider the cost of hiring one and see if it falls within your budget.
Though you might have the freedom to invest in other real estate opportunities, you might not have complete control over your real estate if you choose to hire an asset manager or a property management company.
Check with your state requirements as some states require the property managers to be licensed, while other states don’t.
About Betterment
As a homeowner, you would always look to increase the value of your property by making some significant improvements.
There are multiple ways to increase the value of your home; however, not every home improvement increases the property value. In this post, we will understand what is a betterment in real estate in detail.
What Is A Betterment In Real Estate?
Betterment refers to improvements that increase the value of an asset or make it “better”. In real estate terminology, betterment is an improvement to an asset or surrounding infrastructure that adds value to the asset.
There is an important difference between betterment and general repair and maintenance.
For example, fixing a roof or painting the home is not considered betterment because it simply maintains the property’s original value.
Whereas, adding a new garage or a new bedroom is considered betterment because it will increase the value of the property significantly.
Below mentioned is another example:
Betterment: Adding a 2nd bathroom to a property that had only one previously.
General maintenance: Replacing the plumbing system with a new one.
How Does A Betterment Affect Property Sale?
Now that we understand what is a betterment, let’s know-how will it affect your property sale. How the improvement affects your home will depend on how you finance the betterment.
Self-financing is different from taking out a loan for improvements. But the principle remains the same.
The financial cost of the improvement is reduced by the amount you have to pay to finance it. Improvements can be a lien on the property.
That means you have debt on that property. This can affect the sale of your home because you will have to pay for home improvements before selling the property.
All liens must be removed from the property. Otherwise, there is a limit to what the homeowner can do.
For example, if the contractor has established a lien against the property. They are usually removed after the contractor receives the payment for the work.
What Are The Types Of Betterments?
There are two types of betterments in general. These are public improvements (or government projects that increase the value of a home) and private improvements (home improvements that increase the value of a home).
This is important because property owners have little or no say in public improvements, but both can affect their property tax bills.
1 - Public Betterment:
Public betterment is a community project that increases the value of your home. Here are some examples of common improvements:
- Adding a new road (but not repairing the old road).
- Adding a new park close to the house
- Connection to city water and sewer (in homes with wells and/or septic tanks)
- Adding a new district school
- pavement upgrade
There is one thing to remember. Improvements in government are often accompanied by higher property taxes. Public improvements increase
the value of the real estate and hence are taxed accordingly. The City of Boston provides excellent and clear information about the impact of public improvements on your tax bills.
When a person is part of a community that benefits from public betterments or improvements (for example, pavements upgrade, parks, new roads), the properties in the community would be levied with additional property taxes.
Each parcel of subsidized property is assessed pro rata and the cost of betterment can be paid in full or divided for up to 20 years.
If you disagree with a tax increase or want to know how currently, planned improvements will affect future taxes, we recommend contacting the Assessor’s Office.
2 - Personal Betterment:
When it comes to personal betterment, a home’s value often increases when you sell it or appraise it for a refinance. Some major improvements add significant value to the home, while others do not or are minimal.
It’s important to remember that a new bedroom priced at $50,000 may not increase the value of your home by $50,000.
Items like roof replacement and furnace replacement increase a home’s marketability, but if replaced with similar materials, the increase in value will be minimal.
For example, replacing an old composite shingle with a new composite shingle is of little value because every house must have a roof.
Below is an excellent list of common improvements and how those improvements affect asset values. Here are some improvements that generally add value to properties:
- Bathroom upgrade.
- Kitchen upgrade.
Some upgrades that typically result in a lower return on investment include:
- Construction of new terraces and decks in outdoor spaces.
- Basement upgrade.
- Installing new flooring such as hardwood and tile (except carpet).
The elements with the lowest return on investment are:
- Swimming Pool Installation
- Add new paint (including custom murals)
Conclusion
Betterment could be one of the best ways to increase your property value. However, it is important to note that the amount that you spend for the improvements may not necessarily be equal to the appraised property value.
Some betterments may give you a significant boost in the property value and some might not.
Speak to a professional before you decide to do an improvement, their advice may help you to maximize your betterment benefit.
About Section 8 Housing
Generally, the process of renting a property includes the tenant paying a deposit to the landlord signing a contract, and paying rent every month according to the agreement for the agreed tenure.
However, not everyone can afford to rent, especially individuals from low-income families. For such families and individuals, there is a program known as the Section 8 Housing Voucher Program.
In this post, we will learn what is section 8 housing program and how it works.
What Is Section 8 Housing?
The Section 8 Housing Program was established under the Housing Act of 1937.
The purpose of the program is to provide safe and sanitary housing for low-income people, the disabled, and the elderly.
This home program is done through Housing Choice Voucher Program.
Vouchers are used by low-income families, and eligible individuals as portable subsidies to lower their monthly rent.
Although the US Department of Housing and Urban Development (HUD) funds and oversees the program, the Public housing agency manages the Housing vouchers by itself.
Public Housing Agency determines section 8 housing program eligibility based on combined annual income and the size of the family.
Your gross annual income must not exceed 50% of the local median income. By law, 30 percent of the housing choice vouchers must go to families earning less than 30 percent of the median income in the specific area.
If you qualify for Section 8 housing, you pay 30% of your adjusted gross income monthly for rent and utilities.
The remaining 70% is paid directly to the homeowner by the public housing agency, which manages the vouchers for the specific family.
How Does Section 8 Housing Program Work?
The Housing Choice Voucher program puts housing selection in the hands of the individual family.
Very low-income families selected to participate in the program by Public Housing Agency are encouraged to consider a variety of housing options to find the home that best meets their family’s needs.
Depending on the family size and composition of the housing voucher holder’s family, you will be notified of the size of eligible units.
The housing unit chosen by the family must meet an acceptable level of health and safety before the Public Housing Agency can approve the unit.
Once the voucher owner finds a unit to own and agrees to lease terms with the homeowner, the Public Housing Agency must inspect the property and determine if the homeowner is requesting appropriate rent.
The Public Housing Agency sets payment standards commonly used to calculate the amount needed to rent affordable housing in the local housing market and the amount of housing assistance a family will receive.
However, these payment standards do not limit or affect the rent the homeowner can charge or the rent a family can pay.
Families receiving housing choice vouchers can choose units whose rent is lower or higher than the payment standard.
Housing Voucher families must pay 30% of their gross monthly income adjusted for rent and utilities, and families must pay an additional amount if the unit’s rent exceeds the payment threshold.
When a family moves into a new unit where the rent exceeds the payment threshold, the law allows the family to pay up to 40% of their adjusted monthly income as rent.
How To Apply For the Section 8 Housing Choice Voucher Program?
If you are eligible for the housing choice voucher Program, please follow these steps to apply for same.
1: Find your Public housing agency:
The first step is to find a public housing agency. You can find your local PHA by state, city, and zip code and get all the required contact information.
2: Check your eligibility:
Once you contact the PHA you would now work with the public housing agency to determine eligibility for this program.
Your eligibility depends on your family size and gross annual income. In general, your income should not exceed 50% of the local median income.
Sometimes local PHAs give priority to certain people who receive housing assistance first. For example, special consideration may be offered the homeless individuals.
If you are eligible, you must notify the PHA to keep wait times as short as possible.
3: Application Filling:
Assuming you qualify for this program, you’ll need to fill out the application for this program. The application is free and will be available online or by mail.
You’ll need to provide information about your eviction history, citizenship, criminal history, and income.
4: Check your waiting list status:
After you have submitted your application, you can see the status of the waiting list. If you live in an area with high demand for this program, you may be on a waiting list for several years.
Once your application has been processed, you can check your waiting list status through our online portal.
5: Find affordable homes:
Finally, after receiving the voucher, you can find affordable housing. The voucher that you receive is valid only for 60 days.
Accept your voucher and find a home that matches the requirement of the program.
Once you’ve chosen a home, you may need to sign a minimum one-year lease with the homeowner and pay a specific amount as a security deposit.
As a tenant, you need to pay 30% of your monthly income as rent and the public housing agency pays the rest directly to the homeowner.
Conclusion
If you fall under the low-income family group, section 8 housing could be one of the most affordable housing options that you may want to consider.
However, it may take more time than expected to get the housing choice voucher. If you are looking for renting and don’t have enough time to wait for approval, you may want to consider some other options.
About Time Is Of The Essence
If you are a buyer or a seller involved in a real estate transaction, you would always want the transaction to be completed as soon as possible.
In such transactions, there are many clauses and terms that are needed to be followed by all the parties involved.
One such important clause is ‘Time is of the Essence’. In this post, we will understand what ‘Time is of the Essence’ is in detail.
What Does Time Is Of The Essence Mean?
“Time is of the Essence” (TIOTE) is a legal expression used to indicate the period during which one party must fulfill its contractual obligations to the other.
Failure to meet the obligations set within the time mentioned in the TIOTE clause of the contract results in a violation of the agreement.
This type of clause could be found in various industrial agreements, but are most common in real estate agreements.
This clause in real estate contracts means that the party under the contract must fulfill their obligations within a specific time frame.
Even if this clause is not expressly stated in the contract, the same principle may apply to the “time is of the essence” letter.
For this letter to hold up in court, it must contain a reasonable amount of time, certain conditions, and information about what will happen if the parties do not fulfill the obligation in the specified timeframe.
In a real estate transaction, any act that must be completed within a certain period may be subject to this clause.
Some examples are the delivery of notices, delivery of documents, closing dates, and termination methods. Real estate agreements must include a specific timeframe for each task that is dependent on time during the process.
What Happens If Time Is Of The Essence Clause Is Breached?
If there is a TIOTE clause included in a real estate agreement, there would be penalties if the party under obligation does not fulfill the task within the deadline.
For example, let’s say you signed a contract on January 15th, 2022 to purchase a property. The contract stipulates that the closing should be done within 30 days from the date of the contract.
If you are unable to close the transaction on or before February 15th, 2022, you may have to submit a reasonable extension for this clause, or your contract with the seller would be terminated.
Being said that, real estate laws vary from state to state. It is suggested to go through the terms and conditions of the contract before you proceed with the process.
What Are The Standards Of The 'Time Is Of The Essence' Clause?
The details of this clause may vary from contract to contract. However, the principle of transparency between the parties is always necessary. Here’s what to look for in this type of clause:
1. The clause must be disclosed to all parties
It is important to disclose this clause to all the parties involved in the transaction. This clause cannot be enforced if any of the parties are not disclosed this clause about their obligations in the contract.
All the parties that are involved in the transaction should be aware of the time frame and the consequences of missing the deadlines.
2. All parties have the right to "reasonably" extend the deadlines
In some cases, you may have to extend the deadlines due to unforeseen issues and events. Each party reserves the right to request a “reasonable” extension of the deadline.
However, the other party must agree to a new deadline. Failure to meet the deadline by not requesting an extension is a breach of contract as the expiration date becomes effective.
3. Amendment of a breached contract
Even if a party violates this clause, the error can be corrected by modifying the original stipulation. Missing deadlines can have serious consequences unless both parties agree to modify the original clause that was breached.
Conclusion
The intention of including the ‘Time is of the Essence’ clause in a contract is to ensure that all the parties involved in the transaction complete their tasks and helping to expedite the closing of the transaction.
If you are a buyer or a seller of a property that needs to know if this clause needs to be a part of your real estate transaction, get in touch with your trusted real estate attorney to know everything about this clause in detail.
About Mortgage Demand Feature
When you are looking to get a mortgage to buy a new property there are tons of documents that you have to sign with various kinds of clauses.
Some of these clauses are to protect the borrowers; however, some of them could give more benefits to lenders.
One such clause that borrowers usually sign unknowingly is the mortgage demand feature. In this post, we will understand what is mortgage demand feature in detail.
What Does A Demand Feature Mean In A Mortgage Loan?
The mortgage demand feature simply allows the lender to request the borrower to pay the full amount of the loan before the tenure ends, which must be followed if you have agreed to it in the mortgage agreement.
If the lender demands this clause anytime for any reason, the borrower needs to pay the amount in full including the principal and interest to date.
This feature protects lenders from low-interest loans provided to homebuyers in a rising interest-rate market.
If the demand clause says “yes” in your agreement, it is better that you avoid signing the agreement even if the lender states that they will not use this clause against you. You must look for all the options very carefully before signing the dotted line.
If the demand clause says “no” means that the lender would not ask the borrower to pay off the loan before the tenure ends, unless the borrower violates other parameters in the agreement.
Also, if you sell your home before the mortgage expires, you will have to pay the entire mortgage directly to the lender.
Why Would A Lender Put The Mortgage Demand Feature In A Loan?
Most of the lenders will have this clause marked as “no” in the mortgage agreement.
The lender will have the demand clause included in your agreement if they see some uncertainty in your application.
It all depends if your lender trusts your ability to pay the mortgage. If the lender insists on including a mortgage demand clause, it’s worth taking the time to ask why it was included in your contract.
It is possible that the lender encountered some issues with your credit history or employment in your application due to which this clause was included in your contract.
Talking to your lender and understanding the reason will help you to justify and remove the demand clause from your mortgage agreement.
If the lender still insists on putting this clause in your agreement, it’s worth following up and asking for clarification.
You can negotiate to remove this provision, or at least know what needs to be fixed before you decide to go with this lender or approach a new lender.
What Are The Types Of Mortgage Demand Features?
There are three basic loan demand features when it comes to a mortgage. These are the mentioned below:
Acceleration clauses: This is the main reason why some lenders ask to pay off your loan earlier than the agreed term because you may be in breach of your mortgage agreement.
Under the accelerated clause, the lender may ask for the full payment of the loan if the borrower is unable to pay multiple payments even after the grace period.
Due on sale: As the name suggests, this clause comes into play when the borrower is selling the home.
When you sell your home, you have to pay the entire balance on the mortgage including the principal and interest, and will not be transferred to the new buyer purchasing the property.
This is one of the most common loan demand features used by most lenders.
Loan demand feature: In this type of clause the lender may ask the borrower to pay the complete mortgage balance anytime without providing any reason.
In such a case, it is best to talk to your lender and try to resolve the issue amicably.
Conclusion
Mortgage demand features may seem unreasonable at times irrespective of your relationship with your lender.
You and your real estate attorney read the fine print on your mortgage to ensure that you check for this clause in your contract.
If you have this clause included in your contract, try to reason with your lender to get it removed by mutual understanding before you decide to go with some other lender.
About Escrow Refund
When you get a mortgage from a lender to buy a home, your lender will require you to open an escrow account to hold your property taxes and homeowner’s insurance amount to be paid when it is due.
In most cases, the property taxes are paid annually at the end of the year when your lender does something called escrow analysis.
This will help them understand if the money accumulated in the escrow account is enough to pay their property taxes and home insurance. But what happens if you have overpaid into your escrow account?
Although the possibility is rare, you would receive an escrow refund check from your lender. In this post, we will understand what is an escrow refund in detail.
What Is An Escrow Account?
Before we understand how the refund of the escrow amount works let us understand what an escrow account is.
When you are buying a home, there are two types of escrow accounts that are created.
The first account is opened by a third-party title company that holds the earnest money deposit that you pay to the seller to show your seriousness in buying the property.
This money will be adjusted towards your closing costs or the down payment that you are supposed to make to purchase the property during the closing.
The second escrow account will be opened by your lender. In this escrow account, the lender will accumulate your property taxes and homeowner’s insurance every month and pay them to the right party when they are due.
As a borrower, you will be making payments on your mortgage to the lender every month which will include your principal amount, interest amount, property taxes, and homeowners insurance.
The interest and principal amount will be going towards the repayment of your mortgage, the property taxes will go to your county appraisal district and the HOI premium will go to your home insurance company.
What Is An Escrow Refund?
Escrow refunds occur when you have excess funds in your escrow account and receive a check for your balance from your lender.
It is important to note that escrow refunds are not available unless the balance is at least $50.
If the surplus in the escrow account is less than $50 per year the escrow account analysis, the lender servicing your loan may repay the excess amount.
However, instead of a refund, the lender may also choose to apply the access amount toward next year’s escrows.
If there is a surplus in the escrow account after the loan is repaid, a refund would be initiated for the remaining amount.
When Are You Eligible To Receive An Escrow Refund Check?
Escrow returns can occur in a variety of situations. The details will depend on your specific circumstances, but here are some common situations where escrow returns are possible:
Mortgage Payment in Full: If you have an outstanding balance in your escrow account after your mortgage is paid off, you may be eligible for an escrow refund for the remaining balance.
The lender must repay the remaining balance in the escrow account within 20 days of the full repayment of the mortgage loan.
Low tax bills: Your tax bills may vary from year to year. If your property tax assessment is reduced, you may be eligible for this refund.
Overpayment on EMD: If the buyer has paid more than the required amount as an earnest money deposit, he or she is eligible to receive the refund from that escrow account once the account is closed at closing.
Change In Home Insurance Premium: In many cases, the buyer changes their insurance company to get lower premiums that could help them save money on their monthly expenses.
In such case, the lender needs to be intimated and the access amount that you have paid to the lender for your insurance would be refunded.
Mortgage Refinance: If you are refinancing your mortgage with a new lender, your old escrow account will be closed and you will receive a refund.
The new lender that you are refinancing with will open a new escrow account and will require two months’ reserves to avoid any shortfall.
Conclusion
It is exciting to know if you are receiving a refund as a homeowner. Escrow refunds are initiated only when you have access to funds in your escrow account in a financial year.
Every lender may have a different refund policy. If you are not sure about yours, get in touch with your lender to know their terms of refund and make sure that you keep an eye on your escrow balance which could be found on your monthly mortgage statements.
About Right of First Refusal (ROFR)
In a home buying process, various terms are used that the buyer and seller may be completely unaware of.
While these terms may be just legal words used in transactions, it is important to know their significance for both sellers and buyers. In this post, we will understand what is right of first refusal (ROFR) is in detail.
What Is the (ROFR) In Real Estate?
When considering real estate, the term right of first refusal (ROFR), also known as the first right of refusal, is a contractual right granted to potential parties that allows them to be the first buyer to put an offer on a given home.
If the ROFR buyer no longer wants to play the bidding war against other buyers, then the seller can accept other offers and can accept offers from other potential buyers.
If the buyer knows they are interested in the property, but it is not currently for sale, the ROFR clause may allow them to have the first right to purchase the property if the seller decides to put it up for sale.
Under this agreement, the seller must contact the potential buyer holding the ROFR and allow them to buy before they can accept another good-faith deal on the property from other potential buyers.
How Does ROFR Work?
A ROFR is negotiated before the owners put the property on sale. The holder of the right usually has a time limit in which the holder should begin the negotiation before the seller can communicate with other potential buyers for their offers.
If the holder of ROFR does not negotiate with the seller in the given time or declines to offer, the seller can start communicating and accepting offers from other potential buyers.
The first right of refusal often manifests itself in several ways. A real estate agent may find that you have a home that a particular buyer is interested to buy and ask if you would be open to the first right of refusal contract if the home comes up for sale.
The first right of refusal clause can also be used by landlords to lure the tenants by agreeing to provide the ROFR for the tenants if the landlord decides to sell the home.
What Are The Pros And Cons Of The Right Of First Refusal?
The Pros:
For a buyer, if you have the right of first refusal it allows you to buy a house without joining the competition in the free market.
It also provides an opportunity for the tenants who plan to purchase the property they are currently renting where they don’t have to move and gain equity at the same time.
For sellers, giving this right to a potential buyer confirms that you would have an offer when the seller decides to sell the home.
This means that the buyer most interested in the house will have the opportunity to purchase it, and will likely try to make an offer. It could give also provide benefits for tenants that are renting the current property.
The Cons:
For buyers, the ROFR can last only for a limited time in which they have to act. If the buyer with the right is unable to put an offer or negotiate with the seller within the time frame, they will lose this right and the seller would have the right to accept offers from other potential buyers.
For a seller, if the buyers holding the first right of refusal get the offer, the seller would not be in a position to accept offers from other potential buyers.
Conclusion
If you are a buyer or a seller to use a right of first refusal agreement, ensure that you are aware of the current housing market.
The ROFR may only be good in specific market conditions and you as a buyer or seller may want to get the best of the opportunity in a real estate transaction.
It is good to go through all the options while in a real estate transaction before entering into a ROFR clause.
About TRID
When you are looking to get a mortgage or refinance your existing one, as per the guidelines your lender needs to provide you with disclosures that help you as a borrower to understand the terms and cost of financing your home.
In this post, we will understand what is TILA-RESPA Integrated Disclosure (TRID) in detail.
What Is TRID?
TRID, also known as “Know before you owe”, is an acronym for the TILA-RESPA Integrated Disclosure rule. It became law as part of the Consumer Protection Act and Dodd-Frank Wall Street Reform.
Dodd-Frank Sections 1098 and 1100A require the appropriate regulator to issue forms and rules that require mortgage companies to combine disclosure information that consumers receive when they apply for a home mortgage loans under Truth in Lending (TILA) and settlement disclosure under the Real Estate Settlement Procedures Act (RESPA).
TILA-RESPA Integrated Disclosure is a set of guidelines imposed by the Consumer Financial Protection Bureau (CFPB) to close some of the gaps used by exploitative lenders to mislead borrowers.
The TRID rule determines what mortgage information a lender must provide to the consumer. This rule also defines the way banks and lenders can charge their fees and how they can be modified as the mortgage matures.
The rule helps the consumer to better understand the best mortgage loan options and to select the right lender.
As of 2015, all mortgage lenders must comply with the TIRD rule when offering a mortgage or providing a loan estimate to the borrower.
The reason why this rule is also called “Know Before You Owe” is because it contains information about fees, loans, and payments that consumers should read and understand before putting an offer to the seller or committing to refinancing the existing mortgage.
What Type Of Disclosures Are Included In TRID?
Under the mortgage TRID rule, the lenders are required to provide two types of disclosures as mentioned below.
Loan Estimate: A loan estimate is provided by the lender within three days from the date the borrower’s loan application is received. It includes the interest rates, payments, principal loan amount, and fees for the mortgage that the consumer qualifies for.
Loan estimates can change from the beginning of the mortgage process to the end of the mortgage process, but lenders cannot make significant changes to the terms of the mortgage and must provide these estimates in good faith during the pre-approval process.
You can use loan estimates from several competing mortgage companies to see how much home you can afford and who can offer the best mortgage terms.
If a lender provides you with a loan estimate does not mean that you cannot shop around and work with some other lender if the mortgage terms are competitive.
Closing Disclosure: Once all the loan requirements are fulfilled and you are ready to close on the loan, the lender is required to provide you with a closing disclosure three days prior to the closing date of your loan.
The closing disclosure will include the same information that was provided to you in the loan estimate. However, the numbers on the CD will be final and would not change unless there is a major change in circumstances.
The best practice is to compare your closing disclosure with the loan estimate that you received earlier.
If you see a change in the interest rate, principal loan amount, loan term, or additional fees, you should confront your loan officer and ask for an explanation for these changes.
How Does The Lender Comply With TRID Guidelines?
As a lender, you have to adhere to these guidelines when you receive an application from a potential borrower. Below mentioned are some important rules that the lender must follow.
Application Fee Waiver: Under these guidelines, mortgage lenders cannot charge you a fee before providing a loan estimate except a credit report fee that is used for checking your credit and obtaining a credit report.
Prompt Delivery of Loan Estimate: The lenders are required to provide the loan estimate to the loan applicant within three days from the date of application.
Contact Information: Lenders are required to provide contact information and a way to contact the lender when evaluating your credit.
Estimates and Disclosure Archives: Lenders must keep copies of their loan estimate for at least three years and closing disclosure for at least five years from the closing date.
Three-Day Waiting For Closing Disclosure: The closing disclosure would be provided by the lender three days prior to the closing date of your mortgage.
If there are any changes in the final CD, the lender should provide an updated one and wait for three more days before you can close on the loan.
Conclusion
As a borrower TRID guidelines can help you to protect yourself from unethical lending practices by the lenders and ensure that you receive the disclosures and estimates on time.
It will also provide you an opportunity to compare multiple estimates from competing lenders and help you choose the mortgage that is cost-effective and matches your need.
As a seller, you can anticipate the closing time so that you can plan your move accordingly.