It’s about to take longer to close your Newport Beach CA home sale

There is more bad news on the over-regulation front. If you are about to purchase a Newport Beach CA home for sale, you will find that there is the great potential that an extra 7-10 business days will be needed to close the deal.

You may have heard of a new regulation, known as H.E.R.A. (Housing Economic Recovery Act), that requires consumers be given extra days to review the initial loan disclosures at the beginning of the transaction. If the interest rate APR changes more than .125% from the initial Good Faith Estimate, then a full 7 business days must go by before you can sign your loan documents. Given the volatility of mortgage rates right now, it doesn’t take much to move the needle by that much or more.

I don’t want to get into all the details of H.E.R.A. as it can be a little confusing. The bottom line is that there will be more documents to sign, more trees will be killed to print all those extra documents (what we need is a Paperwork Reduction Act in the Real Estate and Mortgage industries, not MORE paperwork) and potential delays to closing.

I typically recommend 30 days to close a conforming, straight forward transaction, 45 days to close a FHA loan, and longer for the tricky self employed or luxury buyers. Until we see how this shakes out I’m recommending a few more days to get your new Newport Beach CA home sale closed. It is just NOT worth the stress to try and close earlier than that. We are all at the mercy of the lenders and it doesn’t do anyone (Buyer, Seller, Realtors, Mortgage Planner, Processor, Underwriter, etc.) to try a quick close.

One last point to remember is first time buyers need to close by December 1, 2009 in order to receive the $8,000 tax credit. We can forecast that there will probably be a surge in transactions leading up to that, causing further delays. Don’t think you’ll be able to get under contract in November for a FHA loan and have it close by 12/1/09. It might happen, but don’t bank on it. Give your self time to make for smooth, stress free transaction and make the transition to that Newport Beach CA home a great experience!

By the way, I work exclusively on referrals. The best part of that is that the money I save in advertising can be filtered back to my clients in the form of lower fees. So if you or someone you know is looking for Newport Beach CA homes for sale and need help putting together a plan, then give me a call or shoot me an email. Feel free to forward this blog post to anyone you think it would help.

Thank you!