Choosing the Right Closing Date Can Make a Difference
Sep 06, 2016 | Realtor Resources | Share:
Your clients are planning to close by the end of the month; but delays have put it in jeopardy. You are now in a bind to find a new closing table. Does this sound familiar?
Can you save this closing? Is it possible to squeeze us in this month? South Oak Title is asked these questions often and our response is always yes. In fact, we squeeze in closings every day toward the end of the month that were supposed to happen elsewhere. That's not a knock against our colleagues and friends at other title and closing offices because we know closing secretaries everywhere work hard and commit long hours to your closing.
Our industry is unique and has been conditioned for the majority of business (closings) to happen the last week of the month. Also a fact: Underwriters and processors work tirelessly to get closing packages in time for closings, and at the end of the month there can be a log jam of loan packages and closings making it tough to complete everything in a short timeframe. It's almost like working in an emergency room with too many patients and not enough nurses. But it doesn’t have to be that way.
When selecting a closing date, consider how the following will impact the closing:
- New Documents and Longer Processes. The new Closing Disclosure takes longer to prepare and get approved than the old HUD1. TRID also created the new Borrower CD from previous lender documents like the GFE, TIL and HUD; however the new Closing Disclosure takes greater coordination between the lender and closing coordinator. Simply put, this five- to six-page document is more like a book report than a spreadsheet and cannot be thrown together in a flash. Along with the Borrower CD, a separate Seller CD and Combined Settlement Statement have to be prepared for financed residential real estate purchases . So the previous HUD1 settlement statement has become three documents that require more input and oversight from the closing coordinator.
- Varying Lender Systems. Each lender has their own process for managing the production and delivery of CDs and loan packages. The CDs and closing packages are now mostly done through online portals. Each lender's portal is different, requiring training time, a different login and password, submission process, etc. making package preparation more labor-intensive for the closing coordinators.
- New Disclosure Rules. The new disclosure rules require that the buyer receive the CD for review at least three days prior to the closing. The CD’s also need finalization at the time of closing. When multiple closings are set for the last week of the month all of the CDs must be completed those 3 days prior as well, and when one gets missed, you have a real dilemma. In addition, closing coordinators and loan processors are trying to look ahead and prepare CDs for the upcoming week all while trying to manage the heavy load of closings at the end of the month.
Breathe Easy and Close in the Middle
Be proactive! If there is a date and time your client is able to close during the first three weeks of the month, the closing is much more likely to happen on time and without a hitch than those last few days of the month. As a real estate agent you have the greatest ability to help guide your client through the closing date selection process.
As with everyone, lenders and closing coordinators work best when there is not the extreme pressure and time crunch to get work done last minute. Hopefully, this knowledge helps you avoid putting your closings in jeopardy and allows everyone to breathe easy. In the end we are all on the same team trying to reach the same goal…a smooth closing. Little things like picking a closing date in the middle of the month can make your clients experience exponentially better.