(Originally Posted on my Housing and Economics Blog on March 15 2016)
The days required to close a real estate transaction have increased slightly. However, most anticipated this would happen with the introduction of TRID. The 30 day close seems to be gone and the days of the 45 day close are here.
According to a NAR survey of real estate transactions that closed in January 2016 the median days to close went up from 36 days in July 2015 when NAR first started tracking this information to 42 days. The average rose from 41 to 46 days in the same time period.
On October 3, 2015 The Consumer Financial Protection Bureau (CFPB) introduced the “Truth In Lending Disclosure” (TRID) which integrated the Truth in Lending Act (TILA) and (RESPA) Real Estate Settlement Procedures Act. TRID is intended to provide consumers with a helpful discloser to understand the key features, costs, and risks associated with a mortgage. TRID basically replaced the GFE (Good Faith Estimate) with what is supposed to be a more accurate and detailed document. It was anticipated that the release of TRID would certainly slow down transactions. According to a NAR survey of transactions that closed between November 2015 and January 2016 40% were late in closing due to “Issues related to obtaining financing” which would include TRID. Astute agents anticipating the TRID delays crafted contracts that contained a 45-day close minimum which lessened the anticipated TRID delays.
The remaining cause for delays in closing are the usual suspects in real estate transactions.