I have been selling real estate in Rhode Island for thirty-four years and 2009 will probably go down in my book as the most challenging.  Everyday, I work to untangle a negotiation that is stuck or a problem that needs to be solved. 
Our typical spring market generally begins in March and ends in June. The high-end typically is very quiet in the city over the summer with many buyers and sellers leaving for second homes and vacation time with loved ones.  In the suburbs, most clients want to be settled into their new home by June so that their children get a chance to meet the neighborhood kids before the school year begins.  But this year the spring market got pushed back a quarter and the summer seems to be atypically busy. 
President Obama’s housing stimulus plan has allowed first-time home buyers the opportunity to purchase a home and receive up to an $8,000 tax credit.  The closing has to take place by November 30, 2009 so agents are busy seven days a week showing properties in the lower price ranges. 
So, I understand why the lower ranges in the real estate market are coming alive, but why all of a sudden in the dead of summer is the high end beginning to have activity in some areas?  The East Side and Barrington seem to be showing signs of coming out of their paralyzed high-end slumber.  A handful has gone under agreement and is set to close before the end of August. 
Once this happens, other buyers will follow because real estate professionals will have some comparable sales to be able to price new listings against or re-price listings that have been sitting on the market.  Appraisers will be able to justify sales prices for the banks because they will have comps.  It will be easier for sellers to understand why the competition sold.  Was it price, condition, staging, marketing or a combination of all of them?

This Week’s Real Estate Insight
It is too early to say that we are coming out of this unprecedented real estate cycle but the good news is that buyers and sellers understand the market better.  The media isn’t pummeling us hourly with bad real estate news.  Everyday, you can find an article on an area of the country that is starting to see real estate activity.  I am happy to report that like Sleeping Beauty awakening from her long slumber, we may be seeing the beginning of a slow awakening too.

The Federal Reserve Board recently amended Regulation Z to conform to the requirements of the Mortgage Disclosure Improvement Act of 2008.  The purpose of this amendment is to let consumers to know, prior to closing, what their closing fees and charges will be. These changes are good for borrowers, but if you are not prepared, issues may arise during your closing that could impact your closing date.

This amendment applies to primary and vacation homes. It also does not allow a lender to charge any fees, other than for a credit check for a consumer prior to the consumer being provided with the initial Truth-in-Lending Disclosure.

• A lender must provide a good faith estimate within three business days after receiving a buyer’s application for a mortgage.  Business days include Monday - Saturday, excluding Sundays and legal holidays.
• A lender must wait seven business days after providing the good faith estimate before a closing can take place.
• If a lender needs to make more than a minor change to the APR, defined as any change more than 1/8%, the lender must provide new disclosures to the buyer no later than three business days before closing.
• A buyer can waive these waiting periods only for a personal financial emergency.

Below is a list of items you can do to help prevent any mishaps. 

• Schedule to have a longer closing.  This may become standard while everybody gets used to the changes.  Plan for a few extra days. 

• Become familiar with the fees that affect the APR, there can be other fees as well, so be sure to talk to your loan officer about this.  Your Good Faith Estimate will indicate whether a fee is being calculated as a Prepaid Finance Charge.  If you notice that some fees are not marked that should be marked, contact your lender immediately. 

• Watch your interest rate.  Almost any change to your interest rate will trigger an APR change of more than .125% which would then require an new re-disclosure

This Week’s Real Estate Insight:

While the mortgage loan originator is responsible for complying with the above dates, Consumers and REALTORS should pay attention to contingency and closing dates.  If the lender revises APR too close to the closing, the closing date will need to be postponed to allow for the required review.  If the closing date is “time is of the essence” for either the buyer or the seller, make sure to keep track of the mortgage loan originator to avoid delays.