Gabrielle Nemes, GRI, SRS, Auburn, WA

Two important changes were recently passed by Congress and then adopted by federal agencies that will now have an impact on how quickly -- and in some instances, for how much in closing and/or upfront costs -- home purchases can be closed. Technically designed to control lender inequities, these two new regulations have great impact on you, the buyer and the seller! Without commenting on whether these two new regulations are effective and well constructed, it's important to understand that closing a home purchase is just gonna take longer!

In the very recent past, it wasn't unheard of for a well-qualified buyer to make an offer on a home and close the sale within 3 weeks or so. Most transactions closed within 30 days. Not so much now, and here's why:

• Effective May 1, 2009, the laws regarding home appraisers changed, with the passing of the Home Valuation Code of Conduct (HVCC). FannieMae's interpretation of the regulation can be found here. FreddieMac's here.

On the surface, this law, originally initiated in New York, seems like a reasonable protection for buyers in that the appraisal process is supposed to now be more impartial. In reality, as agents we're finding that the process needed to complete a lender's requirements for appraisals is difficult and time consuming, pushing out the timeline to accomplish the appraisal up to two weeks or so! Adding in the fact that many lenders are also now requiring a 2nd appraisal, which may add yet another week or so or more, any purchase and sale agreement must allow for at least two extra weeks beyond that common 3-4 week period. Finally, as a Buyer, unless you waive your right, you have 3 days before closing to review the appraisal. ... Now we're up to, say, 4-5 week minimum for closing.

Oh by the way, guess who pays for the second appraisal should it be necessary? Not the lender, I guarantee you. The Buyer pays. Oh yes ... and if you're a seller committed to paying buyer closing costs through your contract, you may find that the request for closing costs is $400-$500 higher!

One more quick note here: the HVCC does not apply to VA or FHA loans, although I'm being told that many/most banks are just applying it straight across the board to all loan types.

• Effective on July 31, 2009, will be yet another regulation, the Housing and Economic Recovery Act (HERA), designed to protect you, the consumer, but also with an impact on time needed for closing. Of course, none of us has yet to see this in action.

HERA works with the Truth in Lending Act (TILA), designed to inform the consumer about all costs and fees involved with placing a loan.

One of the HERA requirements surrounds when a lender can collect upfront fees, such as paying for a credit report (which can be collected at the time of application), or paying, say, for that appraisal, which can't be collected until at least three days after application. If you make application by phone, you'll then have to march down to your lender's office the day after receiving your initial disclosures (they have seven days) to pay any other fees.

One of the biggest requirements, however, has to do with when a lender must disclose changes affecting the Annual Percentage Rate (APR) of the loan. Up to now, most lenders with whom I've worked, provide a buyer with a Good Faith Estimate (GFE) within a day or two after taking a loan application. That GFE was rarely updated throughout the loan process unless the interest rate substantially changed. With HERA, however, the disclosures made by a lender must be updated if the APR changes as little as .125%. Whew! Remembering that the APR includes not only the loan's interest rate, but all the costs of creating the loan (loan origination fees, fees charged by a closing/escrow agent, bank fees, wiring fees, etc.), it's easy to see why the HERA requirement will add yet another layer of time complexity in closing a sale.

In addition, HERA requires that a Buyer have three days prior to closing to review the final disclosure, commonly referred to as the HUD statement around here.

So ... here's the deal: If you're writing an offer to purchase, let's be realistic and work toward a 45 day closing as a standard practice. If you're a seller, try to be patient. Much of the delay in closing, now, may have little to do with the buyer's ability to perform. It could just be the lender trying to be sure that all of these new requirements are met.

Agents in the greater Seattle/Tacoma area tend to travel around a bit. Me too!

After all within a 10-15 mile radius of my home ... or maybe about 30-35 minutes of drive time might be a better gauge ... I can touch, let's see, 19 cities:

Auburn (my home town), Maple Valley (my office location), Kent (my previous home's location), Renton (my high school years), south Seattle (where I grew up), Issaquah, Covington, Federal Way, Edgewood, Jovita, Sumner, Bonney Lake, Lake Tapps, Milton, Fife, Tacoma, Des Moines, Puyallup. Even Bellevue is only about 35 minutes away in reasonable traffic. And I'll bet I'm forgetting a few!

So ... when asked where I work, I say southeast King County and northeast Tacoma.

I wonder if anyone but me knows where that is?

I love a street fair ... I mean I love browsing through all the booths, bantering with the folks behind their respective tables, and occasionally finding a real nugget that absolutely MUST come home.

And then there are all the goodies. Yummmmmm .... grilled corn on the cob, churros, all the various foods on a stick. I know ... the calories are enormous, but I figure by the time I've navigated the mile or so of booths, that perhaps I can walk off ... errrr ... half of a stick of something?

Anyway, Seattle's six-week-long summer festival really got going yesterday. The Pirates came to town yesterday, which means it's officially Seafair time!

In an effort to make your weekend shopping plans a little easier, here's the schedule of street fairs--hopefully I haven't missed any. You may want to visit the Seafair site to find other events -- and there are a LOT of them!

I'm headed down to Kent Cornucopia days today -- maybe I'll see you there?

If you're wondering, really, where your home price is, take a look at this little chart. Here you can see that the average closed sale home price in Auburn at the end of June is still below average price as it was in 2005! As you can see also, prices continue to fall in the area. Here you can see the steep climb buyers paid for homes during 2005 and how they basically leveled off until June of 2008, when they took a nosedive.

Graphs such as this one tell the overall story vividly.

Every area is different, every neighborhood is different and every home is different. But be careful! One danger in focusing too much on a chart of this type is that it's ONE piece of information used when considering the value of your home when it's time for sale -- or perhaps when it's time to purchase. But it's an important consideration and one every great agent uses.

One of our family's favorite events takes place every July 3rd at Emerald Downs in Auburn.

Now, the horse racing is great ... and if you bet more than $2 a race, you just might make more than my usual 20-cents! (actually, that's pretty good for me ... I'm usually rooting for the horse that comes in dead last).

After the races, however, is the best part -- Emerald Downs hosts one of the most spectacular fireworks events we've ever seen! I don't believe there's any admission charge to get in for just the fireworks show, but it IS crowded. (Admission to the races is $7 for each adult, with kids under 17 free.) You'll want to bring your blanket and spread out on the lawn to watch.

The show lasts for, oh maybe 20 minutes or so. And it's amazing. And since it's held on the 3rd, you can still do your scheduled fireworks picnic at home on the 4th without breaking tradition.

Happy Fourth of July! Hope to see you at the show ... I've saved up $20 of $2 bills. I'm set. After tomorrow's races I may never have to work again.