Step 2: Get Your Financing In Order

Getting Your Financing In Order

We Divas know it is tough to talk about money. But we have to do it. Now that we are in a post-recession era the whole world has changed when it comes to getting financing for a home. Lending is super restrictive and now many of our Diva Dwellers to have “skin in the game,” meaning YOU NEED CASH: cash to buy or at least cash as a down payment.

The first step to purchasing a home is the pre-approval process. In today’s volatile lending market, being pre-approved is a must. What does being pre-approved really mean? It means that based on your loan application, financial status, and credit scores a lender has given a true commitment to financing your loan up to a certain price. In general, once you are pre-approved, you are almost certain of getting a loan provided there are no major changes in your financial status (i.e. loss of job or lower credit scores). Once you’re pre-approved, it’s time to find the right property at the right price for you!

What You Will Need to Apply for a Mortgage: The Basics

• Two most recent pay stubs
• W-2’s for the last 2 years
• Federal tax return for last 2 years
• Last two months of bank statements
• Any long-term debt information (i.e. credit cards, auto loans, other mortgages, etc.)
• Statements on other investment portfolios (i.e. retirement accounts, stocks, bonds, mutual funds)

Other Potential Documents Needed:

• If using income from rental property, provide rental agreements with 2 years of tax returns
• If you will be using money from a home sale for a purchase, you will need a copy of the purchase and sale on your home and a final closing statement (HUD 1)
• If self-employed, you will need 2 years of taxes and profit and loss statements
• If you are receiving funds from a family member for a home you will need a gift letter from that family member and verification of that check being deposited in your account

Maintaining and Improving Credit Scores and Buying Potential
It’s not uncommon for most buyers to be unaware of their credit scores or credit history, but your scores are a major determinant in getting a mortgage. Although they are not the only criteria used to determine whether you will get a loan, the lower your scores the less likely it is that you will be approved for a loan by the top lenders with the best interest rates. Below are some quick tips to improving your credit scores before you apply for a loan and maintaining good scores during the buying process.

• Avoid applying for any new credit cards or increased limits on current cards.
• Pay off and/or close out any unused credit cards.
• Make sure all bills are paid on time or at least within the grace period.
• Never go over 30 days past due on any accounts.
• Follow up on old accounts that may have been held with a past spouse or partner to make sure you are no longer on that account.
• Keep a low balance on all active credit accounts.
• Do not apply for any loans that are not related to your home purchase (i.e. car loan).
• Talk to a mortgage broker before opening an account at a debt consolidation service and if you already have an account, consider closing it if at all possible. Although these services are very helpful to those struggling to manage their debt, they are often viewed poorly by lenders and can knock down your credit score by a considerable amount.

Feeling like you need some help slogging through the finances? Contact the Divas below and we’d love to help you out. We also work with the worlds best mortgage lenders!

Step 3: Writing the Offer + Contract Details 

Everyone Needs a Place to Be Themselves

So you found a house you love, you can afford it, and all of your dreams will come true if you own this home? Well now we have to write the offer
Regardless if you are a first time home buyer or someone who has bought and sold homes all over the country, we will sit down with you and go into every detail about the offer paperwork. Every home is different. Every offer is different. And based on the situation different paperwork will be used to make sure you have the winning offer. Below are a few key points we need to talk about before we sit down to write the offer. 

Step 4: The Big Inspection 

Sexy Sewer Inspector Aaron

Team Diva is a big believer that you, as the homeowner, should be empowered to make a good decision about the overall condition of the home. However, our overall assumption is that most homeowners are unfamiliar on the inner workings of their home. You, as the buyer, should learn as much as you can about the home, how to maintain it for the long term, how to make improvements, and more importantly, know what is going on in the surrounding neighborhoods.

Check out our blog post to learn how you can be one of the savviest home buyers in the market »

Hire a Professional Home Inspector: The number one way to find out if your new Diva Dwelling is ready for you is through the inspection process. Hire a licensed, bonded and experienced professional. Seriously – do not hire someone who has never built a house before. What do they know? We have a list of top tiered inspectors that we can recommend – just ask! The cost for an inspection can range from $450 all the way up to $1,000 depending on the size and age of the home. The buyer is responsible for paying for the inspection at the time that it occurs.

Reviewing the Resale Certificate and Home Owners Association (Condo Only)
The resale certificate is a summary of everything that is contained in the condo package. It indicates what your monthly unit dues are going to run you, any pending assessments/work coming up in the near future, and all of the other inner workings of your new condo. In a nut shell the HOA review can be even more important than the inspection. Become one of the smartest condo buyers in the market buy knowing exactly how a good building manages itself.

Read all about it in our massive blog post about HOA/Resale Certificates»

Now That You Know What is Going On in Your Home You Can Respond to the Inspection
You have reviewed everything with Team Diva, we have bids for any repairs that may be needed, and now we are set to go with a response to the seller. Here are the buyer’s options:

1. Approve the Inspection: Best Diva Dwelling ever!
2. Disapprove the Inspection and Cancel the Transaction: These pink boots were made for walking from that dump of a house. What were we thinking?
3. Request Additional Inspections: Wait – we found that the sewer line has a break and needs a repair. We need to take extra time to find out what is wrong with the home and come up with a solution.
4. Approve With Modifications: This is the more typical response. There are many different approaches to take, but typically we request additional money towards your closing costs to do the repairs. Or if it is major issue like a roof or a foundation we ask for the seller to pay for the item before closing. Short Sales and Foreclosures are a different animal in getting resolution for these type of transactions.

The home inspection is our favorite part of the transaction process. It is where we see the biggest transition in our Diva Dwellers from going from a renter to becoming a full-fledged homeowner. It is always exciting!

Step 5: Title, Escrow, and Closing

Lots of windows keep the place bright

The search and inspection time frames are always fun, intense, and chock-full with excitement as a Diva Dweller Buyer. But after we are through the action oriented phase, your “transaction” goes to Escrow, Title, and the Lender. As a Diva Dweller Buyer it’s hard to not feel like nothing is happening, because tons of stuff is always in the works even after the “fun” part.

Title
Title insurance protects your right to the property once you have purchased the home. Reviewing the title is one of your  main contingencies that is part of every contract. Diva Dweller buyers have five days from receipt to review the title report. Most of the time the report is clean and you have full access to your home and the land, but on rare moments we have come across really weird and crazy situations. To make sure this does not happen to you it is good to understand the following items:

Escrow
First off, who and what is Escrow? Escrow is the the neutral third party that divides up funds between the buyer, seller, lenders, real estate companies, and other lien holders, while recording the deed with the county. Basically – Escrow consists of the final peeps in the buying process. Items to keep you on top of the closing process:

• Complete the Disclosure Statement and return to Escrow as soon as you can.
• Work with Escrow on your signing date. Typically it will occur in their offices during business hours, two days before closing.
• Prepare funds for down payment and closing costs in the form of an electronic wire or cashiers check. Make sure those funds are available at least 10 days before closing.

Closing
You have seen the movies and read online about “closing” day. The typical image is that everyone is around the table signing paperwork, your lender shows up with a suitcase of cash, and at the end of the day you have they keys to your new house. Well – the truth of the matter is far from this scenario. The last three days before closing is the most hectic part of the process due to the number of entities that are involved. You have every player in the process moving paperwork and money around. The Divas’ job in this moment is to make sure everything goes smoothly and you are well taken care of in the process. Here are a few things to keep on your radar:

• The buyer signs the paperwork with the Escrow officer about 2-3 days in advance of closing.
• The lender wires the money once they have received the originally signed documents.
• Your title is recorded with the county.
• And after all of that you get the keys at around 5:00 PM on closing day.

Whew now you get the keys. Ok – are you ready to meet with an awesome person at Team Diva?

Want to Be a Baller in Real Estate?

Becoming a Diva Dweller is Awesome

Ok – all joking aside our Diva Dwellers really are the smartest in the industry. Diva Dwellers take the time to find what is right for them, in a neighborhood they love, and know when to pounce on the right opportunity. The main reason is that unlike a lot of Real Estate pros in the industry, the Divas and their team members spend a ton of time with our Diva Dwellers. We have a very intensive intake process, awesome blogs that educate the Diva Dweller through the process, and more importantly we just like to make the home buying experience as fun as possible.

Download the Diva Dweller Buyer’s packet and become the smartest buyer in all of Seattle »