Archive for December 7, 2011

8 Things to Avoid When Seeking a Home Loan.

1. Don’t make ANY late payments!

Some have the false belief that once they have applied for and been pre-approved for a loan, they don’t need to concern themselves with staying current on all payments. Wrong! If you have a late payment, even on a $10.00 monthly credit card it could mean the difference between YES and NO on your loan. Late payments on a Mortgage or Rent can mean a Decline on a home loan for 12 to 24 months!

2. Don’t buy or lease an auto!

Lenders look carefully at your monthly debt obligations. A large payment such as a car lease or purchase can greatly impact those ratios and prevent you from qualifying for a home loan.

3. Don’t move assets from one bank account to another!

These transfers show up as new deposits and complicate the application process, as you must then disclose and document the source of funds for each new account. The lender can verify each account as it currently exists. You can consolidate your accounts later if you need to. If you are getting funds from a gift, the transfer of the funds has to be done and documented a certain way to be used towards down payment and costs.

4. Don’t change jobs if you can help it!

A new job may involve a probation period, which must be satisfied before income from the new job can be considered for qualifying purposes. If your job is Part time or Temporary, this is very important information to disclose up-front.

5. Don’t buy new furniture or major appliances for your “new

If the new purchases increase the amount of debt you are responsible for on a monthly basis, there is the possibility this may disqualify you from getting the loan, or cut down on the available funds you need to meet closing costs. New furniture, refrigerator or bed does you zero good if the house you would like to buy doesn’t end up being yours.

 6. Don’t run a Credit report on yourself or have anyone pull
your credit!

This will show as an inquiry on your lender’s credit report and could lower your Credit score 7-10 points per credit pull! If you are approved for a “score driven” loan (one that requires a certain score to qualify) you may have just lost your approval. Loans that do not have score requirements need inquiries explained in writing and/or

 7. Don’t attempt to consolidate bills before speaking with
your lender!

Moving around Credit balances can destroy your credit score! Ask first before you change any balances around.

8. Don’t pack or ship information needed for the loan

Important paperwork such as W-2 forms, divorce decrees, and tax returns should not be sent with your household goods.  Duplicate copies take weeks to obtain, and could stall the closing date on your transaction.


If you would like more information about obtaining a home loan, please go to our Calendar/Reservations page and sign up for one of our FREE workshops.


Who’s Representing Me?

Often during a real estate transaction, there can be some confusion as to who is representing the buyer.  In the state of Washington there are four types of agency: listing, selling, non and dual.  The first two, listing and selling agency, tend to be pretty straight forward.  The listing agent represents the seller, and the selling agent represents the buyer (I know, counter-intuitive).  There are also different types of sub-agency within the listing category such as exclusive/non-exclusive, but we will save these for a different post and focus on the buyer side for now.  The other two types of agency can sometimes become confusing to the general consumer.  They are non-agency and dual agency.  Non-agency essentially means that the buyer has no representation, and are representing themselves.  Dual agency means that a single real estate agent is actually representing both parties (buyer and seller).  On the surface, these definitions are not confusing.  However, the confusion usually arises when the buyer does not understand whether they are in a selling agency situation, non-agency situation, or dual agency situation.

Let’s use an open house as an example.  Pretend you have been pre-approved by a lender, and have already hired a real estate agent to represent you.  You drive by an open house on Sunday and decide to stop in and check the place out.  The house actually turns out to be exactly what you want and within your pre-approval amount.  So you say to the listing agent holding the open house, “This house is perfect, we’d like to write an offer”.  Hopefully, the agent would ask if you have representation, at which point you would respond, “yes, we’ll have our agent get in touch with you”.  Simple enough, right??

It’s when you find yourself in this situation but haven’t yet hired representation that you may step into the realm of non-agency or dual agency.  Imagine yourself in the aforementioned scenario, but instead you tell the listing agent that you currently do not have an agent.  They may respond with something to the tune of, “No problem.  I’d be happy to present your offer to the seller.  However, please understand through this entire process my sole obligation is to my client, the seller.  So any information you decide to share with me, you should expect me to relay it to the seller”.  This scenario would place you in a non-agency roll, as the listing agent made it very clear their sole obligation was to the seller.

Now, we’ll go back to the same example, but instead when you tell the listing agent you have no representation, their response is, “No problem.  The state of Washington actually allows me to represent both you and the seller simultaneously.  So I can help you put an offer together, and then present it to the seller”.  This is known as dual agency, as the listing agent is representing both buyer and seller. (Whether or not this is a good idea for both parties will be addressed in a future post.)

Again, the confusion often stems from the fact that the type of agency isn’t always so clear.  The actual conversation can sometimes play out like this, Buyer: “We love the house and want to write an offer”.  Listing agent: “Hurray, I’ve got a blank contract right here.  Let’s sit down and put it together”.  There isn’t always the clarification of who, if anyone, is representing the buyer.  It’s possible that the buyer doesn’t even realize that if they have already hired an agent, through this scenario they have actually written their agent out of the equation.

I’m definitely not saying that real estate agents are so shady they would intentionally misinform the buyer.  Nor am I saying that a buyer would intentionally step into a negotiation without representation.  But often, the buyer is so excited they found the perfect house, and the listing agent is so excited to get an offer, things can get lost in translation.  So if you ever find yourself in this situation, be sure to ask, “Who’s representing me?”.  If you would like more information about buyer agency, or more information about buying a home in general, go to our Calendar/Reservations page and sign up for one of our FREE workshops.