Paying attention to detail early on will save time and avoid the items that cause delays; extensions, addendum, and relationship management with the clients and all parties involved.
Below are the details of the lender submission process. To help educate the home buyer and prepare them for a clean transaction, see below how to submit your accepted offer to the lender.
File Contacts Sheet
This is a critical step as you have been in conversation with the listing agent. We need all file contact information complete so we can move the transaction forward. We cannot send a file to loan underwriting without Title Work. Many times I will receive a purchase agreement and the listing agent nor title company is identified. One may send a listing ticket, but oftentimes it just lists Agent’s office phone. Also, there is rarely an email address on the listing ticket. At times it will take several days for the agent or their assistant to return a call to obtain Title or other contact info. This alone can save days a transaction.
This is a critical step in double checking all the signature pages, making sure it is legible and all pages are in order. Make sure the FHA Amendatory Clause is attached. The most common oversight is missing signatures or initials, mailing address not matching the USPS (United States Postal Service) and if government financing, FHA Amendatory Clause are missing or unsigned by all parties
These are important as an addendum will supersede the purchase agreement. We often see bank-owned property addendums coming back with the purchase offer and it is completely different than the original purchase agreement.
EMD – Earnest Money Deposit
This is one of the most problematic items of concern which will cause delays in the loan process and enormous paper trails in loan underwriting. These earnest money deposits MUST COME FROM the buyer’s account and own funds. Also, these funds must come from one listed on the loan application. If at the time of offer your client did not have their checkbook and Mom wrote the check, this will not be approved by underwriting. It would be treated as a gift. Now more paper trails are established and documentation from Mom will have to be gathered. If this is conventional financing remember that 3% of the purchase price must be from the borrower’s own funds. If gift funds are added to the borrowers account this amount is subtracted from what already is in the account and now could result in a loan denial due to insufficient seasoned funds.
It is always a bonus to have a copy of the listing ticket. We generally ask for these when a potential offer is to be made on a home. This breaks down the winter, summer taxes and allows me to calculate a monthly payment and cash to close for your client. This way when an offer is accepted, there are no surprises to the client. Other pertinent information is on the listing ticket that we use is the Well and Septic information as this could deem a separate inspection or a water test, thus adding time to the transaction. if this information is discovered later in the transaction, it may or could cause delays and costly surprises to your client. Again very crucial to the submission package.
Property Scrub Sheet
This is the most critical information you could provide to assure there will be no surprises as we move forward. Discovering these items later can or will cause delays, switching loan programs and or down payments, monthly payments or cash to close. As you have scheduled your inspection, we are filtering through this data to make sure the loan is set up properly, cash to close has been verified and your client is aware of everything before ordering the appraisal. This list can be downloaded to the right but I will highlight the critical questions.
- Latest Summer and latest winter taxes
- Homesteaded or non-homesteaded if non-homesteaded is it on the winter or summer tax bill?
- What would the homesteaded taxes?
- Any special assessments – Buyer will assume or will be paid by the seller
- Property type? Single-family, Site condo?
- Attached condo? Condos are very difficult and the entire complex must be approved.
- Seller concessions amount if any
- Association dues monthly or annually
- Only the names on the mortgage application are on the Purchase Agreement
- EMD comes from one named on the Purchase Agreement. If not check with me.
- Seller pays for Title Owners Policy – Buyer pays for Title Owners Policy – This will affect cash to close
- Seller pays transfer taxes or will the buyer be responsible (Bank-Owned homes the buyer will often pay)
- Property flip? Meaning the home has transferred ownership in the last 12 months. Could require a 2nd appraisal
- City water or well water? It could require additional inspections or tests.
- Foreclosure, short sale, vacant?
- Waterfront or new construction? This will require a mortgage survey that must be ordered.
Download the Property Scrub Sheet
Taking the steps to ensure a smooth process and build our business by quality referrals.