One thing is for certain if you expect to write a competitive offer in the San Francisco market: Get fully preapproved for a loan before you start hitting the open house circuit.
Prospective buyers would traditionally chat with a lender rep, get an idea as to what they could afford based on basic financial details and then submit all the financials after getting into contract.
However, that won’t fly in San Francisco—or most of The Bay Area—these days. Limited inventory and high-buyer demand translate into routinely competitive, multiple-offer situations that require short (or no) loan contingency timeframes. Winning offers rarely happen for buyers who need a loan contingency timeframe that accommodates underwriting review of their financials after they go into contract.
So if you’re a serious buyer, suck it up and get your financials together for underwriting approval before you start making appointments with your agent to see properties. Here’s a list of the docs you’ll most likely need to pull together:
1. Two most recent paystubs
2. W-2s for last two years
3. Two most recent statements for all checking, savings, CD, money market and/or securities brokerage accounts
4. Most recent statement for all retirement accounts (IRAs, SEP-IRAs, 401ks)
5. Most recent statement of stock options, employee stock option purchase plans, etc. if part of the down payment or closing costs of a purchase
6. 1040s for last two years (federal tax returns, all pages)
7. Mortgage, real estate tax and insurance premium statements for all properties currently owned
8. Leases on all rental properties you may own
9. Divorce decree and settlement statement, if applicable
10. Name, address and phone number for your landlord covering past 24 months
11. Twelve most recent cancelled rent payment checks or bank statements if your landlord is a private party
12. Copy of your state-issued driver’s license or passport and your date of birth
13. Copy of current mortgage statements on all outstanding mortgages.
Your lender will submit your docs to underwriting, leaving your future purchase contract subject only to property-related details. You’ll then know how competitive you can be when it comes to the loan contingency.
If you’d like to talk more about the process or need local lender recommendations, give me a shout at firstname.lastname@example.org | 415.823.4656 and I can point you in the right direction.