The 203k consultation is a process not an absolute
The consulting process includes a site visit for the "initial walk through" where the FHA required items are discovered, then added to the buyers "wish list" to create a "SOR" (scope of renovation) or "SOW" (scope of work) which becomes the baises for the draw inpections.
We normally will have the initial or 1st draft of this document 3-5 days after we viist the property depending on the amount of work. You can see that a $10,000 - $30,000 project would take much less time to complete than a $300,000 - $400,000 project.
Once we get the 1st draft to the borrower they review the document and verify that all of the work they want to do is included in the paperwork. If not or if they want to remove some of the items that may not be desired. IN any case changes are made and then conveyed back to the consultant and the final document is ready to go to contractors for bid. The drafts all include our bid numbers. Once the scope of work has been nailed down the job specs are printed without any prices and sent to the contractors for bidding on the project.
Once the bids come back the borrower chooses the contractor with the aid of the consultant. It is important to know that many times the borrower comes to the project with their own contractor which is perfectly okay. We still have our bid to compare and we may send to another contractor just to validate their contractor's bid.
Last year we had one that we bid $159,000 and the client's contractor then bid it at $298,000. This is not the normal but it emphasises how important our job is as a consultant. By having our bid in hand when the bids come in from the contractor it becomes very apparent when the client is being ripped off. By the way the second bid came in at $161,000.
It should also be noted that if her contractor had come in at $170,000 it could be rationalized as "resonable" and their contract can be used even though they are not low. It is not always the best route to go with the lowest bid. In some cases a contractor may miss something and underbid the job... this is dangerous as during the course of construction, they make make the realizaiton and disappear, never to be seen again and there isn't enough money in the project to get another contractor to complete the work.
We have helped close many 203k loans in 21-30 days. You just need a team and you need to let it function.
downtown 10-14-2023
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