Stockton has been one of the hardest hit foreclosure markets in the nation. A hot bed for the 203k loan guarantee program yet most of the homes are going to investors who pay "all cash" and that appears to be demoralizing the local non profits and buyers in general.
Sellers "wake up". If you have a home that needs work you DON'T have to give it away. The FHA 203k offers that you keep turning down because your agent doesn't have a clue is costing you big time.
Agents "wake up" to the 203k loan program if you are the sellers agent what is wrong with taking "all cash" to the seller from a prospective home buyer? NOTHING. You can get a higher sales price in many cases from a prospective buyer using the FHA or HomeStyle loan programs, your commission is therefore higher.
A buyer who intends to live in the home is actually better for the community as well. There are so many plusses for selling to the buyer who wants to live in the home.
"All cash to the seller" letter is used to accompany the offer, it is presented or incorporated into the "pre qual" letter that so many of you require with the offer, it merely states that the borrower is going to be using the FHA 203k program to purchase this hom and that they will be getting bids for the work that is needed. The work will be done after it closes escrow and at the cost of the buyer. The reason for getting those bids is so the borrower can incorporate the cost of those repairs into the loan.
This is a simple thing and doesn't require any more effort on the seller's part. The buyers agent will let the HUD consultant, and prospective contractors into the home for bidding purposes. This is all it is, no more, no less. The health and safety issues will be resolved, the wants or "wish list" of the buyers will be incorporated into the "scope of work" and the loan can move forward.
What about the lenght of time to close this loan, Mike? A 203k loan can close as fast as a 203b loan or standard FHA loan. There is no reason that it should take longer. Why do they say it takes from 45-60 days in many cases? Who knows. The process by most lenders on a 203b loan takes about 28 days. If you use a 203k consultant from day one, their work is all that is needed to be added to the 203b paperwork to fly, then about 1-2 weeks into the process you will typically have your "construction component" back in the lenders hand and the loan can go to underwriting. The loan should close in 28-30 days. Most lenders tell you 45-60 days contemplating trouble in advance of getting information from the borrower and it just makes sense that they would want to exceed your expectation rather than promise 28 days and take 35. Find a lender who knows the FHA 203k in your neighborhood like Mary Jo Costa Stockton, CA
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