A seller’s agent should know that a 203k buyer can get a loan up to 110% of the appraised value after the rehab is complete. To get the most out of a property for your seller you should know the cost to repair and bring the property to the HUD Minimum Property Standards (MPS).
How can you do that? Hire a 203k consultant to perform a ‘feasibility analysis’. You can estimate the after-improved value for the purpose of this segment of the process. If you know what the cost of the rehab is to be, then merely deduct that amount and loan costs from the ‘after-improved’ value estimate and you have the maximum amount your property is worth.
If you try to get more than that you are just kidding your client and yourself. There are agents who will say anything to get that listing but I think most are honest and just want to get a sale for their client at the best possible price. This is one way to do just that.
In many cases the feasibility analysis will bring your seller back to reality. You understand the value of listing your property at the right price in the first place. This is just a tool to help you get your seller on board.
Yes, in case you are wondering we are in South Portland ME too.
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