First of all the Buyer decides to have a Consultant prepare a Work Order. After of which an FHA Plan Reviewer can review the proposal to ensure it is properly prepared.
The buyer has a Certified 203(K) Consultant prepare the work order proposal and then the buyer selects a contractor to do the renovations under the terms and conditions outlined by the Consultant.
I recommend you hire a Certified 203(K) Consultant.
The purpose of the Preliminary Feasibility Analysis is:
1. To determine the extent of the rehabilitation work required;
2. Get a rough cost estimate of the work; and
3. Determine the market value of the property after completion.
The buyer does not want to spend money on plans and repair specifications only to find out the house did not APPRAISE for the purchase price causing complications in the loan Approval.
A priliminary examination can often be done by the home buyer and their Real Estate Professional via a Marketability Analysis.
This is often done prior to hiring a 203k Consultant to prepare a report. The most important element in my opinion is the availability of additional sales comps in the area once the work is complete.
That concludes the use of the Preliminary Feasibility Analysis for an FHA 203k Loan.
When a property is located, the homebuyer and real estate professional (agent, broker or 203k consultant) should determine:
- How much rehab work will be required
- How much will the rehab and repairs cost
- How much will the property be worth, once the planned rehab work is completed. (It is important to know early in the process whether or not the value of the property will be greater than the cost of the improvements.)
After the preliminary feasibility analysis is completed, a sales contract will be executed. Then, the homebuyer will choose an FHA-approved lender. How much does a 203k Consultant cost?