The contractor hasn't started work an we closed our 203k last week

By
Home Inspector with 203kOnLine.com, covering the USA S0289

How many times to we hear this?

I always tell the client at the consultation that THEY must tell the contractor when the loan closes because they just signed the paperwork. If they fail to do so the pot will boil over a bit and everyone gets upset yet NO ONE has told the contractor it closed escrow.

 

We always tell the client that they are responsible to let us know when it closes, and we are more than happy to tell the contractor but in all cases the borrower is the boss and the boss should notify the contractor when it is time to start work.

 

What happens once the contractor learns it has closed escrow?

1) The contractor will set up a meeting with the borrower and lay out a plan to get this project completed,

2) The contractor then buys and gathers materials for the project construction, and

3) Then the contractor will mobilize to get the materials and work force to the job and begin construction

 

All of this takes about a week. 1st draw is due 30 days from the close. Many borrowers think the contractor should be on the job an hour or so after they have the keys... NOT SO. 

 

The contractor has 30 days to get their first draw inspection and payment. If they have another project winding down in a week or two, they may very well wait for that crew to mobilize to this new project. It doesn't mean that they won't purchase materials and have that all important meeting with the borrower to make the plan. 

Posted by

Mike Young, 203k Team Leader    Mike ready for your 203k order

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Comments (6)

Tom Arstingstall, General Contractor, Dry Rot, Water Damage Sacramento, El Dorado County - (916) 765-5366
Dry Rot and Water Damage www.tromlerconstruction.com Mobile - 916-765-5366 - Placerville, CA
General Contractor, Dry Rot and Water Damage

Very good explanation of the contractors time line Mike. It seems like a reasonable expectation for everyone involved.

Mar 24, 2014 02:58 PM
Mike Young
203kOnLine.com, covering the USA - Las Vegas, NV
FHA 203k Consultant 916-758-1809

Tom, It does yet now and again someone will not hear that part of the consultation. Everyone wants their project to start the minute it closes, they are anxious to get into their new home but it is all about logistics. 

Mar 24, 2014 11:08 PM
Kristina Heili
Keller Williams Premier Realty - Woodbury, MN
Comprehensive Real Estate Services

Thank you for the informational timeline. I've had only one experience with a 203k loan, but it went extremely well. The buyers' contractor was at the site even before the buyers made an offer on the home just to make sure the work could be done within their loan ceiling. They kept in touch with him during the entire closing process.

May 13, 2014 12:07 AM
Mike Young
203kOnLine.com, covering the USA - Las Vegas, NV
FHA 203k Consultant 916-758-1809

Kristina, thank you for stopping by.

May 13, 2014 11:19 PM
Travis "the SOLD man" Parker; Broker/Owner
Travis Realty - Enterprise, AL
email: Travis@theSOLDman.me / cell: 334-494-7846

Thank you for the tips. I haven't done one of these yet, but am sure that I will.

May 14, 2014 03:45 AM
Mike Young
203kOnLine.com, covering the USA - Las Vegas, NV
FHA 203k Consultant 916-758-1809

Let us know when you are ready

May 14, 2014 02:16 PM