What does a consultant do for their fee?
Some lender clients must think it is a matter of a site inspection, end of story, you can do that in a day, right?
I'm sorry but that isn't what we do as 203k consultants. Our job description is to make a site visit, looking for health and safety issues, and items that would affect the structure's ability to last as long as the mortgage, then to add whatever else the borrower's may want to add to make this property "theirs" in ever sense of that word.
We then work with the borrower(s) to come up with a "scope of work" so all contractors are bidding the same list of repair items and in the proper categories for the program requirements.
This process was designed by HUD to take two weeks. In reality we have it down to five working days in most cases at which time we have completed our bid on the project and it is ready to go out to bid.
There are a few lenders that get the contractor out there way ahead of time, they might take four weeks to get their bid back, then they provide that bid to us and expect us to put a stamp on it and turn it in the next day. Not going to happen. Contractors typically miss lots of "health and safety" items.
These lenders would be way ahead to get us out there when the contractor is notified, our bid is available in 4-5 days in most cases, and the borrower is better served as now they have an idea of where this project bid will come in. When the contractor's bid arrives they now have a benchmark bid to compare it to. This is our service to the client. To trivialize what we do is a disservice to the borrower and the process.
What happens when the contractor is given four weeks to prepare a bid and only then does the lender order our service is that the contractor's bid quite often misses things they are reluctant to add as they just spent four weeks putting this together. Our job then changes when we have a bid in hand and sometimes the borrower has already signed a contract... I hope not. We now review the bid to see if it is "reasonable" and in many cases it isn't broken down as HUD requires it to be and the work isn't properly described as contractors have a tendency, and justifiably so, to be very vague in their scope of work and we cannot be. The idea of being too detailed is that the borrower might then "shop the bid' by looking at Home Depot or Lowes and finding those items for less money and have to explain why they are so different. They aren't actually that different once you put profit & overhead and installation on top of the cost.
downtown
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