Special offer

I just made an offer on a home, and what I was told.

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

I have been doing renovation loan consulting for 30 years now and it baffles me how many Realtors don't have a clue. 

We made an offer on a home and they want to know how you are going to finance it... none of their business, but they all seem to ask. I told them we'll be putting $100,000 down and using VA for the balance. 

We wait to hear they accepted the offer so we can get our home inspection and pest inspection, roof inspections, ordered. This house is on the East Coast and I'm on the West Coast moving their in 30 days or so. I'd like to get the repairs started before I get there. LOL

The seller's agent tells us that the home needs work and she is sure it can't go VA. Well, that is BS, it can go VA and they do have a renovation loan product, but regardless we can change it to a 203k FHA loan program if necessary. This agent is ill informed at best and obviously has no idea of what can or can't be financed with regards to renovations. 

Posted by

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Michael Elliott
Fathom Realty - Burlington Township, NJ
Burlington, New Jersey Residential Sales

Actually, it is their business which is why it must be disclosed.   Watch what happens if they have more than one offer.    

Apr 23, 2024 10:38 AM
Mike Young
203kOnLine.com, covering the USA - Stallings, NC
FHA 203k Consultant 916-758-1809

So you are saying that if they don't understand the loan I'm using, they will jump ship and take another offer that might have a loan they have more knowledge of my offer will likely be rejected. I've already assessed that and have changed the financing to a loan they are likely more familiar with. Stupid in my opinion. The VA has no PMI and a much better rate for me. It may be there business but they should be more knowledgeable. When I teach Realtors about the FHA 203k and ask them how long they think the 203k has been around the overwhelming answer is, "about 2005"... how about 1961,  consultants were created in 1994, and the Limited 203k was introduced in 2005. 

Apr 23, 2024 10:48 AM
Michael Elliott
Fathom Realty - Burlington Township, NJ
Burlington, New Jersey Residential Sales

203k loans are very rare in some areas, and yes if an agent is not educated they will go with "what they know", instead of getting educated in some cases.  

Apr 23, 2024 10:57 AM
Mike Young

If your lender can't close a renovation loan in 28-35 days it is typically because they are in everyone elses business and not getting their own work done. I always tell them to "race me to the finish line". Another reason they take longer to close is that they get all their work done and once that is complete, they order the consultation The consultant should be the 1st person on the job. 

Apr 23, 2024 11:38 AM
Mike Young
203kOnLine.com, covering the USA - Stallings, NC
FHA 203k Consultant 916-758-1809

I do more than most. HUD accused me of "hogging the work" because I find them very easy to market. Most lenders tell you it takes 45-90 days to close, my more estute lenders know it only takes 21-35 days 90% of the time, mainly because they let the "team" function like a well oiled machine. 

Apr 23, 2024 11:05 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Hi Mike... it is sad that so many agents have no clue about how VA loans work. I've been very fortunate to work with any number of home buyers who had VA loans and haven't lost out on a purchase because of that.... but I do know how to present a VA borrower. I've also always encouraged my sellers to accept an offer with a VA loan in a multiple offer situation, all other aspects of the offer being equal to support our veterans... and I've never had a seller client turn down an offer just because it was VA. I've also worked with great lenders who've closed VA loans for me in under 30 days. 

Apr 23, 2024 11:25 AM
Michael Elliott

Under 30 never happens here for VA or a 203k.  Not yet, anyway.   

Apr 23, 2024 11:28 AM
Mike Young

thanks for joining in the conversation. This seller's agent came back right away and said that VA doesn't do renovation loans... my first clue they were ill informed. They used that to inform us that the rear dedck must be replaced and a few other issues not preiously disclosed. LOL. VA has the best interest rates right now and no PMI. Why would I want to use FHA?  

Apr 23, 2024 11:29 AM
Ed Silva, 203-206-0754
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

The entire intent of a renovation loan was to provide a way for people with less resources to compete with investors. That agent definitely needed to learn the business.

Apr 23, 2024 05:03 PM
Richard Weeks
Dallas, TX
REALTOR®, Broker
Congratulations on your new listing.  Nice house and nice job with your presentation.
Apr 24, 2024 04:02 AM
Mike Young

there is no new listing. LOL get those points.

Apr 24, 2024 01:02 PM
Kat Palmiotti
eXp Commercial, Referral Divison - Kalispell, MT
Helping your Montana dreams take root

How a home will be financed is one of the criteria that is important to provide when making an offer on a home.  In addition, proof of funds and/or a pre-approval must be part of an offer. A seller is not going to want to accept an offer if they don't know the buyer can actually purchase.

As for the VA loan and other loans, the agent does seem to need some guidance on the various loan products available.

Apr 24, 2024 05:42 AM
Mike Young
203kOnLine.com, covering the USA - Stallings, NC
FHA 203k Consultant 916-758-1809

we could have closed in 10 days and the seller would likely have received more money than they did from an all cash buyer. Just to be clear EVERY sale EVER has been all cash to the seller. 

May 18, 2024 09:41 AM