In all of the 203k presentations and education events over the last 20 years, the question always comes up; how long do these take? Then the next few minutes were always about a deal that took forever because of problems with the work or the value didn’t come in…the secret to each time..every time..on time, is to ask the right questions upfront and to try and get as close to the “target” as much as possible.
There are a number of moving parts to a 203k purchase and you want to limit the “moving parts” as best as possible. In a purchase transaction, you start with the purchase price (with a concession or not) and you need to ask the right questions on the “moving parts”.
FIRST QUESTION: What type of work are they looking to do.. so remember the last K-Tips about “Required/Desired” and addressing the utilities. But now the question is what are the anticipated costs of these work items.
SECOND QUESTION: What is the anticipated “as-repaired” property value going to be? With these key questions; the trick is to get as close as possible to these actual numbers
up-front, and avoid having to go back to the drawing board in the 3rd or 4th week.
In our experience, many people underestimate the cost of the work and over-estimate the property value once it’s completed. These few questions answered as close as possible in the beginning will help you avoid the “moving parts” and help you hit the “target”. What is the “target”?…..the actual costs of repairs and the actual “as-repaired” appraised value.
Ask the questions: What is the purchase price? What type of repairs are you doing? (required/desired/utilities) What is the anticipated cost of repairs? What is the anticipated property value once all the repairs are completed? If you hit these “target” questions…..you’ll close… each time…every time..on time.
At MortageDepot we are experts at home renovation financing, we have the experience to help you with your 203k financing.