Saturday, November 29, 2014

Where Do I Get Help With My 203k Problem Contractor?

As smooth as most 203k projects go I hate to write this post. There is about one in a hundred that become what we refer to as "the 203k from hell" because no one seem to get along.

We had one years ago that three days before the project was to be finished... just three day and we are done... the contractor brought his foul mouthed wife to the project to show her what he had done. Holy cow, from that moment it went down hill fast. Up till then everything was going very smooth.

It turns out her mouth was a "gutter mouth" and she started using the wrong terms to describe his work and it offended the owner's wife who was living in the trailer just outside when she heard F this and F that describing her new home. It was all good just bad choice of words and to a religious person it was about to blow sky high. The owner asked her to leave NOW and that she didn't appreciate the language being used in her home. The contractor's wife being from the gutter didn't take kindly and finally the owner kicked them both off the property. The contractor was fired and not allowed to complete the small amount of work left, ever.

We took another month to find an acceptable contractor to complete the project but who would have guessed that could even happen? Not me. There was no resolution, they weren't going to be allowed back into the home for any reason. Up till then the project had gone very well.

Who knows what that "last straw" might be?

What happens when there is $30,000 in work completed for the first draw and...? 

...and none of the work done was listed on the scope of work? YIKES! This luckily hasn't happened to me but it did happened to a friend of mine in NJ and twice in three weeks. My question to him the first time is how was he going to pay it out? He answered correctly... "I can't pay for any of the work that was done as it isn't' on my list of repairs" - that is exactly right.

When it happened the second time, I had to question his consulting procedure. It seems to be flawed. You need to be very clear on staying with the "scope of work" as outlined in the bid specs because that is what the appraisal was based on and it MUST BE COMPLETED, it isn't an OPTION.

The house is much nicer than our scope of work laid out...

How do you handle that? I did have this happen on one of my projects and I was shocked to see the home was much more than anticipated. The borrower didn't want a draw, the bank called for it to see if anything was progressing. That is their option and obligation under the HUD Guideline. When I arrived it was so much more house. I couldn't believe my eyes. No permit on site, just did the second lender mandated draw and there is still no permit on site. PERMITS MUST BE POSTED AT THE SITE FOR AN INSPECTOR TO SEE ANY TIME THEY COME BY. This is also no an option. The lender was going to call and see if there were permits taken out. I haven't heard yet.

203k 911 is our solution to your problem 203k project

We have completed so many 203k projects that we have seen most everything that could happen, happen. We dealt with it and resolved it. There was some times where I stepped in and mediated for other consultants live and in person... to mutual benefit of all concerned. It actually helps us all to resolve issues amicably. The lender, the borrower, the contractor, all benefit from these services so we now have a place to go to help get these issues aired and resolved in the least costly manner. It is 203k911 and it works all over the country.

-Mike Young, 203k Team Leader 

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668. We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. 

To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation".

Wednesday, November 26, 2014

Happy Thanksgiving!

Wishing You and Your Family a Safe and Happy Thanksgiving!


Sunday, November 23, 2014

Renovation Loans - Some Get It and Some Never Will

I've been doing renovation loan and construction consulting since 1994 and found it to be a very rewarding experience and we move a whole lot of homes that wouldn't have been moved in any other way.

Daily I hear Realtors say they have never done one after thirty years in the business, others have been told by someone years ago that you should stay away from renovation projects. I love this one because in some cases they told you that so you wouldn't poach in their territory. Beware of those who might tell you to stay away from the FHA 203k and be sure it isn't because the want it all to themselves.

1) You have a home that your buyer wants that is dated, very dated. There appears to be no updating but gee, it is a nice home otherwise. In my opinion you would be doing a disservice to them not to make them aware of the potential for a renovation loan and put them into that home fully restored or updated, but that is my opinion.

2) The work all happens after it closes escrow so it doesn't affect the Realtor or slow up the process of closing.

3) The buyer gets a 10% push on the appraised value and it is based on the work being completed.

4) You can actually sell them the home, close the loan and then suggest they get a 203k refinance. The kicker here is that if they close the 203k loan within six months of buying the home they get to count all of that money they put down as money they have into the project for the purposes of the new loan making it possible to get the construction money with NO MORE MONEY OUT OF THEIR POCKET.

5) The 203k is just another tool in your tool box that you can very effectively use now and again, it doesn't have or need to be used on every home but it can sell a home for you that otherwise might be skipped over.

If your office needs some training on the programs that are available please don't hesitate to call our team, we are happy to provide you with all the info you need to know to make you proficient and confident that you can get these closed.

Donna in SC closed her first full 203k in 21 days many years ago and continues to do so. Why can Donna do this and others tell you it will take sixty days? Simply because she did her first one with a seasoned team and realized early in the game that it is the Team that makes the difference. Choose your Team wisely and we hope it will be our Team.

Thursday, November 20, 2014

The Most Common Regrets of First Time Home Buyers

Are you a first time home buyer? Sometimes, after closing the deal, home buyers report several regrets which probably could have not occurred if precautions and proper preparations are made. Here are some of the common regrets of first time home buyers which we hope you could avoid if you are pursuing your dream of owning your very first house.

34% wished they negotiated more

Negotiating with the seller is an integral part of the home buying process. First time home buyers are usually delighted with the price tags such that when they offer the price they want and the seller agrees - they give in and agree to close the deal. Yet, after the closing 34% wished they negotiated more to obtain lower prices.

40% wished they should have cashed out more for the down payment

Buying a house for the first time involves shelling out significant amount of money for its down payment. However, 40% of the first time home buyers usually pay down payment as what is the convention. This percentage wished they should have cashed out more because it will lower their monthly dues.

38% found it costly to maintain a home

As soon as the first time home buyers move in to their purchased homes, 38% found out that home maintenance is costly. There are a lot of things involved to make the house appealing, functional, and stylish as the owners wanted the house to be. Apparently, many first time homebuyers are not prepared with these kinds of tasks. Their budgets aren't prepared to for such maintenance processes.

25% found out they don't like the neighborhood

After moving in to the house, a quarter of the first timers wished they looked for a better neighborhood. The beauty of a house is not just the sole factor that home buyers, especially first timers should look upon and evaluate. The neighborhood is also a critical value. The quality of the neighborhood and the kinds of people living there will constitute a great part of your daily life.

24% revealed regrets with regards to their yards

The yard, although an outside part of the house, is essential because it can serve as playground to the children. It can also become part of the recreation of adult family members especially the garden part. Despite this, 50% of those with regrets wished for a smaller yard because of the difficulty associated with its maintenance. The other 50% wished for a larger space because of more plants they wanted for their garden. Some of them also want to put outside furniture.

These are some of the common regrets that first time home buyers have. With the information discussed herewith, it is hoped that you will avoid them by taking into big consideration what you really want in a house.

Desare Kohn-Laski is a proud realtor and experienced Military Relocation Professional in Florida. She is a real estate broker who is knowledgeable and familiar of the South Florida real estate market. Her areas of services include Broward County, Palm Beach County & Miami-Dade County. Stop the chase for your dream house with her professional and expert assistance. For more information, hop on to http://www.skyelouisrealty.com.
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Monday, November 17, 2014

Homes For Sale: Short Sales and Distressed Property Buying Tips

Buying foreclosed property is a little different from buying typical homes for sale. In most cases, only one real estate agent is involved, and the seller wants an approval letter from a lender before considering an offer. There is rarely room for negotiation, and the property comes "as is," with repairs left to the buyer. On the positive side, foreclosed homes are vacant, which speeds up the process of moving in.

Buying a foreclosure is definitely a grind. It's not for the squeamish. But in doing so you can find prices on real estate that would otherwise be unsuitable for your budget.

What Should I Do First?

The first step in buying distressed property is two fold and should happen simultaneously: 1) get a preapproval letter from a lender, and 2) find an agent who specializes in flipping foreclosed property.

You can accelerate the first step by visiting real estate websites that contain foreclosure databases. You can also visit local websites that allow you to filter the results to see only foreclosed properties. Look for the acronym "REO" (Real Estate Owned), which means it's owned by the bank. That means the home has been through foreclosure. It's for sale!

The goal of perusing through databases isn't to find home for sales, per say. It's to find a local agent. Banks generally hire one or two of these to handle all of their REO properties in a specific market. In many cases, buyers work with real estate brokers and not agents. That means the commission generated by the sale goes to one person, not two.

Most brokers have long established relationships with the banks. It's good to find out who they are and where they work. You can find out who they are by contacting your local real estate company.

What's Next?

Some banks want strong offers, while some want strong buyers. This is contingent upon the bank's preference, not the agent's. The bank may choose the most appealing buyer, which can mean different things depending on the bank. Some banks may make their choice based on the size of the down payment. Though offering large cash payments may bring down the asking price, it's not typical. The best thing you can do at this stage is surround yourself with a solid team from a real estate agency.

Close On Time

There is no leniency in a short sale's closing escrow date. Exceptions are rarely made and you must close on time. Therefore, it's important to take care of all paperwork immediately after opening the escrow. Set your loan closing date with the bank ahead by at least 2-3 days of the closing date. Clearly document each step, because if you do need to ask for an extension, the bank is going to want to know that all criteria were followed to the T.

Short sales, foreclosures and distressed property provide great ways to find new homes for sale. First-time homebuyers purchase around 33% of these kinds of properties. It's becoming a booming market for young buyers and for those deciding to ditch their rental keys in favor of ownership.

Be sure to contact an experienced real estate broker today about purchasing your dream home!

Robertson Homes is Mobile, AL residents' go to place for beautiful homes for sale. Learn more at http://www.robertsbrothers.com/.
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Friday, November 14, 2014

What To Know Before Buying A Fixer-Upper Property

If you want to purchase an inexpensive property, you can check out the several fixer-upper properties. These properties are cheap but they need some repairing. This is why you have to take note of essential things before purchasing such properties. Below are some tips:

1. Have the property inspected by a professional. This is crucial no matter how cheap the property is. You have to know the work to be done and the money you will spend on repairs. Always remember that there is something more than what meets the eyes. The sunken floors could mean a floor replacement all together. Insulation may be worst and you have to redo the entire house. Have the property checked and review the report thoroughly.

2. Be ready to walk away. Homes are not school projects that you can easily finish. These are investments. If you purchase the wrong property, you have to live through it for a while. You would not want to spend a lot of money on something and regret it afterwards. if the house has more damages than what you can manage, walk away. There are more homes in the market.

3. Be wise in making an offer. You do not have to impress the seller with making a good offer. Remind yourself that buyers have the upper hand today. You can make a low-ball offer and sellers will still consider them. You might not get the property for the initial offer made, but you will get a pretty discount on the property. If the seller refuses to sell you the property, then move on. Again, there are more properties to choose from. You do not have to settle.

4. Prepare a realistic budget for repairs. Do not underestimate the expenses you will incur for repairs. As mentioned earlier, things are not always, what they seem. A small hole on the roof could call for an entire roof replacement. The scratches on the wall might need more than just painting. It would be great to add a little extra on your original repair budget.

5. Find good contractors. You will need them especially if you are not familiar with doing the repairs and renovations yourself. When looking for contractors, make sure that they have good reputation. Work with someone who has a nearby office. Do not make up front payments. You can pay a percentage as the project starts and pay off the entire amount once the project is done.

You can land a good deal for fixer-upper homes. However, you have to make the necessary preparations before you buy one. First, it is essential that an inspector checks the property. You should have an idea of how much it will cost you to make the essential renovations and repairs. If the state of the property is more than what you can chew, then walk away. There are several properties in the market today. Take note to be wise with the offers you make. Giving low offers is not bad at this point. After all, you need to overdo your budget for repairs to make sure that you get everything fixed. See to it that you find good contractors to get the job done as well.

Consider the Payson Real Estate and the Bank-Owned Homes in Payson for your next home.
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Tuesday, November 11, 2014

203k Consultant and Lender Software Version Update

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Our latest update has just been uploaded to our website for all lender and consultant users. Please go to the site, if you are already using v11 then this is a free upgrade.

Thank you for your continued support. We appreciate your business.

If you are a lender and want to test drive the software for your Streamlined k loans you may also download and install the software to start your free trial.

Are you a LO and have to fill out all those forms, you may save hours of your time by using our software. Kick the tires for FREE during the trial period.

Saturday, November 8, 2014

Change of Heart After Remodel



The husband changes his mind when his 'cookie cutter' home is remodeled.

Wednesday, November 5, 2014

Self Help Under the FHA 203k Loan Guarantee Program

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Yes, there is a provision for "self help" under the FHA 203k program but they aren't carte blanc. Some lenders allow self help ONLY if the borrower is a licensed contractor in the state where the project is located. Many lenders DO NOT ALLOW SELF HELP at all, under any circumstances.

203k Self Help project

To make a long story short, it isn't advisable to use the self help provision of the program as most lenders that might allow you to do self help will make the accounting so difficult that it just doesn't make sense. Too much paperwork and accounting.

In any case if you should find one that allows you to do self help you cannot be paid for your labor, this is not a cash out program. You can be reimbursed for your materials cost but NO LABOR will be paid out instead it can pay down on your mortgage.

Sunday, November 2, 2014

Best Mortgage Deals: 203(K) Renovation Loans From FHA

Want to add value to a home? Some of the best bargains are properties in need of repair. The FHA 203(k) mortgage includes the cost to purchase or refinance and make repairs in one loan. This allows home buyers to borrower more than the sales price in order to make repairs if value increases. Borrowers are guided in the process by a certified consultant.

Since the mortgage is government backed, credit terms are more flexible and loans are allowed up to just over 95% of the property's after-improved value. These loans offer competitive interest rates.

FHA Lending

The Federal Housing Administration (FHA) guarantees mortgage loans. Borrowers not eligible for non-government, also called conventional, financing may be eligible under FHA's more flexible underwriting guidelines. FHA also allows the seller to pay a part of they buyer's costs, allows down payment assistance from family, close friends or nonprofits, and has competitive interest rates.

The minimum borrower investment of 3.5% is a welcome contrast to the up to 20% some conventional loans require. The loan can also be used to refinance owner-occupied properties. The 203(k) loan is no longer available for investors.

The 203(k)

The FHA 203(k) offers the following advantages:

- Repairs are included in determining the after-improved value. The maximum mortgage is based on the home's value after improvements are done;

- HUD Certified Consultants oversee home improvement from cost estimating to inspections. Contractors sign a written agreement to comply with 203(k) requirements. Changes to approved work, if any, must be deemed necessary by the HUD Consultant and approved;

- The lender's escrow department disburses funds only after work is completed and inspected;

- Borrowers can finance up to six mortgage payments if the property is uninhabitable during renovation;

- The escrow department will ensure there are no mechanic's liens before final payment is made to the home improvement contractor.
Disadvantages:

- FHA loans charge mortgage insurance upfront in addition to a monthly premium;

- Contractors are paid after each stage of work is finished, usually in three to five installments, so they must have their own funds to get the work started in most cases;

- Underwriting can take longer due to the need for coordination between homebuyer, contractors, the Consultant, and special renovation lending teams;

- An extra appraisal and a HUD Consultant fee must be paid upfront. That is an $800 to $1,500 additional expense.

Finding a Lender

Since so much is involved, be certain your lender is familiar with 203(k) requirements. Ask your Mortgage Loan Officer for details. You can visit HUD's website, http://www.hud.gov, and search "find a lender." Be sure the 203K box is checked on the Lender List page.


Kenneth Bossard, MBA helped hundreds gain loan approval and find cash to buy homes. His twenty years mortgage finance experience includes work as a mortgage lender, nonprofit housing counselor and licensed Realtor. Ken's techniques are revealed in an eBook available at [http://www.RepairRuinedCredit.com]
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