Saturday, December 12, 2015

Why Use a Consultant for a Renovation Loan?


I can't tell you how many times I have heard about how the process is all but complete, we have been working on this loan for 3 months then they call a consultant and say something like "okay, we need the consultant's report - can you do it by tomorrow?"

There are many lenders who will coach you do to it this way making it seem like the consultant's job is necessary but trivial. Watch out for that kind of lender.

Remember my lender Donna, who wanted to be the best 203k lender in the business. She closed her very first 203k in 21 days. Yet there are many lenders who don't even call the consultant until it is already 60-90 days into the process and everyone else has reached the finish line. Then they say "GO" to the consultant. We actually will find health and safety issues and grading issues that no one noticed needed to be completed in the scope of work quite often.

If you understand the consultant's roll you would know that they just kicked the client in the teeth by doing it this way.

We are the FIRST inspection, not the last that should happen. Get your consultant out there ahead of the crowd and they will lead you to the finish line and likely pull everyone along with them.

I just had a lender take seven (7) months to close an escrow. I'm still trying to figure out why anyone would use them... but the rules are that "the lender has to choose the consultant" so when you see an order come through from them you take it and you smile and you do your part. We can't "bad mouth" that client nor can we tell you that the client takes seven months to close these loans or we won't be hired by them ever again... maybe that would be a good thing, mmmm.

We'll we just closed another one for a different lender, it only took 4 full months. Why, because we had a newby. A new loan officer who wanted the experience so instead of letting the team work, the LO decided to micromanage and instead of getting my job done with one email we had to put up with copies going to everyone in the chain and then getting a response from everyone in the chain...wasting everyone's time. More imporantly causing the wheels to stop turning so we all have to ramp up again. Let the team function as designed.

Had you come to the consultant first we would have directed you to a lender who can actually close these type loans in 30-45 days tops and if you are in SC maybe even 21 days.

I received a call just this week where a buyer is doing all their advance work. They have identified a home and asked if I could give them the name of  an electrical sub contractor to give them a price on the electrical. Maybe you need a plumbing contractor too? Yea but first I want to know about the electrical work.

Hello, did he just ask me to send out a sub contractor to do my consultation for free? I reminded him that I quote a project cost in all regards not just the electrical. I also reminded him that even though he gets a quote on the electrical for $10,000 by the time a general contractor puts his markup on that number all his work was for nothing. I reminded him that is what I do for a living and you want me to give you the name of a guy who will give you a FREE quote on one little piece of the project. Interesting thought. He is wasting his time.