Real estate transactions have an awful lot of working parts to them. The act of buying or selling a house is often an emotional and overwhelming experience. Behind the scenes are the Realtors and loan officers that work through these problems so people can get the homes they have fallen in love with.
No one wants to deal with someone who adds to this burden.
I was at a home in South Saint Paul looking at a 203K. The potential owner was quite concerned because a previous contractor had come out and told her she needed a new driveway, retaining wall, a new exterior paint job in addition to the things she wanted done to the inside of the house.
The driveway did have a few cracks in it (most driveways do), the retaining wall did lean in a little but was still in decent shape, and the exterior did need some patches but the patches could have just been touched up with paint instead of a whole house being painted.
When it comes to working with a contractor on a 203K or any of the renovation loan products that many banks offer, finding an experienced contractor can often be the difference between a disaster and a success.
Look for the ability to listen and ask questions.
Making decisions on 203Ks or renovation loans can often be time sensitive. Deadlines need to be met, inspections have to happen, and paperwork needs to be done. An experienced contractor who is a good listener and knows how to ask the right questions will be able to uncover what they buyer really wants. Many times, buyers have never even owned a house, much less remodeled one. It’s up to the professionals to know how to ask the right questions to figure out what the buyer’s goals are. If a contractor is not good at listening and asking questions, a home owner can be disappointed with what they end up getting in their renovation loan
Look for the ability to be straightforward.
If the buyer wants to do things to the property that may cause the deal to fall through with appraisal issues, wouldn’t it be nice to know that right away instead of waiting for the appraisal to come back? I have been asked to remove bathrooms, and sometimes second kitchens in homes using the 203K or other renovation type loans. While this type of renovation made perfect sense to the buyer,(and I understand why they wanted to do it) removing kitchens and bathrooms do not add value and can make appraisals more difficult
Look for a “Can Do Attitude”.
Each 203K or renovation loan is different. This is most definitely not a one-size-fits-all renovation project. Look for contractors who have an attitude that, “Sure, this can be done.” Look for contractors with the experience to put a renovation project together that fits budgets, appraisals, and your buyer’s expectations.
If you are looking for information on the future of the 203K and renovation loans in the Twin Cities area, check this article out.