If deemed feasible, the client signs a “Consultant Agreement” which outlines all Consultant fees which are payable by the borrower at the time of delivery of the “Work Write Up”. The “Work Write Up” is a clear and concise project specification document, construction cost analysis, HUD required draw request forms, preparation of contractor bid packages, and the preparation of lender packages. PPT Inspections will prepare a detailed description of the property repairs needed for your lender. The Write-up will include the borrower’s desired upgrades, as well as what will be required to satisfy the lender, FHA and building code compliance. The Work Write-up will include detailed line item descriptions and pricing, and will be prepared with the homebuyer’s budget in mind. The Work Write Up required by the lender to order the appraisal and process the loan. This consists of a summary page, the contracts listed and any Architectural Exhibits, which are documents that may include a sketch of the building if a wall is being relocated, or plat map showing an existing septic or well, etc…
“Work Write Up” fees are non-refundable once delivered to the Borrower, Lender & Contractor.
The Lender and the 203k Inspector will want to see that there is 10-15% of the total expected cost of repairs added to your loan amount for “unforeseen” items. Depending on the overall condition and your ability to ‘see’ all that needs to be seen in order to do a proper cost estimate, you will need 10% or 15% or even 20% in some of the more difficult rehab projects.
If you are purchasing a Foreclosure there is a good chance that you will not have all utilities functioning at the time you are making your buying decision and estimating the cost of repairs. Some of these situations require a little more planning for unforeseen items. After all, among the worst things that can happen is that you run out of money and cannot finish the job! No one wants that to happen.