Writing the Contract

Be sure to review the purchase contract for the following items:

1. Contract should be contingent upon approval for the 203(k) Mortgage.
   • This section of the contract should not be any different than buying a standard 203(b) loan. Make the purchase contingent upon the buyers ability to qualify for the loan.
2. Seller should allow inspectors, contractors, or HUD consultant access to the property to estimate the cost of the remodel/renovation.
   • Agents should prepare to help the consultant, the home inspector, the general contractor, the appraiser and possibly a sub-contractor gain access to the property. Remember, this will be a work in progress type sale and can at times be viewed as building a custom home. The buyer should also be prepared to be present and help with specific details (wish list), especially when working with the contractor. A combination lock type pass key device works best. Also, you’ll want to begin to make arrangements to have the utilities turned on, if not already working.
3. Within seven to ten days of the agreement, the buyer should obtain an inspection of the property by a professional home inspector and termite company to make sure there are no unforeseen problems.
   • As a home inspector and HUD consultant we are positioned to help uncover potential problems with the home very early in this process and we’ll alert the buyer to issues that may affect the appraisal. Part of our role as the consultant is to assure that HUD guidelines are met and we have experience recognizing those issues. Here’s where we can save you valuable time and money. Contact Us For More Info Here.
4. If the borrower is purchasing a HUD-foreclosed property, it should be stated in the sales contract what portion of the closing costs HUD is going to pay, and the incentive programs HUD is offering at the time. Any incentives being offered should be specifically stated in the contact. The “as is” appraisal, done by the appraisal company, will also be needed at the time of submission.
   • Contact your mortgage company for more details.

Watch Step-by-Step Presentation