The three areas that people seem to have the most trouble with are:
- The Bid
- Request for Inspections/draws
- The Lien waiver
One of the most important documents to a loan file is the itemized contractor bid. This document follows the loan from start to finish.
- The loan officer uses it to send to the appraiser.
- The appraiser uses it for the evaluation of the rehab.
- The underwriter uses it for the total cost of the loan.
- The draw dept. uses it for the reimbursement of the rehab funds.
It is very important to get the itemized bid as accurate from the start as possible. If you are unsure about the rehab, it is always best to make sure that your contractor has budgeted a contingency for those unexpected items. Who knows what is behind the walls or under the floor?
Bids should be broken down by category to include everything in the house for that category with an explanation of the scope of work.
- Is the paint interior or exterior?
- Scope of work for painting interior – what interior items will be painted? Rooms, bathroom, kitchen, living room, cabinets, trim, closets, doors, etc.
Once your loan closes and before your first draw, get in touch with the draw department at email@example.com and make sure that the cost breakdown that is in the system is correct before ordering the inspection. This will eliminate a lot of frustration for everyone involved and you will have a better experience with the draw department.
Next is the request for inspections. If you follow the template below your request for an inspection will go smoothly without a hitch. Put the loan number in the subject line.
- Clients last name:
- Rehab address:
- Contact name:
- Contact number:
- General contractor’s email:
- Type out completed items:
Last is the lien waiver. Make sure to fill it out completely. Don’t leave anything blank. If you don’t understand something, ask.
For more information, click on the FAQs tab.