The 203(k) Information and Resource Center

203(k) Consultant

The primary reason that consultant section is so important is that the estimate that the consultant prepares is often the final budget allocated for the project. Once the loan closes, the budget cannot be revised. This is why the consultants estimate should be as accurate and realistic as possible. Never request or encourage your consultant to “keep the cost down” or base your repair budget on your monthly mortgage payment. Estimating in this manner could very well leave a borrower with a budget that no reputable contractor will accept.

No two contractors are exactly alike. As contractors begin to bid on the project the borrower should anticipate that their bids will be in the same ballpark as that of the consultant. It is highly unlikely that any of the contractors that bid on a project will estimate the exact same figure as the consultant or one another. Each company has its own criteria for what it takes to turn a profit on a job. What one contractor determines to be an acceptable budget may be laughable to the next. Consultants generally specify contractor grade materials in their estimate. If the buyer desires to upgrade beyond contractor grade improvements they should convey that information to the consultant at the time of the walkthrough.

After the project begins the consultant is typically the individual that returns to the jobsite to perform progress inspections. The consultant will be relied upon to verify that the repairs are actually performed, and should endeavor to assure that the repairs are made in a workmanlike manner. If a dispute arises, the consultant will typically be the first line of dispute resolution. The consultant will be responsible for submitting the draw request documents that authorize payment to the contractor. You should absolutely anticipate relying on your consultant for advice and guidance during the course of the project.

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