The 203k loan can reconvert illegal garages.

There was a property a few doors down from me that sat on the market for over 6 months.  The property was a foreclosure that had an illegal garage and bedroom conversion (done without permits).  The carport in the backyard looked like it had been through a tornado, so it was of no value.

I spoke with the Realtor about why the property sat for so long.  He said the lack of a garage was a problem.  I suggested the 203k loan.  He said no thanks, he’ll just wait for a cash offer from an investor.  The issue was that the house wasn’t in that bad of shape.  It wasn’t a major fixxer so investors have stayed away.

I again approached the Realtor about the 203k loan.  He said his Wells Fargo rep who had a sign out in the front yard with his would have to do the 203k loan.  But the problem is that she didn’t know how to do one and would have to ask another Loan Officer at Wells to do it which means she would lose the commission.

I explained the 203k loan again to the Realtor and he seemed open to it since the offers they were getting on the property were were 15% lower than market value.  He than advised me that the property was in escrow with what he thought was an investor and if it falls out of escrow……..again, he’ll give me a shot at helping him market it as a 203k loan opportunity for the buyer.

It amazes me that a good portion of the real estate community doesn’t accept the 203k loan as a viable financing option.  The word needs to get out on the street to not just Realtors but to homebuyers as well.

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