Don't Know If This Is A Problem Or Not...
I put a contract on a house. I'd been preapproved for a rehab loan at 80% ARV. I'm scheduled to close on 12/2.
Problem: No one returns phone calls in a timely manner which messes up the works.
Last Thurs, I left several messages for my lender to let me know if he received my faxed contract, to give me instructions on what else he needed from me(since this is my first rehab loan -- not my first rehab, just my first loan), and so on. Didn't hear from him until Tues. He apologized, told me he got the contract and needed my repair estimate asap. The original contractor that looked at the house "forgot" to get to my estimate, in spite of my leaving messages on his phone. In the meantime, on Monday, in anticipation of needing the estimate, I had to chase another contractor down to get him to the property . He promised to get the bid to me yesterday. I did not hear from him. He did not return any of my calls. So I hightailed it to another house that was being rehabbed and talked to the contractor there - someone I had just met. He stopped what he was doing to go to my property and promised me his bid in two days, which would have been tomorrow, but I convinced him to give it to me today.
His bid was HIGH. It's still within the ARV, but high nonetheless. Being that I needed to get "somebody's" estimate over to the lender pronto in time to order the appraisal, (not to mention that the title company wanted to know the total loan amount), I went ahead and faxed it over. Now I'm worried. With it being so high, will my lender say "whoa - no way!" ? Will he accept my prepared explanation that "we" estimated it on the high side to cover all contingencies? Will red flags go up when I DON'T use this high priced contractor? I mean, afterall, the lender is going to parcel the money out anyway. I won't get it all at once. And no doubt, I won't need all of it.
I hate it when key people don't return calls. It can really put you in a bind and have you running around putting out fires. Heck, I'm busy too, but I RETURN all calls. 
Why does it matter if it is high?
Does your lender force you to use the contractor who bid the work?[ Edited by myfrogger on Date 11/20/2003 ]
How busy is your area. In good times it is hard to get anything done cheap or otherwise. You may be glad the bid is high at the end of the project when the money is gone and the job is not finished. Sounds like you are fustrared. You are doing the right thing. Keep on target and keep pushing folks to do what they need to do. Having a dead line always makes we work harder. Closings can be postponed almost always if need be. Good luck on the project
Ted Jr
I assume that your rehab lender isn't in it for the long haul and will be paid off if you sell or get long-term financing. I would think that the lender would be looking at the appraised ARV and whether the rehab loan would cover the cost of rehab. If the lender questions you about the change of contractor and you say, "We found another contractor that has a reputation for doing quality work who gave us a refined estimate that was lower", the lender would be pleased. It is safer that you have a bigger margin and the lender still gets his outrageous points and interest rate.
I sympathize with your frustration in trying to get people to do what they say they are going to when they say they are going to do it. It is particularly annoying when you are trying to meet real estate deadlines.
So I faxed the repair estimate at 4:00 yesterday. I did not hear back from the lender. I know he needed that estimate yesterday to order the appraisal in time for closing. I know the title company needed the total of the loan yesterday so they could order the title work (5 days estimated time to complete). After a good night's sleep (yes, I can sleep soundly even when stuff goes awry...but I wake up screaming <IMG SRC="images/forum/smilies/icon_eek.gif"> LOL), I thought about it and realized the worse case scenario is that the lender looks at the estimate and says redo and the closing date gets pushed back. And if the closing date gets pushed back, then I have to pay an additional $100 per day as a "fine" to the foreclosure dept handling the property. I already have loan approval, so that's not an issue. Oh well... it was so much easier when I worked with "private" money.
So now I feel ok about the repair estimate being high, and if the lender signs off on it, then I'm in like flint.
Thanks for letting me rant, yesterday. I was full to the brim!![ Edited by makingaliving on Date 11/21/2003 ]