Opportunity in k

Jane Gray
Published on October 27, 2017

Opportunity in k


I’m stumped!  This is the first time Google has really failed me.  I’m familiar with the 401k (an individual retirement plan sponsored by an employer), a 10-k (a corporation’s annual report required by the SEC), and a K-1 (a tax schedule)  so what’s the “k” stand for other than it’s some government designation? I had hoped to enlighten you but I remain in the dark on its significance!  However, it won’t stop me from highlighting an opportunity in a 203k loan…

Low Inventory of Updated Homes

Many Buyers consider giving up the home search this time of year because there are fewer homes to choose from.  We’re seeing fewer new listings that have been updated.  Buyers know that if tight inventory conditions continue, things really aren’t going to improve much by Spring, but prices will continue their upward trend and it’s possible that interest rates will go up as well too which means that they get less for their money.  The motivation to find their dream home persists and they are becoming frustrated.

Buyers, in today’s market, don’t want to buy just any home.  They want a home that is updated.  Buyers consistently tell us their 3 most important “must-haves” are updated kitchens, bathrooms, and flooring.  Like it or not, HGTV affects Buyers desires and so does the eye candy of Listing Websites like Zillow and Realtor and social media style sites like Houzz, and Pinterest.

Buyer Fatigue

There are buyers out there who continue to hold out hope for their totally updated dream home even though they’ve been outbid on previous offers.  They don’t understand that multiple offers and over-asking bids are bestowed on the most updated homes in good neighborhoods. Of course, a lot sellers don’t get this either which is why homes sit on the market longer than 30 days. A buyer I represented recently put in an offer on a home that was priced correctly at $410k and was outbid by a buyer that went to $435k with no appraisal contingency because the home featured very recent updates.

Fewer Homes

Sellers confound the market by pulling listings “before the holidays” or overpricing when demand draws back this time of year.  Despite the fact that there’s limited inventory, Buyers aren’t naïve.  Even in a market with little inventory, Buyers find a bigger selection of outdated homes that require extensive remodeling which calls for money and skills they don’t have.

  • Tastes change about every ten years: Out is Mediterranean style, Dark paint on walls, and natural oak cabinets.  For some, even carpeting is out.
  • Most buyers acknowledge that they will have little money left after a home purchase to do remodeling and they know that putting in granite or flooring requires a skilled

Interesting Opportunity

Ever heard of a 203k loan?  It’s an FHA product that funds the home and the remodeling in one loan.  It can work for homes that are in desirable neighborhoods but need a little updating.  Here’s some of the basics but I invite you to contact me for more details:

  • Funds purchase and repairs and may even cover temporary housing while construction is going on.
  • FHA – backed by the government
  • Project must be completed within 6 months, funds placed in escrow
  • Owner occupied

This isn’t the end-all-be-all so here’s a couple of the noteworthy downsides:

  • More paperwork involved (of course, you’re dealing with the government)
  • You will be required under FHA guidelines to fix all health and safety issues to meet building codes so uncovering and having to pay for a nasty surprise like incorrectly installed electrical or room additions that were never permitted. Can limit the cosmetic remodeling you want to do.  Do your due diligence!

It’s not for everyone, but it’s worth taking a look.  Call me and let’s chat.

Also, if you know what the importance is for the letter k, please email me!  I need to know!


Also here’s the video of the last client party!  https://youtu.be/hAUedyPIMLY  Thank you to my great photographer, Rochelle Petit of Tiamo Images!


Opportunity in k
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