Construction Loan settlement question

rellie · Oct 17, 2007 1:42 pm

We are close to settlement, Yipeeee

Anyway, the bank told me today that before they release final payment they need to send a valuer out again, this can only be done when the house is finished and has to be at the minimum 7 days before settlement.

PD do their PCI 7 days before settlement date as this is when the issue the final invoice. Which means we will have to have the valuer out on the same day.

Do all or most banks do this, or is ours just being a pain in the jaxy ?

PhoenixStar · Oct 17, 2007 1:47 pm

Rellie, just co-ordinate it as best you can between builder and lender, give both plenty of notice and they should be able to work out a agreeable outcome. They can't be that inflexible? Or are they?

Hope all goes well..

vanderlay · Oct 17, 2007 1:53 pm

Ours is the same, 7 days, the house must be complete before they will send the valuer out.

So....our house is kind of complete, but if they are doing work to fix some issues will the valuer say its still incomplete????

Adrian B · Oct 17, 2007 1:55 pm

Most of the drive by anyway, see there is a house that seems to be completed, and then go home. Just point out to them that you wont get appliances until the day before / day of settlement due to theft possibilities, and make sure you have insurance on the house from the day before settlement. This can be arranged a few weeks before handover when you get the handover date.

sneakersss · Oct 17, 2007 2:04 pm

We didn't have to co-ordinate anything with the bank's valuer. I actually didn't even know which exact day they went and only heard that the valuer visited after the fact.

Anyway, I sent my CSR the details to contact my broker and they communicated between themselves regarding doing the final valuation and the building company sending the certificate of occupancy to the bank. I assumed they all just talked amongst themselves to get this stuff organised because we didn't need to be there while the bank did their valuation.

And I would also assume that the bank would understand why there is no appliances yet even if you didn't mention when they would be getting installed.

ahuang · Oct 17, 2007 3:13 pm

Just curious, what if the valuer reports a value that's lower than the bank's expectation, what happen next??

And the other way around, if it's higher, does it mean you can borrow more money for the landscaping, curtain, ...etc things that you need to do after hand-over??

sneakersss · Oct 17, 2007 3:37 pm

ahuang

Just curious, what if the valuer reports a value that's lower than the bank's expectation, what happen next??

And the other way around, if it's higher, does it mean you can borrow more money for the landscaping, curtain, ...etc things that you need to do after hand-over??

Errr...not entirely an expert at this finance thing...but I think your question is more related to getting finace approved PRIOR to actual construction beginning or a building contract being entered in to.

vanderlay · Oct 17, 2007 3:47 pm

YSSIM

ahuang

Just curious, what if the valuer reports a value that's lower than the bank's expectation, what happen next??

And the other way around, if it's higher, does it mean you can borrow more money for the landscaping, curtain, ...etc things that you need to do after hand-over??

Errr...not entirely an expert at this finance thing...but I think your question is more related to getting finace approved PRIOR to actual construction beginning or a building contract being entered in to.

Me neither - but thats what I thought. The valuer at the end stage is basically making sure the house is built according to contract. The bank will already have valued the finished product when approving the loan.

So they are just checking - that the house is built, it has 4 bedrooms, 2 bathrooms, Living, Dining double garage, etc etc.

kasiakm · Oct 18, 2007 7:08 pm

rellie

We are close to settlement, Yipeeee

Anyway, the bank told me today that before they release final payment they need to send a valuer out again, this can only be done when the house is finished and has to be at the minimum 7 days before settlement.

PD do their PCI 7 days before settlement date as this is when the issue the final invoice. Which means we will have to have the valuer out on the same day.

Do all or most banks do this, or is ours just being a pain in the jaxy ?

Our valuer came at the day of the handover. We did pay the final $$$ from our pocket and the bank has given us back the money next day.

I believe you need to push the bank. When wecalled the first time they said they will come whenever the valuer will have time. We called to the branch manager and the valuer showed up at the day of the handover.

cheers
kate

epiphany · Oct 21, 2007 12:30 am

Just be *really* sure the valuation has been done before you go to pick up your cheque, etc.

We have our mortgage with Suncorp & had sent in our valuation request within the 7 days, etc. I rock on up to the bank the day before handover...no cheque. The person who had done our valuation when the mortgage was approved no longer worked for them so, for whatever reason, they decided the final valuation couldn't be done & didn't tell me or anyone else. I had to wait for them to get someone out to do it & had to delay handover (PD were fine with this BTW). No apology from Suncorp & the valuer who did turn up didn't seem to know why he was there. Sigh.

Apparently it's not uncommon.