Browse Forums Home Finance 1 Apr 16, 2014 12:59 pm Hi I am renovating for 200,000, my broker advised me to get a quote for 230,000 because 95% of the time bank devalues properties and gives less at 5th stage. Now that I have added few things to the contract, builder is getting greedy and he wants to keep the contract at 230,000. For the sake of getting him to agree I told him bank refused the 230,000 and is asking for a contract of 200,000. To this he has removed essentials like kitchen and drive way and made a new contract for 200,000. infact, bank has approved 230,000 but I have not informed the builder about this. How do I get the bank to give me the remainder 30,000 and I go shop around for a cheaper kitchen and driveway? Any Advice? AB Re: Building for less than contract value. 2Apr 16, 2014 1:10 pm The valuer will want to see a kitchen and driveway before they handover a final progress payment (as it was on the "contract" that it would be done). The only real way is to pay for it yourself (your own funds, personal loan etc) and arrange with the builder for your independent contractors to fit the kitchen and driveway prior to the final inspection... It sounds like this builder is seriously untrustworthy and may not agree to them being onsite till the final payment to him (and handover occurs) which cant happen as the bank valuer wont sign off with those included items not fitted. Plus, the bank thinks it's paying the builder $230k... but you're not, you're paying him $200k. Most likely they'll release the remaining funds to the builder, because that's what they have noted. Or the builder will invoice the last payment and there'll be $30k left over, but that doesnt mean the bank will just hand it over to you either... It just wont be drawn down on. And if the builder does get it, I dont think he will happily hand you over that $30k. And then you're screwed... I would abandon this whole plan, it will bring you nothing but grief. Thread: viewtopic.php?f=31&t=66299 Slab: 16/6/14 Frame: 4/7/14 Roof: 22/7/14 Lock Up: 20/8/14 Fixing: 26/8/14 PCI: 9/10/14 Handover: 20/10/14 Re: Building for less than contract value. 3Apr 16, 2014 1:50 pm Thanks – do you think I should tell the builder that I have an approval for 230K now and if he can pass the 30K to me? Or wait until 5 stage and come up with a new story that the bank has approved more funds? Re: Building for less than contract value. 4Apr 16, 2014 2:16 pm Do you think even if he says "Yes, i'll give you the funds" that he actually will? You wont have any legal recourse to recover them if he doesn't. Honestly, building is stressful enough as it is, and this has (already) gone pear shaped for you... anything not in writing and contractually enforcable will be a nightmare. Even those seemingly iron clad contracts with builders can easily go pear shaped and people wind up out of pocket. If you do proceed down this path (not recommended). Tell him about the $230k now and you will be able to run away and cut your losses if his response isnt to your liking. Or risk waiting till stage 5 and him not agree to hand you the $30k. Or what is most likely to happen, he will agree - then reneg and pretend it never happened and you're stuck on his word and nothing else. Get him to actually do the kitchen and driveway included in the $230k. AND get a new contract from him that matches what you've given the bank... or just tear the whole thing up, walk away and start again with a new builder (what I would do). All the best. Thread: viewtopic.php?f=31&t=66299 Slab: 16/6/14 Frame: 4/7/14 Roof: 22/7/14 Lock Up: 20/8/14 Fixing: 26/8/14 PCI: 9/10/14 Handover: 20/10/14 Re: Building for less than contract value. 6Apr 16, 2014 3:35 pm Ari It sounds so dodg*y. Is it really worth it? *can't believe that gets picked up in a swear filter The D0DGY filter gets me all the time... Thread: viewtopic.php?f=31&t=66299 Slab: 16/6/14 Frame: 4/7/14 Roof: 22/7/14 Lock Up: 20/8/14 Fixing: 26/8/14 PCI: 9/10/14 Handover: 20/10/14 Re: Building for less than contract value. 7Apr 16, 2014 4:41 pm You are playing two way dishonesty with your bank and your builder and you think you won't get burnt? Get a cold shower! Foremost Building Expert in Australia,assisting with building problems/disputes, building stage inspections,pre-contract review advice for peace of mind 200 blogs http://www.buildingexpert.net.au/blog Re: Building for less than contract value. 8Apr 16, 2014 5:41 pm building-expert You are playing two way dishonesty with your bank and your builder and you think you won't get burnt? Get a cold shower! +1 The Harder You Try - the Luckier You Get ! Web site http://www.anewhouse.com.au Informative, Amusing, and Opinionated Blog - Over 600 posts on all aspects of building a new house. Re: Building for less than contract value. 9Apr 23, 2014 8:45 pm This sounds like a really terrible plan. First of all, I think you were ill advised by your broker and cannot understand why they would give you such advice, except maybe in the hope that you would just take the $230k and he would get more commission. Secondly, banks are not stupid. You won't be able to just get the money to shop around, that is a personal loan. They just won't give you the final $30k. I'm wondering why the builder has taken it upon themselves to take your kitchen out of the contract? Why don't you just ask them to remove the items that you bumped up to $230k? Also, I don't think that the builder is going to falsely invoice the bank for $30k of extra work and then give you the cash so that a competitor can do the work instead of him. Sounds like you need to walk away and start again, being honest about it. There's plenty of hoops to jump through to make sure people don't do these kinds of things so I don't think you will get the outcome you want. Good luck. My build thread: viewtopic.php?f=31&t=70636&p=1161767#p1161767 at most it will have a short lintel which could be moved up just below the ceiling or even above. Above means you need to patch the cornice and might need to deal with… 2 61569 As a tradesmen get a private inspector although I don't think there worth it in their profession themselves the reminder they serve to the tradesmen doing the work is… 3 27608 They make the room much easier to clean for one, reflect more light (if light colour tiles are used), and you dont end up with dust on the top edge of tiles (cause most… 3 9811 |