There is a house for sale in our area that is half finished, ie no internal fitout or gyprock – building has gotten as far as wiring and plumbing done. They have certificates for the slab and foundations but have just had the certificate for the frame revoked. The real estate is currently trying to get an engineers report on the framework. All work done so far has been owner builder according to a builders plans, who is happy to finish the remainder of the job if asked.
So, my question is – is the risk worth it and what kind of price should be offered? Land was bought in '09 for $210,000, owner's are looking for a figure in the $300,000's but I am thinking for the work that has been done this may be too much (split level home though so significant earth works and house is 35 squares).
What would need to be done to get the building finished? Is it worth project managing it ourselves or just get a builder in? How much extra cost is likely? (can you tell I have yet to do my homework and have only just found the property…)
Thanks!
Helen
I would say dont risk it…unless the price is extremely good, you have your finance in place and you choose to go with a different builder.Why?
1. Financing a half finished home is a headace and a pain! you be limited with lenders choice, rates arn’t as good as you would want it…terms aren’t any better
2. You must question WHY didn;t this guy finish the job? is there something fundamentally wrong? this is the same question the bank will ask will accessing your application.
3. You should be able to get a good price – lack of competition, because to be honest not a lot of buyers would consider this unless they are a builder themselves and have the money.Half finished home and owners builders = a curse in term of finance!
1. The streamline bank will only take the valuation of the land…the “half built home is worthless” as it’s consider bricks and cement only and if you struggle with the repayments the banks can’t sell bricks and cement
2. if you go with private banks that can take inconsideration the “half built home” the rate is 10%+
3. If you choose owners builders -LVR will be under 65%Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
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