Asking for invoices to be paid as part of contract?

[spludgey]

I recently made the following offers. Will that present to be a problem with the bank at all if the vendor goes for option 3?

1. $185000 on standard terms.
2. $190000 on a three month settlement with early access to do renovations.
3. $205000 on a three month settlement with the vendor paying invoices of up to $10000 for materials and labour to renovate the property prior to settlement.

It's St George by the way and I'll be needing LMI.

I can see how they might think that the $10000 is on top of the house price (which it kind of is) and then reduce the money they'll lend me by $10000. But on the other hand, if I spend $10000 renovating the house, the equity in it should increase by far more than $10000.

 

[Terry_w]

It could be.

I guess it will be in there as a special condition which the lender may request - copies of the special conditions. I did a loan recently where the lender wanted the whole contract of sale 100 pages or so.

 

[TheOnlineAgent]

Draw the details up in a side agreement (deed) to avoid any valuation issues. Thats not to say the valuer won't smell something but if its in the contract it will be discounted automatically.

Sign subject to finance?

 

[Aaron_C]

If it's in the contract itself the valuer will always knock it down accordingly. Would suggest a full valuation first.