Building House & Inspections from bank?

Hi All
i was speaking with a friend who was building a new house. I asked if he was getting any inspections done along the way at certain stages, eg slab, pre-plaster, etcetc. He said no because his broker told him his bank will get their people out to do the checks for him before they release money to the builders so he doesnt need to waste his money doing this.
Ive never heard of this before and asked a friend who's built before and he doesnt remember his bank doing this as well.
Does anyone know if banks actually do this? think he said he was with NAB?
I know its not worth saving a couple grand when building but it be good to know theres a second check going on of some sort
thanks
 
Builders typically get paid progress payments at various stages of the build.
1. Deposit
2. Slab down
3. Frame up
4. Lock up
5. Pre-paint
6. Final
The above may not be exactly the same for all builders in all states but it will be similar as a process.

If the building is being financed, then the lender will either engage a Quantity Surveyor or send the local Bank Manager to check that the stage of the build, that the builder's progress payment is being invoiced for, is actually complete.

There are charges for this, laid out in the construction loan docs that your friend would have signed. There is no additional requirement for him to arrange his own inspections.
 
I just asked this to Westpac Mortgage Centre on Friday. They said the same as propertunity, they send someone to inspect at each of those stages, he signs off, I sign off and then a chq is sent to the builder.
 
thanks for the reply guys
Are these guys actual builders that know what they are looking for?
if you were building is there a reason why we should get someone to check
these stages as well if the banks already doing the checks?
 
The lender is not checking for quality of workmanship. They are checking to see if enough of the building works are completed to make them comfortable enough to lend further funds on.
 
lobboroz, westpac didn't say who would do the checking but I really doubt its going to be a builder. It could be just about anyone and I think its up to you to check you are using a good builder and trust him.
 
ahhh thanks for clearing this up
i might inform my friend this as well
the way he explained it and was explained to by the broker
was that they were checking the workmanship.

Anyways ill get him to verify this again with his bank but im sure you guys are right.
 
Obviously different here in WA.
I'm halfway through building at the moment. The builder sends me a notice when each stage is complete and I just fax confirmation to the bank as each stage is complete for them to release the funds. No one else checks,the bank relies on me to let them know.

I guess we're just more trustworthy over here.:D
 
I think there is confusion here between mandatory inspections by the building rejector and inspections by the bank. The bank won't be inspecting on behalf of the rejector, it will be for their own purposes. You should also be aware that the building inspector is not looking at the quality of the work either.

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