Unfinished unit - issue with finance??

[BlueSkyDay]

Hi All!

Looking at buying a 2 bedroom unit as an IP. The unit is a new build and has a certificate of occupancy, however it is being sold unfinished as it's missing floor coverings, window treatments and light fittings.

Although the builder has offered to finish these items at an additional cost, I'd rather buy it unfinished and complete it myself.

However I'm worried that the bank (CBA) will have an issue with it not being in rentable condition at settlement. Or will they not care? Anyone have any thoughts or similar experiences?

Thanks!

 

[Mick C]

May be valued as inhabitable and it may be subject to quotes to finish the project to make it habitable else your valuation will def fall short of the purchase price.

 

[Mick C]

pro of this purchase is that you have the certificate of occupancy so it's considered a home from the banks point of view

It's more common to see unfinished projects that's no where near getting the "certificate of occupancy" ie frame work done only and being sold for land price.

 

[Peter_Tersteeg]

There's a good chance that it won't be a big deal. The easiest solution is to go with a lender that will simply use a drive by valuation or at least order the valuation up front so you can vet the comments prior to submitting the application.

 

[Mick C]

Well the lender does ask " the the place habitat as one of the questions" once you tick no it's full val...

+ im pretty sure the sale contract will have something about the unfinished project and buying the unit in the condition as it is...OR at least the original plans

 

[tobe]

What might happen is the valuer picks it up, and the assessor asks you to show you have the funds to complete the works.

Alternatively the valuer might detract the cost of the works from the purchase price to reach the valuation, which again, shouldnt be a big deal if you can show you have the diference in cash.

 

[BlueSkyDay]

Alternatively the valuer might detract the cost of the works from the purchase price to reach the valuation, which again, shouldnt be a big deal if you can show you have the diference in cash.

If I am purchasing at a discount rate to market value because the carpets/blinds/light fittings aren't included, wouldn't the bank value as it is rather than deducting the costs again?

 

[Mick C]

If I am purchasing at a discount rate to market value because the carpets/blinds/light fittings aren't included, wouldn't the bank value as it is rather than deducting the costs again?

The valuers values the property based on COMPARABLE sales....they wont be able to find any property sold in the last 6 month that not inhabitable with the area. So they will compare your property to completed ones and go backwards.

 

[HLE]

Mick C is correct on how the valuation is conducted by most of the bank's valuers out there. Unless you have some quotes and funds to show you will complete it then the assessor of the bank might see that as a concern.