New build with temporary countertops

[Jayjay25]

On a different note, has anyone every paid a contractor 100% for a job before it’s 100% complete and tried to get a call back? I made that mistake…..once.

 

[Dublin ohio]

So let's be simple and basic here. Say a home is valued at $500,000 if 100% complete. Say that same home is 99.95% complete except for the counter in the kitchen.

Do your own math here. I'll say a granite counter might cost $2,000. A temporary POS wood counter might cost $200. A difference of $1,800. $1,800 divided by $500,000 = .0036%. Move the decimal.

So..................you can provide an opinion of value that precise?

Good for you mate. smh

So let's be simple and basic here. In this case. It is not a "value" problem. It is a lender/builder/borrower problem. The form is straight forward with the question it asks. There are 2 answer choices. Yes or no. Can't get more simple and basic than that.

 

[Tru Red]

So let's be simple and basic here. In this case. It is not a "value" problem. It is a lender/builder/borrower problem. The form is straight forward with the question it asks. There are 2 answer choices. Yes or no. Can't get more simple and basic than that.

Follow this post from the start. In my first answer I wrote YES. This response was directed at someone else who was making no sense. Your point here by quoting me?

 

[Dublin ohio]

Follow this post from the start. In my first answer I wrote YES. This response was directed at someone else who was making no sense. Your point here by quoting me?

Part of your first post
"The quality of one temporary counter in a brand new home would not have any effect on the overall opinion of value anyways."

Like I said. Not a value problem

 

[glenn walker]

On a different note, has anyone every paid a contractor 100% for a job before it’s 100% complete and tried to get a call back? I made that mistake…..once.

This is whats so irritating about this forum as its readers skip and dont read how the OP situation is handled on a FHA New Build. CORRECT nobody ever pays a contractor for something like this upfront and the FHA DE Endorsed Underwriter has to receive a estimate of what the Borrower has been promised and contracturally agrred to finish say the kitchen counter tops. She also adds a say 10% for a minor change but lets say the New Counter Tops are say $20.000 that $20,000 is with held from the seller or contractor in a escrow account until work has completed . Normally it has to be done within 30 days or less. If for any reason the seller or contractor flakes out the seller-or contractor is screwed and he eats that $20,000 bucks and lender then requires the borrower to have it completed by another legitimate contractor at a equal or lower price unless they pay the difference in cash. So if new FHA construction approval is preventing you from closing on schedule, an escrow hold back may be an appropriate solution. An FHA escrow hold-back is the act of collecting additional funds at closing that will be refunded after necessary repairs have been made to the purchased property. So all the BS about it cannot be done is not true and its done all the time . As we see interest rates rising and builders having supply chain delivery problems this is now its fairly normal and common . We ordered some quratz counter tops eight weeks ago and now they say it may be another three to four weeks due to sully chain issues.

 

[Jayjay25]

This is whats so irritating about this forum as its readers skip and dont read how the OP situation is handled on a FHA New Build. CORRECT nobody ever pays a contractor for something like this upfront and the FHA DE Endorsed Underwriter has to receive a estimate of what the Borrower has been promised and contracturally agrred to finish say the kitchen counter tops. She also adds a say 10% for a minor change but lets say the New Counter Tops are say $20.000 that $20,000 is with held from the seller or contractor in a escrow account until work has completed . Normally it has to be done within 30 days or less. If for any reason the seller or contractor flakes out the seller-or contractor is screwed and he eats that $20,000 bucks and lender then requires the borrower to have it completed by another legitimate contractor at a equal or lower price unless they pay the difference in cash. So if new FHA construction approval is preventing you from closing on schedule, an escrow hold back may be an appropriate solution. An FHA escrow hold-back is the act of collecting additional funds at closing that will be refunded after necessary repairs have been made to the purchased property. So all the BS about it cannot be done is not true and its done all the time . As we see interest rates rising and builders having supply chain delivery problems this is now its fairly normal and common . We ordered some quratz counter tops eight weeks ago and now they say it may be another three to four weeks due to sully chain issues.

Correct. This is the way it should be handled, but only if the appraiser states the home is not complete on the 1004d.

 

[Dublin ohio]

Correct. This is the way it should be handled, but only if the appraiser states the home is not complete on the 1004d.

That is really the only way to handle the scenario in the op. But some contend that you should mark it complete and include a dissertation telling the lender how they should handle it.

 

[Mark K]

That is really the only way to handle the scenario in the op. But some contend that you should mark it complete and include a dissertation telling the lender that's its actually really, really almost complete, that all builders can be trusted to come back to fix a 'minor' item after they've already been paid for it and how they should handle it.

Slightly amended.

 

[J Grant]

Correct. This is the way it should be handled, but only if the appraiser states the home is not complete on the 1004d.

an escrow hold back agreed to between a purchaser and a builder has nothing to do with whether the appraiser states home is complete or not on the 1004D. The escrow hold back is agreed to as a contract negotiation to close and usually happens before the appraiser visits for a final inspection. The appraiser visit for 1004D is for the lender, so they can say the house is complete or not and then close .

I believe Fannie et al considers a home complete it it is 98% finished ? ( will have to check tie number they specific ) They recognize a few miscellaneous items might not be finished but the house is complete as to it is finished for habitable and ready to be lived in.

 

[Jayjay25]

an escrow hold back agreed to between a purchaser and a builder has nothing to do with whether the appraiser states home is complete or not on the 1004D. The escrow hold back is agreed to as a contract negotiation to close and usually happens before the appraiser visits for a final inspection. The appraiser visit for 1004D is for the lender, so they can say the house is complete or not and then close .

I believe Fannie et al considers a home complete it it is 98% finished ? ( will have to check tie number they specific ) They recognize a few miscellaneous items might not be finished but the house is complete as to it is finished for habitable and ready to be lived in.

I have been sent out to properties many times when they are not 100% (or even 98%) complete and the builder, realtor and buyer still wants to close. I complete the 1004d as “not complete” and afterwards, if they still want to close, they escrow.

I have never heard that Fannie states the home can be only 98% complete and can still be considered complete. Would be great to see where that policy is stated. I know it would make a bunch of my clients happy to know this as well….