When a home builder collapses, it can have far-reaching implications for the parties involved, including homebuyers, lenders and other stakeholders. Thankfully, brokers can often be of great assistance during these times.
As a broker, you may find yourself equipped to assess your client's situation and provide guidance and support. Brokers are well-positioned to review loan agreements, liaise with lenders and explore alternative financing solutions.
Paul Nelson, from Nelson Financial, recently helped a client whose builder had collapsed. His clients were close to the end of the build but had not completed their final stage payment. Paul assisted his client by contacting AFG Home Loans and was able to get agreement from the lender to allow the final stage of around $17k to be finalised by external tradespeople on an invoicing basis. Their Edge product accommodated this change in process to assist the client to complete their property quickly, rather than having to coordinate a whole new building contract. The usual inspection was done at the end of the works to ensure a certificate of occupancy could still be issued.
We're increasingly seeing lenders in the market issue process documents and guidelines for clients who have experienced a builder collapse to help clarify the next steps and their options through this difficult time. CBA and AFG Home Loans are great examples.
Them Lam, General Manager of Aggregation at AFG, has been approached by several brokers seeking assistance on behalf of their clients. Them's advice to brokers is to first contact the lender to understand their process, requirements and next steps. If permitted, brokers can also often utilise their industry network of real estate, legal and construction experts. Brokers who can utilise their industry networks can prove invaluable in helping their clients find reputable builders, construction companies and professionals who can assess the property's condition and provide estimates for completing the work.
It's important to note that the extent of your involvement as a broker and the specific services you offer may vary depending on your expertise, experience, and the regulations in your jurisdiction. Please make sure you stay informed about relevant laws, regulations, and industry practices to assist clients in these complex situations effectively.
Your expertise, networks, and ability to navigate through challenging circumstances can provide invaluable support to your clients. By working closely with lenders and industry professionals, you can help clients find feasible solutions and facilitate the completion of their dream.
