Evaluating the Impact: Quantity Surveyor Reports for Bank Loans in Residential Construction Financing

 

In recent times, there has been an emerging trend among banks, brokers, and financial institutions, where homeowners and owner-builders are increasingly requested to furnish a Quantity Surveyor Report for Bank Loans or a Bank Estimate Report as part of their residential loan application. This report holds significant importance as it offers a thorough assessment of the construction project’s cost, aiding financial institutions in evaluating the feasibility of the loan.

Typically, these reports are mandated prior to the construction commencement or the initial loan drawdown. This timing allows banks to gain an accurate understanding of the overall project cost and associated risks. However, there might be scenarios where a bank necessitates a report at any phase during construction, owing to factors like fluctuations in material or labor costs, unforeseen delays, or a reassessment of the loan application.

Apart from the Quantity Surveyor Report for Bank Loans, banks may also stipulate a Payment or Progress Claim Inspection Report. This detailed evaluation of the construction progress helps banks verify that the funds are utilized for their intended purpose, ensuring the project aligns with the planned progression. The report serves as a mechanism to keep homeowners or builders on track with their construction endeavors, offering a comprehensive overview of their achievements to date.

When selecting a Quantity Surveyor for a Bank Estimate Report, banks commonly insist that the Quantity Surveyor (QS) holds Registered Membership with the Australian Institute of Quantity Surveyors (AIQS). This requirement ensures that the QS is fully qualified, possessing the necessary experience and expertise to furnish an accurate and comprehensive report. The AIQS, serving as the professional body representing the interests of Quantity Surveyors in Australia, plays a pivotal role in setting industry standards and guidelines.

By mandating that a QS is a Registered Member of the AIQS, banks ascertain they are collaborating with a professional well-versed in delivering precise cost estimates and project assessments. This, in turn, empowers banks to make well-informed decisions regarding loan applications, providing them assurance that allocated funds are utilized judiciously.