the contract will specify payment schedules that
generally have 5-6 or more draws during the contract
period
a draw will be made at the end of a home remodeling
phase to pay for work completed
about 5-7% of the initial bid is enough money to
begin the project — builders will then submit
invoices for a draw
you should maintain a minimum 10-20% retainer at
the final draw — this draw is released upon final
inspection of the home remodeling
allow anywhere from 2-4 weeks on the retainer to
confirm that everything is in working order —
once the money leaves your hands, you will find it
difficult to get the required attention
if a lender is doing the financing, have the lender
make payments directly to the owner, not the contractor,
or have the payments issued in both names
this way you can check invoices and review work
orders to confirm that you are not being billed
twice or for items not part of the project
get in writing that the lender must receive or satisfy
all lien releases from suppliers and subcontractors
before issuing any payment and that a copy be supplied
to you
lenders will often inspect the premise prior to
release of a funds — they do not inspect for
quality
you may want to hire your own inspector to check
the quality of work before signing any phase completion
form
upon final payment, make sure
you have all final releases of the lien and a copy
of the final invoice showing that the contract has
been paid in full
upon final payment, have the
home thoroughly inspected, make sure you have in hand
all final releases of the lien and a copy of the final
invoice showing that the contract has been paid in
full
