subject: New Homes Orland Park Understanding Draws And Payment Schedules [print this page] Most professional luxury home builders work on a pay-as-you-go basis, receiving partial payments throughout the process. The payments for new construction, also called draws, typically are scheduled as a certain percentage of the total cost when specific stages of construction are completed.
The draws along with the money they release, keep the project moving. Builders, contractors and supplier expect to be paid for the work and materials they supply to you. Generally they expect these to be paid when their part or section of the work is completed.
When using a loan to pay for the construction of a new luxury home banks understand the draw process and will work with you, although they may limit the number of draw you can make.
In a typical custom luxury home building process the draws will work like this:
1st Draw pays soft costs such as permits, fees, architect, etc
2nd Draw pays excavator, septic and well (if applicable), pays for deposit on foundation
3rd Draw pays foundation contractor, puts deposit on lumber, windows, and doors
4th Draw progress payments to framer, electrician, plumber
5th Draw pays framer for completion, puts deposits on roofing and siding
6th Draw pays plumber, electrician, and HVAC contractors, pays for roofing and siding, and puts deposits on insulation and drywall
7th Draw insulation and drywall contractors are paid in full, deposits paid on interior trim, cabinets, countertops and painter
8th Draw Interior doors, cabinets, countertops and painter paid in full
9th Draw Flooring, appliances, and finish plumbing and electrical paid in full
As you can see, draws involve a series of payments, deposits, and the final payments. Organizing and understanding them will allow you to keep the contractors and materials arriving on the job site and the building of your home moving forward.
Making sure you and your builder understand the draw schedule can make the custom luxury home building process much easier. It will eliminate any hassles that could arise over money.
