If you are handling a construction project of any scale, you will need to know if the project itself is on the right track. Whether it’s a residential building or a commercial asset, making sure you spend the right amount of time and resources is critical to the completion of the project
This would require close coordination between the builder and the lender. For its part, the lender releases funds for labor and materials based on the progress of the construction. Then again, how does a lender know how much money is actually needed based on the builder’s request?
This is where construction draw inspections come in handy. In this article, we will look into the benefits of a construction draw inspection and how it can help save costs and prevent construction delays.
What are Construction Draw Inspections?
When it comes to confirming a builder’s request for funds, a lender will need to conduct a thorough on-site inspection and check the actual progress of the construction. The lender will need to get a construction draw inspector from companies like Northwest Construction Control to visit the site and check what’s actually happening on the ground as compared to the builder’s request.
Apart from checking the project’s timeline, the construction draw inspector will also review the construction budget and the materials and manpower that are available on the project site. Based on the findings of the inspection, the lender can validate the draw request, disburse the right amount of funding, and ensure that the funds do not go beyond what is needed by the project.
What Happens When the Inspector Finds Issues in the Draw Request?
If a draw inspector notices discrepancies between the request and their on-site observations, they can reach out to the project manager and work towards ironing out these issues before the builder proceeds to the next stage.
Typically, the inspector may flag such issues as overbilling. In such a case, the inspector may get the builder to prepare a new draw agreement with an adjusted amount request and submit it to the lender. On the other hand, the builder can justify their initial amount request by providing complete documents. If everything is in order, the draw inspector can approve the draw request.
What are the Benefits of a Construction Draw Inspection?
Construction projects cost a lot of money and project owners will have to maximize every cent that goes towards them. A lender needs to know how the project is going before dispersing the needed funds. For this, they will need to have a construction draw inspector review the draw request and compare them to the on-site representation. By taking every single penny into account, a construction draw inspection helps save costs and maximize your budget for the total completion of the project.
Draw inspections usually occur at the end of a construction phase. For the builder to proceed to the next phase, a draw inspection is required. The results of the inspection ensure that the builder gets paid to continue with the project.
Aside from validating fund dispersals, construction draw inspections can also help with making sure that a project follows the established timeline. Most construction delays are the result of funding issues. Construction projects are funded by high-risk construction loans that require a long time to process. A construction draw inspection helps ensure timeliness by identifying construction issues and preparing change orders that can modify the scope of the project.
All in all, a construction draw inspection is essential to making sure that a project goes according to plan. It also helps lenders secure their investments until the project is completed.
How to Make Sure a Construction Draw Request Gets Approved?
As a form of risk mitigation, lenders will need to be thorough in approving a builder’s draw request. For everything to go well throughout the construction process, builders will have to come up with a draw request that reflects the actual completed work. An accurate request avoids delays in fund dispersals and ensures that builders get paid in a timely manner.
It’s also important for the builder to collaborate closely with the draw inspector. From granting access to the construction site to providing important project documents, helping the draw inspector to do their work helps fast-track draw requests and ensure that the project gets completed in time.
As a construction lender, you will want the project owner to accomplish their goals. At the same time, you also need to protect your interests. A construction draw inspection helps with both, so look for a company that can help ease up a project and maximize your costs!