C 5.0
Paying for a house in stages
Nobody pays for a house all at once. What decides whether the payment plan protects you is whether each release is attached to finished work or merely to a date.
A draw schedule is the list of moments at which money moves, and what has to be true of the house before each one.
The distinction that matters is small to write down and large to live with. A schedule can release payment because a certain date has arrived, or because a certain amount of work has been completed and inspected. The first is a calendar. The second is a statement about your house, and it is the only version that keeps the money and the construction moving at the same speed.
Ours attaches every release to a stage that somebody can stand in front of and verify. The stages are the same ones set out on the process page, which is deliberate: there is one sequence for the build and the money follows it rather than running on a track of its own.
What a release is tied to
- Site work complete and the foundation poured and inspected
- Framing complete, roof on, windows and exterior doors installed
- Mechanical, electrical and plumbing rough-in complete and inspected
- Insulation and drywall complete
- Cabinetry, finishes and fixtures installed
- Certificate of occupancy issued and the punch list signed
The exact stages and amounts for your project are set out in your contract before it is signed. This is the shape of the document, not a substitute for reading yours.
C 6.0 · Staying level
Payments should never run ahead of the building
The purpose of tying releases to completed stages is to keep the amount paid roughly level with the amount built. When those two drift apart, the party that is ahead has very little incentive to press on and the party that is behind has very little leverage, and neither of those is a good position for a project that still has months to run.
It protects both sides, which is worth saying plainly. A builder who has funded three months of labour and material out of pocket is a builder under financial stress on your job, and financial stress is where corners start getting considered. A schedule that keeps pace with the work means nobody is carrying the other, and the conversation stays about construction.
It also gives you a real instrument if something goes wrong. If work stalls, the next release simply does not come due, because its condition has not been met. You do not have to argue about it or invoke anything; the schedule already says so. That is a quiet protection you never notice on a project that runs well.
C 7.0 · With a lender
What a construction loan adds to the process
Most people build with a construction loan, and it changes the mechanics in a way that is worth understanding before you are inside it. The bank does not hand over the whole amount at closing. It funds the build in the same stages, and before releasing each one it sends somebody to look at the house.
That inspection is a genuine benefit rather than an obstacle. It is an independent party, paid by the institution lending the money, whose job is to confirm the work claimed has actually been done. On a well-run project it is a formality. On a badly-run one it is the alarm that goes off early.
What it demands from us is that the draw schedule in the contract lines up with the one the lender expects, and that the paperwork supporting each request is in order and on time. A mismatch between those two schedules is a fixable problem in week one and a two-week delay in month six, so we resolve it while the loan is being set up.
Ask before signing
- What condition triggers each release, in the builder's own words?
- Who verifies that condition, and does anyone independent look?
- How long between a request and the funds actually arriving?
- What is retained until the punch list is signed, and when is it released?
- Does the contract schedule match the lender's schedule exactly?
Five questions, one meeting. They are the cheapest hour in the entire project.
The rest of the money documents
The draw schedule decides when a number is paid. These decide what it contains and how it is allowed to move.
What an allowance actually promises, and what it costs you when its basis is left unwritten.
The single mechanism by which anything is added, removed or altered once building has started.
Where the cluster starts: the single figure everyone compares builders on, taken apart into the three things that actually produce it.
Talk through the payment structure before you commit
Bring the draw schedule from any proposal you are holding, and your lender letter if you have one. We will walk through what each release is attached to and where the two documents disagree.
River Rock Builders, LLC · 2024 Arkansas Valley Dr, Little Rock, AR 72212