Closing Out Your Project
Learn how to closeout your project strong so you can finish on-time and maximize your profitability.
Overview
It's easy to get careless once your Rehab Project is substantially complete, but it's important to stay focused so you can finish your project strong.
In this lesson we will discuss the steps you need to take to ensure that the work is completed and the property is looking it's best before you list the property for sale.
In this lesson we will discuss the steps you need to take to ensure that the work is completed and the property is looking it's best before you list the property for sale.
Punch List Items
Once your project is nearing completion you need to schedule a 'Punch List Meeting' to walk through the property with your Contractor and make a comprehensive list of items that need to be fixed and completed before you list your property for sale.
Punch List items are generally small repairs or issues such as paint touch-up, missing trim pieces, torn screens, sticking doors & windows, etc. All of these items should be noted on a 'Punch List' that is jointly developed by you and the Contractor.
Here's what you'll need for your Punchlist Meeting:
Punch List items are generally small repairs or issues such as paint touch-up, missing trim pieces, torn screens, sticking doors & windows, etc. All of these items should be noted on a 'Punch List' that is jointly developed by you and the Contractor.
Here's what you'll need for your Punchlist Meeting:
- Punch List Checklist - Bring a checklist to make sure you thoroughly examine every aspect of the property. Download Our Punch List Checklist Template
- Camera - Take pictures of areas that need to be fixed for repaired.
- Blue Painter's Tape - Bring a roll of blue painters tape and mark all items throughout the property that need to be fixed.
Once you've created your list of Punch List items, set a completion date for your Contractor to complete the Punch List work so you can get your Open House scheduled as soon as possible!
Final Payments & Lien Waivers
Final Payments
Once the Contractor has completed the items on the Punchlist you can payout the Final Payment with the remaining Contract balance due to the Contractor.
Your Final Payment is generally the 10% Retainage amount that you have held back from each Progress Payment on the project.
For example, on a $40,000 remodel project with a 10% retainage would have $4,000 leftover as the Final Payment.
Your Final Payment is generally the 10% Retainage amount that you have held back from each Progress Payment on the project.
For example, on a $40,000 remodel project with a 10% retainage would have $4,000 leftover as the Final Payment.
Final Lien Waiver
When you make this Final Payment you need to make sure you also receive a signed Final Lien Waiver from your Contractor.
The Final Lien Waiver is a legal document which states that the Contractor has been paid in full for the work completed and no longer has rights to impose a lien on the property in the future.
Without a signed Final Lien Waiver a Contractor could put a lien on your property which could prevent the property from being sold until the lien is paid and resolved
The Final Lien Waiver is a legal document which states that the Contractor has been paid in full for the work completed and no longer has rights to impose a lien on the property in the future.
Without a signed Final Lien Waiver a Contractor could put a lien on your property which could prevent the property from being sold until the lien is paid and resolved
Documentation
You will want to keep a copy of all of the documents and paperwork that you have from your renovation including your Building Permits, Contractor Warranties, & Material Warranties. This documentation will be needed for your Seller's Disclosures, Appraisal and provide a
- Copy of Permits - In most states, the Seller's Disclosure form will ask you about permitted work that was performed on the property. A copy of any Building Permits can provide proof and peace of mind to any buyer that all work was permitted and performed based upon local building codes and standards.
- Contractor Installation warranties - If any of your Contractor's work is covered by an installation warranty you will want to provide the Contractor's warranty information so they can get any issues or repairs resolved that are covered by the warranty.
- Material & Equipment Warranties - All new finish materials, appliances, HVAC equipment, & fixtures generally have a warranty. You will want to provide any material and equipment warranties to the home buyer in case of defects or failures.
- Lists of Repairs - Appraisers will generally require a list of repairs to justify the price increase in your home valuation.
