By Chris Wood
Draw inspection reports are an exceptionally useful tool. Through regular on-site inspections, a draw inspector reviews and confirms progress of a construction project, becoming the eyes and ears of lenders and banks while protecting investments and reducing their risk.
While many inspectors are seasoned pros, some may overlook key steps in the process and completion of the report, causing mishaps and mistakes. These errors could lead to major problems down the road. To help you along the way, we’ve collected a few of the “top tips” and dos and don’ts when compiling and completing the report.
For each order, it’s crucial to understand your customer’s expectations. When completing the inspection, always remember… the builder is not the customer. Builders are looking to obtain the highest amount of funds from the lender for work completed. Some builders may try to influence the inspector’s report to portray their point of view of completed items. When completing a draw inspection, always remember the inspector acts on behalf of the lender – not the builder.
Before stepping foot on a property, be sure to read through the paperwork, directions and other documentation accompanying to the report, as viewable on a mobile app, website or email. Generally, a checklist is included with every inspection, laying the groundwork for what to do, how many photos to take, and what specifics should be noted. Reading through the information and following directions will definitely help you complete the inspection accurately the first time.
The draw inspection report process moves quickly, so time is of the essence. As an inspector, if you accept an order to fulfill a draw inspection, reach out to the builder or other representative and schedule the inspection as soon as possible. At Trinity, inspectors are expected to contact the individual within minutes but at most, four hours after receiving the order. This is a required step, and if an inspection cannot fulfill this timeline, notify your scheduler and alternative plans will be made.
Example: If an inspector receives an inspection order at 8 AM, the inspector should communicate the scheduled inspection time (or a message has been left/waiting on call back) by 12 PM (at the latest.)
When visiting the property, the goal is to complete the inspection the same day but certainly within 24-36 hours. As you progress through the order or if delays or issues are encountered (builder preferences, delays, etc.), communicate each step of the process to the bank or company ordering the inspection. Not only is the ongoing communication welcome but it is a requirement to accept the inspection order. Indeed, the more communication, the better as it conveys progress is being made consistently and intentionally while encouraging future orders for the inspector.
Inspection reports are packed with details, so it’s vital to complete the report form correctly the first time. Whether completing the order on a mobile app or on an email-based system, below are key factors to help you along the way:
1. Verify the Site – A KEY step in the process. The number one issue that speeds the process for both inspectors and lenders is ensuring the property address is visible on the property. Inspectors should ask the builder/borrower if the address is posted before you visit the property. Once you arrive, snap a photo of the address through one of the following:
a. Photo of the address on the property or on the house
b. Permit identifying the property
c. Bracket the address – take photo of the address on the left and the address on the right of the specific property
2. Take Many Photos – As the saying goes, ‘photos are worth 1000 words,’ so provide a pictorial view into each line item’s progress to validate your findings.
3. Finish the Full Inspection – Once you arrive to the site, make sure to ask for full property access to inspect and photograph the entire structure. You are acting as the bank/company’s eyes and ears, so be thorough.
4. Estimate the Percentages Basics – Review and estimate construction progress on each line item. To complete the form, document correct percentages reflecting work completed. Never discuss or share results or promise percentages for line items when speaking to a builder. The lender/customer may provide funds to the builder different that was the inspection report provides.
5. Soft Cost Line Items – Soft costs are non-tangible items on an inspection report, including such services as insurance fees, permits, and/or taxes. From an inspector’s standpoint, these components can’t be inspected or photographed, so leave these fields blank for the bank or company to complete, unless you receive different instructions.
6. Finalize and Submit the Report – Once everything is completed, the inspector submits the report. In case of questions or additional further information, be available to the lender or company finalizing the report.
As the saying goes, “You can catch more flies with honey than vinegar,” so remember to be polite, listen intently, follow directions, and take constructive criticism well. Not only does this better your skills personally and professionally, but it grows positive relationships between parties for years to come.
Before you even step on the property, the above tips will help prepare you for on-site success. At Trinity, we are committed to providing the highest quality experience and most thorough draw inspection knowledge in the business. For this reason, we’ve created drawinspector.com, a best-in-class draw inspection training course. Now available, The Fundamentals of Residential Draw Inspections allows you to become a Certified Draw Inspection Professional® within the construction lending industry, focusing student understanding and success.
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