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Your bank should provide you with all the information. I never dealt with home loans but on commercial ones, they provide a series of forms that have to be filled out in a specific order. The first is usually a listing of vendors names, addresses, phone numbers, ect that should be completed before anything else. Following this, they should provide you with payment planning forms. These are usually broken up by completed portions of the job, dates or monthly. Normally on commercial loans, bank will pay according to portions of the job. This means that when the excavator is done digging for the foundation, the site will be inspected and payment rendered for that vandor and the completed portion of the job. Once the footer is layed and inspected, this will get inspected masonary contractor will be paid. The process goes on to completion. Some banks will offer monthly or quarterly payment plans depending on the size of the project. These allow for payment of those vendors who did X work during that time frame. Most all lenders will require site inspections, some provide this service free while other charge for an independent inspection firm. You need to get all the details from your bank first before you go any further. When you get these, make sure they are in writing and you have a contract with the bank that spells out each and every detail clearly. Watch the bank closely! Don't enter into any agreement or contract with them unless you know what you are getting into in detail. Any bank that will not provide you with a detailed listing of each and every item and its cost should be avoided. If you must provide the inspector, you need to find one now and get the costs of the service locked into a contract. If the bank is going to provide an inspector, you need to have the dates and costs of these inspections in writing in the main loan contract. I cannot stress enough how important it is to get every detail in writing from everyone, bank and vendors alike. Also, if the bank is going to be the one paying the bills, you need to have a clause in the contract with them that they are NOT to pay any vendor until you give the OK for it. Unfortunately, I have seen banks send their inspector to the job site, approve payment and the work was not done to the customer's approval. Once the vendor is paid, you will likely never have any chance to get problems fixed. If you got them for a few thousand bucks, they are more likely to fix any problems without giving you a hard time about it. One job in particular comes to mind. Concrete work was done by the masory company that was not to the customer's spec. There were many items lacking in the work that appeared on the print. The bank inspector only looked at the work done and did not consult the blue prints to ensure that it was done correctly. The contractor was paid in full and never seen again. The result was the customer became responsible for having another contractor repair the problems caused by the first one. The additional cost was beared by the customer and not by the contractor that did not do the work properly in the first place. There is no real difference between a house and a commercial property. You are the customer and should have the final say as to what's what. Just because the bank inspector feels that work was done properly, it does not mean it was done properly for you. Say the roofer's put the worng color shingles on. The bank says, "OK, the roof is on and it does not leak, let's pay the roofer's." Fine and dandy but you are going to be stuck with the wrong color roof or paying again to have the right one put on. Same goes for everything else on the job. It's your home and you're paying for it so it better be done to your specs. Unfortunately, you are going to be the one with the most headaches over this. If you have any doubts as to contracts with vendors or the bank, you may best be served to have a lawyer that is qualified in realestate and construction look over everything BEFORE you sign.
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