I would like to explore Phase Inspections as an avenue and I need some wise counsel from someone who is currently doing them. I am coming from 20 years experience in construction & Project Management. I understand what substantial completion of each phase looks like and am well versed in reading and making Gantt charts.
I only encountered a Phase Inspection once for a historic renovation in a building near Cleveland OH. The lender sent a collage student with a draw check to meet me. She looked like a deer in headlights, about 10 steps in she jumped from the sound of a power tool and made a B line for the door, handed me the check and promptly left. It was obvious she did not have any training or experience. So that leaves me with a lot of questions, here are a few I am hopeful you guys can answer.
Who (at large) is paying professionals to do these?
How do you structure pricing for these types of inspections?
With the constant change of project schedules is it a challenge to get in at the right time?
Are Contractors or PM’s cooperative? Do they even communicate with you?
How do you define the scope / accountability for these inspections.?
For example: Are you inspecting for conformance with the plans or looking for defects as well as
verifying substantial completion of the phase?
Any advice or direction would be greatly appreciated.
I think that you are conflating two distinctly different types of inspections (i.e., draw inspections vs phase inspections), both of which can be performed by home inspectors…
Draw inspections are done on behalf of the lender to ensure that the project progress and material acquisition is at the stage indicated on the project plan and represented by the builder, before the lender releases funds for the next draw. Your client is the lender for these inspections and they are progress vs. quality oriented and are typically spreadsheet based. Builders are cooperative, because it’s the gateway to their funds availability (unless you determine that they are misrepresenting their state of progress). Your example was most surely a draw inspection.
Phase inspections are technical in nature and QC oriented. The buyer is typically your client. You don’t really care about budget, progress or material purchase so long as the house is in the proper state to perform that phase inspection. They may vary a bit by region. Here is how I defined them https://homecert.com/new-construction-inspection-services/. Timing can be challenging as many don’t plan and schedule well and leave short windows for the inspection. I keep the client between me and the builder for all scheduling. I’m happy to review my findings with the builder, but only if asked to do so by the client (my report goes only to the client). I excluded plan reviews from my inspections, but you could include them if you want and are qualified. The home inspector is a consultant to the client. The home inspector does not force the builder to do anything. We inform the client and provide supporting details for our opinions. Negotiation corrections with the builder is up to the client. We provide supporting details for our findings. Response and cooperation from builder varies greatly depending on the type of company and house being built. Many times builders respond positively to a well documented report and findings. The builder, after all, paid his contractors to do their jobs right. A good phase inspection can save the builder a lot of headaches down the road as early identification of problems facilitates early correction. These same problems become much more expensive to correct as the project progresses.
Where I was working, real QC was all but non-existent in new construction (the focus was on the GANTT chart not the workmanship), so there was a great deal of opportunity to sell phase inspections.
Chuck I can’t thank you enough for this thorough response!! It is so encouraging to learn of these broader areas of work for Home Inspectors. If you don’t mind my asking how did you begin in these types of inspections?
For Phase inspections, I was fortunate enough to learn under a mentor and refine my process and skills over 15 years.
For Draw inspections, I was contacted by a local bank that had a process and system in place. I was able to build a non-lender specific process and spreadsheet from there. Draw inspections were never a large part of what I did, but if they are close to you, they’re pretty quick and easy. Got into some for $10M class houses with non-traditional lenders. I was able to put those programs together for them and charge a much more substantial fee and these projects lasted years.
Arthur,
Here are a few issues with residential phase inspections you need to know or think about regardless of your construction experience:
Golden Rule - In my experience contractors are motivated by two things; Making money or Losing money.
Typical Issues - If your client signed a contract the contractor provided it’s highly likely your client has a contract that basically states the contractor agrees to build them a house and the buyer agrees to pay full price when done or the contractor will place a lien on the house.
There is no reference to code compliance, no provisions to allow a third party inspector on the job site. Some contracts even prohibit the buyer from being on-site during working hours.
There are no Architect/Engineer sealed plans to work from. Typically the homeowner or contractor just cut out a picture from the plan books you find on a magazine rack.
No standard specifications were provided or incorporated into the contract. The standard specifications typically spell out quality control issues like how flat the concrete slab will be, what strength of concrete will be used, the grade of lumber to be used, etc.
Contractor is not required to coordinate with you or even talk with you, especially if you can’t control his payment, see Golden Rule above.
Don’t forget to check with your E&O insurance company to see if they cover phase inspections.
In my area, some agents work with contractors to sell their houses so I try to educate them to have any potential buyers contact me before signing any contract. If they already signed the contractor provided contract I will ask to see it first but in most cases, the contract is so one-sided it would be a waste of their money and my time to do a phase inspection.
