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Deposits, draws and change orders: how a custom home is paid for
How payments are structured on a custom home or major renovation contract: deposit, stage draws, change orders, lien waivers and the final balance.
A custom home or whole-home renovation is paid for in pieces as the work is completed. The schedule protects both sides: the builder is funded for materials and crews, and the owner pays for work that exists. Here is the structure RBS Termonde LLC and our other building companies use.
Fixed price or cost-plus
A fixed-price contract states one number from a complete plan set and specification. A cost-plus contract bills actual costs plus an agreed fee and suits projects where the design is still moving. Either way, the contract spells out the payment schedule, the estimated timeline and what is excluded (for example site work, landscaping or appliances).
The typical schedule
- Deposit at contract to secure the start date and fund permits, engineering and early materials.
- Draws at defined stages, for example: foundation complete; framing and roof dried in; mechanical rough-ins and insulation; drywall and exterior finish; cabinets, trim and flooring.
- Balance at substantial completion, when the home is usable for its intended purpose, with a punch list and a small holdback released when it is done.
Each draw is invoiced against a stage sign-off with photos; lenders often require an inspection before releasing construction-loan draws, and we schedule around that.
Change orders
Anything that changes scope or price after signing is priced in writing and approved by the owner before the work is done. Change orders are billed with the next draw. This is the single biggest source of disputes on residential projects; a written change order avoids almost all of them.
Lien waivers and paperwork
With each draw you receive a lien waiver for the amount paid, and on request the waivers from major subcontractors and suppliers. Keep them with your closing documents.
Paying
Draws are invoiced by the building company (for example RBS Termonde LLC) with a secure link to pay by bank transfer, ACH or card. Terms, late-payment interest and the cancellation policy are on the billing page and in the contract. Planning a build? Start the conversation.
Published 2026-08-22 by RBS Build Works, an operating group of Radd Payment Solutions. More insights