The Devil Is In The Details!

Reminder, this article is a part of our ongoing Saturday Construction Series. The articles are a bit longer than during the week.

How to Conduct a Punch List Inspection: The Final Step in Your Rehab Project

A punch list inspection is an essential part of any rehab project, acting as your last chance to catch any remaining issues before closing. When it’s time to do your inspection, you want to ensure that everything—from the foundation to the light fixtures—is in order. Here’s how you can effectively conduct your punch list inspection to ensure your rehab is finished to perfection.

1. Begin with a Thorough Walkthrough

Start by walking through the property, from top to bottom. Focus on everything, including the roof, windows, flooring, plumbing, electrical work, and all of the smaller details like trim and paint. It’s essential to inspect the property as a whole and avoid missing any items that could become major issues down the road.

2. Be Specific with Your Punch List

As you go, create a detailed list of everything that needs to be fixed. For example, instead of writing “fix paint,” specify “touch up chipped paint near the kitchen sink.” This way, there’s no ambiguity, and your contractor will know exactly what’s required.

3. Hold Contractors Accountable

One of the biggest pitfalls in rehab projects is not holding contractors accountable for finishing all aspects of the job. Be sure to communicate your expectations clearly to the contractor, and don’t release the final payment until all issues on the punch list are addressed. This step is essential in ensuring your rehab meets the quality standards you expect.

4. Pro Tip: Withhold Payment Until Repairs Are Made

Here’s a tip from my years of experience flipping houses: calculate the cost of repairs from your punch list and withhold twice that amount from the final payment until those repairs are completed. This policy should be communicated upfront and included in your construction agreement. Contractors may be eager to move on, so if they’re dragging their feet, offer to finish the job with a handyman. This not only ensures the work gets done but can often bring in a fresh set of eyes to catch anything you may have missed.

5. Final Walkthrough and Sign Off

Once the repairs are completed, do a final walkthrough with your contractor to ensure everything on your punch list has been fixed. If the work meets your satisfaction, sign off on the project. It’s essential to not rush this process—your investment is at stake.

Conclusion: Protect Your Investment

A punch list inspection may seem like a simple step, but it’s critical for the success of your rehab project. It’s your final opportunity to ensure everything is in perfect condition before selling the property. By being thorough, specific, and holding contractors accountable, you’ll set yourself up for a successful flip.

Pro Tip Recap: Withhold twice the estimated cost of repairs until everything on your punch list is addressed. Offer to finish the job with a handyman if needed, and let them complete the repairs. This ensures the job gets done and allows for a fresh perspective.