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What is the Payment Schedule for a New Home Construction Project?

July 24th, 2023

By Sofia Alonso

4 min read


One of the most common questions we hear from people who are interested in building a new home is in regards to the schedule of payments throughout the project. While every architect and builder may have their own way of setting up these payments, there are many similarities that you will generally see amongst most firms. 

When researching architects and builders to work with, it is important to ask not only about their overall cost, but also about the payment schedule and what it looks like. 

At AV Architects + Builders, we have developed our payment process to be as seamless and transparent as possible, ensuring that our clients are well-informed and confident throughout the journey. 

As a design-build firm all-in-one, our clients benefit from seeing all the payments in one continuous process. If you want to take away some of the mystery of paying for a new home, consider choosing a design-build firm to reduce the risk of disconnect between design and construction.

Let's dive into the typical payment terms and schedules for our projects to shed light on this crucial aspect of the home-building process.

The Design Stage of a New Home Project:

Regardless of if you are choosing a design-build firm or just a builder, your project will have some element of a design phase. 

For AV Architects + Builders, the design phase spans approximately three months. During this time, we work closely with our clients to create a concept design, develop the design to their criteria, select all materials and finishes, and create a comprehensive construction cost for the project based on all this information. 

The design stage consists of 4 phases, including permits, that add up to 10% of the total project cost. The payments during the design stage allow us to begin the project, pay for engineering and architectural services required to move forward to construction, and building/site permit fees that apply to your project. The design stage delivers all essential design elements, fine-tuned interior and exterior spaces, material selections, accurate pricing, and value engineering options for your project. We take pride in offering value engineering, providing clients with various options to achieve their desired project scope within their budget.

The permits phase is the final step of the design stage and can take around five months depending on your local county. This phase involves obtaining the necessary permits for the construction process from several departments like zoning, building, site, and health. For our firm, the permit phase amounts to 1% of the total project budget. 

The Construction Stage of a New Home Project:

The majority of the payments take place in the Construction Stage, which can last up to twelve months, starting from breaking ground on the project to occupancy and move-in. The construction stage consists of only one phase: building your new home. During the construction stage, the remaining 90% of the cost will be paid in a series of payments that are structured to reflect certain milestones of the project progress.

As you can see in the sample payment schedule below, the draw amounts are generally larger at the beginning of the project and they gradually decrease as construction progresses. This is specifically designed to allow the firm to  frontload the larger expenses, such as ordering materials with long lead times which also secures and locks in the pricing of the materials to avoid mid-construction price increases since this project is occurring over the course of a year. 




Draw #


Work Description



Phase 1: Concept Design (3%)



Phase 2: Design Development (3%)



Phase 3: Construction Budget Development (3%)



Phase 4: Permit Documents (1%)



Phase 5: Construction  Begins (90%)



Upon Approval of County Building Permit



Upon Start of Work



Upon Substantial Completion of Excavation



Upon Substantial Completion of Concrete Work



Upon Substantial Completion of Framing

DRAW #10


Upon Substantial Completion of Roofing

DRAW #11


Upon Substantial Completion of Windows

DRAW #12


Upon Substantial Completion of Exterior Veneer

DRAW #13


Upon Substantial Electrical Rough-In

DRAW #14


Upon Substantial Plumbing Rough-In

DRAW #15


Upon Substantial HVAC Rough-In

DRAW #16


Upon Substantial Completion of Drywall

DRAW #17


Upon Substantial Completion of Tile Work

DRAW #18


Upon Substantial Completion of Flooring

DRAW #19


Upon Substantial Completion of Cabinets

DRAW #20


Upon Substantial Completion of Trade Trim

DRAW #21


Upon Completion of Painting

DRAW #22


Upon Completion of Punch List

DRAW #23


Upon Receipt of Occupancy Permit



Project Budget

What are Lot Cost and Site Costs in New Home Construction?

Lot costs encompass the price of purchasing the land, while site costs involve the expenses associated with site preparation, including excavation, dirt removal, utilities, landscaping, and more. Not all lots require the same level of site work. Some examples of site costs may include clearing trees off the property, creating a driveway, excavating, and bringing utilities to the site. 

It's essential to note that the total project budget in this sample payment schedule does not include the lot costs or the site costs. 

Looking at the sample payment schedule, the total project budget in this example is $1,500,000

Let’s say the lot cost $1,000,000 - an average price in the Northern Virginia area. 

And the site work in this scenario costs $100,000.

We’re looking at a total of $2,600,000 for the entirety of the new home project.

Using this formula allows clients to budget correctly for their project and be satisfied with the results.

What are the Payment Terms of a New Home Construction Project?

Understanding the typical payment terms and schedules for a new home design-build project is essential for a successful and stress-free building journey. Look for a firm that has a clear process with a transparent payment structure so you can feel confident knowing that every step is carefully planned and executed. 

Who are AV Architects + Builders?

At AV Architects + Builders, we design and build modern homes utilizing the Master Builder approach. Our proven turnkey process is what you need for single-point accountability and minimizing all the stress of building a new home. You’ll be guided from start to finish by our team of Master Builders … from helping you find a perfect lot to handing you the keys. Consider us an all-in-one solution.

What’s more, our beautifully designed homes are constructed using the highest quality sustainable materials — making them easy to maintain. Our stress-free Master Builder process allows empty-nesters, busy professionals, and families with small children the feeling of Vacation Style Living™ all year round.



9903 Georgetown Pike Suite 201
Great Falls, VA 22066
(703) 865-5065