Working with Kiavi

Brokers: Submitting a Scope of Work (SOW) in Kiavi's Platform

A Scope of Work (SOW) outlines all planned construction and renovations for a real estate project and is crucial for processing your client’s bridge loan application at Kiavi.  A precise and comprehensive SOW facilitates fast loan origination and a smooth Draw Process. This overview will help you assist your clients in preparing a professional SOW using Kiavi’s online portal, detailing the essential requirements and steps involved.

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Submitting a detailed SOW

After your client's loan application is complete, the next step is to submit their Scope of Work (SOW) using the integrated template in Kiavi’s online platform.

This tool can be found on the borrower dashboard under the Rehab Information tab, which is divided into three key sections:

  • Project Management
  • Project Summary
  • Scope of Work Details

This is where all necessary details about the project are entered, streamlining the process for loan consideration and approval.

Project summary

The Project Summary section of the SOW prompts the user to detail the current state of the property. This summary must outline all intended renovations, additions, or modifications, like increases in square footage or changes to the floor plan, including bedroom and bathroom additions. It's vital to ensure that all updates mentioned in the Project Summary are also clearly itemized in the Scope of Work Details to maintain consistency and clarity in the loan documentation process.

 

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Submitting cost estimates

Your clients must include detailed cost estimates in their Scope of Work, specifying the quality level of finishes (low, mid, or high-range) for the project. They should match their material choices to these quality levels, ensuring that their selections align with the overall budget and investment strategy.  Here are some examples of the types of materials for different types of construction projects which would be considered low, mid, and high range:

 

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Do's and don'ts of completing your SOW budget

When working through your client's SOW budget for Kiavi, it's crucial to ensure that their submissions meet all requirements. Here are some simplified do's and don'ts:

Ensure all division budgets adequately cover standard labor and material costs.

Budget revisions will be requested if either of these components is missing.

Note: Make sure that materials already purchased or “free” labor from the client, friends, or family aren’t included in this budget.

Duplicate item listings across different budget divisions.

For example, the SOW includes an Appliances division so kitchen appliances would be listed there rather than the Kitchen division—never in both.

Do pick specific selections from the dashboard that accurately reflect the work being done.

In the dashboard, a drop-down menu under each budget division contains a variety of pre-set descriptions. Select the description that aligns closely with the intended work. If the available descriptions don't perfectly match the project’s specifics, additional details must be provided in the Project Summary to ensure clarity about the planned work.

Don't include staging or miscellaneous expenses.

Kiavi does not cover costs related to staging or any miscellaneous expenses that do not contribute permanent value to the property. If the task is unclear or does not add permanent value to the structure, we cannot reimburse for it. Additionally, any fees incurred from a general contractor need to be distributed evenly across all relevant budget divisions.

Scope of work review process

Once the Scope of Work is complete, Kiavi analysts will conduct a review, checking to verify:

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What does it mean if the project is deemed ‘extensive’ during the review?

After submission, Kiavi analysts will review the SOW for completeness and accuracy, including an assessment of whether the project is considered 'extensive.' Projects may be deemed extensive if they involve:

  • Adding square footage
  • Performing significant structural foundation work
  • High renovation cost as compared to the purchase price

For extensive projects, Standard level borrowers will need a Licensed General Contractor, verified by a Feasibility Analyst, to manage the project.

Learn More

Visit our blog, "The Ins and Outs of Your Scope of Work," for even more details about the importance of creating a detailed SOW, its benefits to your client's projects, and its implications for financing. For any additional information regarding submitting an SOW with Kiavi, contact your Kiavi Broker Experience Manager.

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