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Tentative Material OrderWhen your offer to purchase has been accepted, and you are fairly sure your mortgage application has been approved, it is time to place orders for future delivery of needed material with the suppliers you plan to use. These tentative orders are not to be executed until the proper time in the timeline. Yet setting a future delivery date will help insure that the supplier will have what you need when you need it.On one house I built, I paid for all materials as I ordered them. I never did get bills coming to the house where I lived. This is a good feeling. I suggest this technique to anyone who will listen.If you do not have the money available, it is better to find the money before purchasing the materials. You can not get behind if you have not accepted delivery on unpaid items. I speak from experience. Once I bought materials with a line of credit from a lumber yard. That was so easy, I ordered more than I needed. And when it came time to pay,. I often did not have enough to pay the full invoice. So there were carrying charges. Not good.If you pay as you go, paying for all materials before they are delivered to the job site, you will avoid overcharges because the invoice will be itemized while you are standing there ready to pay. If something looks too expensive, it is a lot easier just to not buy it than to try to return it after it has been delivered. Further, if your cash supply is short, this will be a way to remind you of the budget. So what if you order 150 2x4's rather than the 160 you thought you needed. You can always go back to get the other ten if you really need them. Chances are you will need twenty, anyway. And when you go back, you may have a fresh supply of cash to use.Pay for all materials when they are ordered. Certainly pay at the latest when they are delivered to the job site. Set up any account as cash on delivery. That way you will not get into trouble. Well, you will be less likely to get into trouble.
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Prepared 2006-2010 David Ullian Larson |