Purchase Orders for Homebuilders – Estes Builders

July 7, 2014

hillside 1Many home builders don’t take advantage of purchase orders, and we think that’s a big mistake. A purchase order, in general terms, is a written official offer from a buyer to a seller, which indicates the types, quantities, and agreed upon prices for products and services. In terms of home construction, a purchase order formalizes and solidifies the prices to be paid to material providers and subcontractors. The benefits of this type of arrangement are pretty straightforward. By solidifying prices, a home builder can give you a more precise cost estimate for your project. Purchase orders are one of the main reasons why Estes Builders is able to provide our customers with fixed-price agreements. Purchase orders also contribute significantly to a builder’s ability to finish a project on time. Costs are agreed upon from the start, so there’s less bickering and negotiating in the field.

If purchase orders are so great, then why don’t all builders use them?

One of the primary requirements for using purchase orders is organization. A builder must be well-organized to formalize a purchase order with his material providers and subcontractors. That means all plans and specification must be detailed and complete before construction commences. So whether or not a builder uses purchase orders is actually a decent indicator of their level of organization. In general, the more organized the builder is, the more effectively your budget and timeframe will be handled. Not sure if the builders you’re considering use purchase orders? Just ask. If they say no, ask them to explain why. They may have a good answer, or they may not. Either way, it’s better to know before making a commitment. [action] Create-a-custom-home-budget Estes Builders is an award-winning design build firm that specializes in custom homes in Western Washington. We have earned more than 130 customer testimonials and a reputation as Western Washington’s most trusted custom home builder. We build custom homes in Sequim, Port Angeles, Port Townsend, Port Ludlow, Bainbridge Island, Kingston, Silverdale, Port Orchard and surrounding areas. Contact us for a FREE Project Analysis to discuss your project.]]>