Most contractors want to get paid when
the job is done. That’s human nature. But it may not be the best way to do business.
Ask any car dealer what would happen if every buyer had to pay cash on delivery.
Sales would tank. Credit can create sales opportunities you didn’t know existed.
Some of the most successful builders
offer a credit term -- monthly payments after the job is done. If you’re in a position
to defer part of the income from completed jobs, consider making credit part of
your sales pitch.
It's perfectly legal to take an IOU for
part of the job or stretch out payments after work is done. But a construction contract
with a deferred payment term has to include disclosures required by the Federal
Truth in Lending Act (T-I-L). Banks, car dealers and finance companies are good
at writing agreements with all the required disclosures. It’s at the heart of their
business. But any construction contractor can do the same thing. And Construction
Contract Writer makes it easy.
This is one area where home repair and
improvement specialists have an advantage over custom home builders. I don’t know
any new home builder that offers to finance what they build. But it’s a natural
for repair and remodeling contractors to offer extended payment terms, especially
when that helps close the deal.
All the Details
The Financing Calculator in Construction Contract Writer does all the T-I-L math. Enter into the calculator what you
know: the bid price, the down payment, other charges and credits, the proposed interest rate, the number of payments.
Those are easy. CCW's financing calculator does the heavy lifting -- figuring the
amount financed, the finance charge, the APR, monthly payments, etc. -- and inserts those numbers
into your construction contract. All disclosures required by T-I-L are automatic.
Even if you don’t plan to offer credit
on a job, T-I-L disclosures have to be in the construction contract any time you
recommend a lender – even if the lender makes all T-I-L disclosures in the loan
docs. If you’re in the habit of recommending a lender to clients, the finance calculator
in Construction Contract Writer should be part of your tool kit. Fail to make the
required disclosures and you’re liable for both the overcharges and your client’s
attorney fees. You don’t need that.
One other point: CCW doesn’t write the
loan docs. You’ll still need the IOU. But all T-I-L disclosures and payment terms
are laid out precisely in the construction contract. Just copy and paste from your CCW contract to the loan papers.
The trial version of Construction Contract
Writer is free. If you can use CCW to close more deals, the full working version is $119.
