📨 Contractor’s Digest – Daily Rundown
📅 Wednesday, April 23, 2025
🛠 Helping Contractors Win More Jobs, Increase Profits & Avoid Costly Mistakes
🚧 Today’s Rundown
🔹 Feature Story: How to Use Escrow Accounts with Cash Buyers (and Protect Everyone)
🔹 Business Tip: Keep Track of Changes or Kiss Your Profit Goodbye
🔹 Tool Spotlight: Change Order & Documentation Tools That Save Your Bacon
🏗️ Feature Story: How to Use Escrow Accounts with Cash Buyers (and Protect Everyone)
💰 Working with a cash buyer sounds like a dream—until it becomes a nightmare.
No lender means no bank holding funds. And that can get risky fast if expectations shift, payments stall, or disputes arise mid-project.
That’s why escrow is your best friend on any substantial cash job.
🔒 What’s an Escrow Account?
It’s a third-party account (usually held by a title company, real estate attorney, or escrow service) that securely holds the buyer’s funds and releases them according to the agreed-upon construction schedule or milestones.
✅ Why Use Escrow on Cash Projects?
✔️ Reduces Payment Delays
Funds are already there—just waiting for deliverables to be met.
✔️ Increases Trust on Both Sides
Clients know you’re not walking off with their deposit, and you know you’re not waiting on a “check in the mail.”
✔️ Protects Against Disputes
Clear terms = fewer misunderstandings. And if things go south, you’ve got documentation.
✔️ Keeps You Off the Hook Financially
You don’t front materials or labor without guaranteed access to money.
💡 How to Offer Escrow as a Solution:
“Because we’re not going through a lender, we recommend using a neutral escrow account. It protects both of us and ensures we stay on track with clear deliverables.”
🔧 Escrow is a great tool to keep jobs moving and keep your margins protected—especially when the “bank” is just someone’s personal checking account.
📩 Want a sample escrow agreement template you can use with your next cash buyer? Reply and we’ll send it over.
📌 Business Tip: Keep Track of Changes or Kiss Your Profit Goodbye
Scope creep isn’t always intentional—but if you’re not documenting every change, you’re eating those costs.
A little change here, a tweak there, a quick “favor”...
Next thing you know, your timeline’s wrecked, your subs are confused, and your profit margin just vanished.
😬 Common Change Order Mistakes:
❌ Verbal agreements only
❌ No time impact or material adjustment listed
❌ Waiting until the end of the job to settle up
❌ Letting “small” changes pile up untracked
✅ Fix It with a Real Change Order Process:
🔹 Have a Template Ready to Go
Keep a simple, fill-in-the-blank form on your phone or iPad.
Include:
• Description of the change
• Cost impact
• Time impact
• Client signature
🔹 Don’t Do the Work Until It’s Signed
Even if it’s just a quick text confirmation—never start the work without written approval.
🔹 Train Your Team to Flag Changes
Foremen and crew leads should be alert to anything that deviates from the original scope and escalate it ASAP.
🔹 Review All Changes Weekly
Catch issues early. Bill for changes promptly. Keep everything above board and out in the open.
🚀 Pro Tip:
Scope creep kills profit—but process prevents problems. Clear change order policies = happy clients and clean books.
📩 Want our “Quick-Use Change Order Template”? Reply and we’ll send it your way.
⚙️ Tool Spotlight: Change Order & Client Communication Tools
📱 Top Picks:
🔹 JobTread – Great for logging change orders, client sign-offs, and pricing updates
🔹 CoConstruct – Real-time communication with clients + scope tracking
🔹 DocuSign + PDF Template – Simple way to send and sign from the field
📦 Want our full “Change Order Tool Stack” breakdown? Reply and we’ll send it your way.
📣 Call to Action
🔥 Forward this to a builder who always forgets to charge for “just one more thing.”
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👷♂️ Stay smart, lock the scope,
— Benjamin Patton