The best way to save money when building a house is to make a clear savings plan and stick to it. The right time to put together such a plan is parallel to designing a house, and the right time to start working on implementing savings is right after! This is important to remember because if you do not start dealing with this in time, you will not be able to apply many of the possibilities that we will present to you.
The goal we need to set ourselves is to achieve as much money savings as possible by investing our own effort and time but not compromising quality.
Although it is far simpler and easier to contract the construction of a house with one contractor and oblige him to deal with the procurement of materials, this is also a far more expensive option. The first step in compiling a savings plan is to separate material procurement processes and contractor engagement. Then follow the guide we bring you below, consistently!
We published another article about making the savings when hiring a subcontractors. Read the article here:
How to save money when hiring a contractor?
The definitive, step-by-step, guide to saving when buying building materials
We have to mention some important things at the very beginning. First, this guide, certainly, presumes the use of general negotiation techniques, which we will list in the appendix at the end of the text. And secondly, this is not about using any tricks or gimmicks (not to mention scams), but about regularly applied arrangements that bring benefits to both stakeholders, the buyer, and the seller. Yes, that’s right, by giving you a discount or some other benefit the seller makes a profit too, otherwise, there would be no deal.
The 12 steps that follow are not listed in order of priority, or any other order, and do not exclude each other! So, you can be creative and combine them for one and the same item.
1. Calculate the exact quantities
Each construction site is full of various materials after the completion of construction. All that material is paid for and it is a pure loss.
Of course, it is impossible to buy the exact amount needed, but remember one thing: contractors calculate 20 to 30 percent more material than is needed, especially when it comes to basic works, because the only thing that matters to them is to finish the works, as soon as possible, and the delay, due to the delivery of an additional amount of material, is a pure waste of money for them.
So, it is much smarter to entrust the preparation of the specification of materials for building a house to an architect or designer and to demand that it be as precise and detailed as possible. All those little things that often slip out of sight during the calculation can ultimately significantly affect the price in a negative way, but if we calculate them in time, they can also become part of the discount arrangement.
2. Make suppliers compete with each other
Of course, one of the basic things we do with every purchase is touring sellers and comparing prices. But when building a house, we will spend huge amounts of money on the purchase of materials, so we should not stop on this. After you determine where you can buy the cheapest by initial search (it is easiest to do it online), go to a few more vendors and bring them the best deal you’ve found.
Then ask them to give you a better deal! It is clear, you guessed it, then you will take that new, more favorable offer to the first vendor and repeat this process until you squeeze out the last dollar of the discount.
Believe me, as someone who has many years of experience in building houses, I insist that there is no more effective way to reduce the cost of materials!
3. Provide free transportation
The cost of transporting materials to the construction site can significantly increase the total cost of procurement of materials if paid in full. There are two ways to eliminate these costs almost completely.
The first is obvious, ask the supplier to provide free transportation as a form of discount. But there is another option, if, for some reason, the supplier is not able to provide free transportation or has already given you some other type of discount.
We usually buy from retailers and not from the manufacturer itself, so they also need to transport materials to their location. In that case, you ask the hauler, who delivers the goods to the retailer, to stop by your construction site first, and unload the material you bought, and then move on.
4. Pay in advance to get a rebate
Offer the advance payment at the beginning of the design process, i.e. months before the start of construction, to the supplier from whom you decide to buy, in the approximate amount of the total purchase.
One of the basic challenges that every business faces is liquidity. Sometimes very profitable firms that are even solvent need to take expensive loans to have enough cash on a daily basis. This is your chance for a fantastic discount!
From experience, I claim that many suppliers in this case will offer material in an amount almost equal to their purchase price. Even without a margin on your goods, it pays them off to sell to you, because that sale is, in fact, an interest-free liquidity loan for them.
5. Negotiate an alternative payment
It should never be forgotten that suppliers also need all kinds of services and goods. Maybe you can provide some of that or you know someone (friend, relative, neighbor …) who can do it, and he owes you a favor … ??? In any case, it is worth trying to make such a non-monetary arrangement and save over the much-needed cash.
6. Buy all in one place
The rule that always and everywhere applies is: bigger bill – bigger the discount! So make sure to associate those items that are small amounts in your specification with the purchase of those items that are larger amounts. Also, if you know someone who is doing some construction work at the same time as you and needs the material, offer to join the purchase.
7. Create a suppliers database
Nowadays it is completely unquestionable that IT speeds up, facilitates, and makes every business more successful. It is not necessary to buy expensive software, it is enough to make a quality and as a comprehensive table as possible in a free Google sheet document. You will enter information in the document about who in your area offers what, at what initial prices, how many discounts it offers, whether it is ready for some other concessions, and so on…
References should also be obtained from each individual supplier. Create this database as soon as possible and fill it in as much detail as possible!
8. Buy out of season
Construction is a seasonal job, therefore the procurement of materials also. At the beginning of winter, the works slow down, the sales of materials fall, and just then the final financial reports are being prepared. It is for this reason that discounts are generous this part of the year and should be used!
Don’t worry about the lack of storage space on your construction site, as it is often easy to leave the material at the dealer until you need it.
9. Pay in cash, not by card
As with any other purchase, when you enter into price reduction negotiations with cash in hand, the probability that an agreement will be reached increases drastically.
10. Consult an architect when choosing materials
We have already pointed out that you need an architect to make a specification of the material. However, there is another important task for which you need him, concerning the procurement of materials – choosing the optimal! Not the best, but the optimal!!!
Modern architecture abounds in a whole spectrum of different materials that can be used for the same purpose. Their constructive characteristics are usually very similar, and the difference arises in aesthetics. A good architect is familiar with the entire market offer and can suggest an alternative material that will be more affordable and still aesthetically pleasing to you.
* Read our previous article about “What else the architect should provide as a service” here:
11. Buy a used materials sometimes
I know this sounds like a desperate measure, but it’s not. Stay with me! For some works the material has only a constructive role. Just because it’s been used and doesn’t look great doesn’t mean it will do the job worse. You will save and it is more environmentally friendly. In some cases it is the used material that contributes to the aesthetics and warmth of the home. Take for example brick or wooden beams or floor…
12. Buy a defective materials, too
When we talk about the purchase of damaged material, it is important that it be constructively correct and aesthetically controversial. not the other way around. In this case the reverse logic is valid from that set out in the first step. You should buy more than you need, set aside and throw away unusable, and the savings are made on a huge difference in price compared to the regular.
*You may also be interested to know how to save many when building house foundations. We wrote about it here:
* BONUS: General rules of negotiation
- clarify everything that is not clear to you
- create win-win outcomes
- define the minimum level of acceptability
- aim high and have an optimistic approach
- develop realistic alternatives
- know when to give up
- be fair
- keep in mind the goals of the other party and meet them