50% Up Front

6 Replies

Got a bid and the contract said 50% up front.

I've got a nice place in a nice part of town, you've got...a truck, and I'm the one not trusted.

That's funny.

yeah, just heard the same from an electrician.  I like how they go to a truck write down 3 or 4 things you said and present a contract.  I typed up a statement of work and percentages I would pay at each stage. He accepted.

Not a chance would I put down 50% on a project with a new contractor.  The biggest risk for contractor is most likely the cost of materials.  You could always offer to pay for the materials yourself so that way its only labor you are paying to the contractor.  I would try to scope out 1 week deliverables and payment at the end of each week.  This way neither party can get too far behind.

Some states (CA for one) limits contractors to only take 10% or $1000 for deposit, whichever less. 

I usually ask for the minimum of $1000 at acceptance of contracts, then another payment at demolition (which is the first day of work), say $4000 or $9000 :) to make it "even".  My clients never had any problem with that.  Some of them even write me the first check for the combination of the 1st 2 payments. 

As far as estimate goes, for smaller job, I know small (most likely single operator) specialized contractors usually just do it either on a piece of paper, or carbon-copy setup - all hand written.  If the job is small enough like electrical upgrade, copper pipe change-out, changing windows, etc..., going out the truck to get his numbers straight for a quick 10-15 minutes is typical.  But they should at least have some forms of pre-format contracts to begin with.  :)  Well, that's why they still a single operator.

I agree 50% is way out of line, period.  They're either scams, or just looked up on one of those "how to's".  EHow lists it at 10%-50%:

http://www.ehow.com/info_8740066_much-deposit-should-give-contractor.html hahaha.

My opinion is you should only pay for things done in mile-stone.  I usually structure my contracts for clients like this:

  • - 10% deposit (or $1000 whichever lower) - due at date of acceptance
  • - 10% at first day of work for demolition and framing materials
  • - X% due at completion of 2 bathrooms rough
  • - Y% due at completion of kitchen rough frame, electrical, & plumbing
  • - Z% due at completion of flooring,
  • - ..... so on and so forth.
  • - balance due at completion of punch list. (usually $5000-$10000, depends on total project cost).

@Arnie Guida  

I agree 50% down sounds steep; perhaps that is for materials?!

But the fact that one has a "nice place in a nice part of town" doesn't make one trustworthy. The few times I've had trouble collecting payment from customers, they were all "nice places in nice parts of town"

And the opposite is true too: just because a man only has a truck (though he may have more than you know) doesn't make him untrustworthy. 

No materials (paint) included.

It was to paint my personal residence, and he's done work for me before. I was at the job and paid him upon completion that day, even gave him a tip because of the good work. 

If this was his first job for me, I can understand asking for some money up front, but ask all you want, I will no longer give money up front.

I was insulted by the request for 50%.

My other contractors who have been with me for YEARS never ask for a penny up front.

No more money up front!

Can I get an AMEN from the choir?!

As a contractor in South Florida, we structure our rehab and remodel contracts so the client never feels like we are getting ahead of them. This eases the relationship a great deal and helps instill a certain amount of trust.

Here we are forced to use a lot of subs and find that if the subcontractor is honest they understand, if not they argue for about 20 minutes or until we ask them to leave; whichever happens first.

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