Well reviewed Roofing contractor 40% wants prepayment

7 Replies

A well reviewed roofing contractor wants a 40% prepayment on an 8K roof job. They have great reviews online. I dealt with a plumbing company for a plumbing retrofit once and they had a similar request, which I obliged since they had fantastic reviews all over the web. In that case they had the best price of anyone and it wasn't that much money so I went ahead and paid it since they had great reviews.

I figured I'd check on the roofing situation though, this seems pretty typical to me. 

I’m a roofer in Texas and I never “have” to have the money up front unless it’s a cash deal. Meaning I am not financing it and the customer is not using insurance. With that said, the roofer could be doing a lot of jobs and if they are a smaller company I could maybe see why they asked for it upfront. Just be sure you have a contract signed so that you have recourse should the roofer take the money and run. I doubt this will happen but I’ve heard horror stories.

Thats standard practice , good faith money , you are basically paying for materials and roof top delivery up front . If you have a contract from a licensed and insured contractor with good reviews you shouldnt have a problem .

Put the shoe on the other foot . How does the contractor know he will get paid by you ?  

The contractor knows hes going to be paid because he can do a Mechanics lean on the property.

I would only do this if I was directly paying the supplier and the supplies were delivered straight to the job site.  

Originally posted by @Scott Rogers :

The contractor knows hes going to be paid because he can do a Mechanics lean on the property.

I would only do this if I was directly paying the supplier and the supplies were delivered straight to the job site.  

 Perhaps thats good in a long term view, but it costs money and no timeline of when you'll get paid.

In the long run, we're all dead. I would get a good contract and pay the 40%.

Is pretty typical a lot of the best contractors charge up front fees because they can. 

Having said that its important to have a very clear statement of work and what is expected when to mitigate the risk to you. 

@Scott Rogers  Do you know how much time and paperwork is involved in placing a mechanics lien ? And when you win , you get a judgement , woopie now you have to collect or send the house into foreclosure . This all takes more time and money .

Contractors are much like landlords , more than you thing . Landlords make the tenant sign their lease . Contractors make the customer sign their contract .Landlords get a security deposit and first month upfront BEFORE the tenant moves in . Contractors get a deposit BEFORE work has started . 

@Jeff Richardson As far as paying for materials instead . Contractors charge to do a job , they are not materials and labor businesses . We buy from supply houses we negotiate our prices with them . You as a homeowner will pay list price for shingles . Me as a contractor that may spend $ 250,000 on materials a year  gets a much better price than you ever will . Guess what ? That difference in price is part of my profit , money in my pocket . It doesnt get passed down to the customer . Its just good business . 

Would a landlord trust a tenant to move in without paying the first month and a security deposit  only to pay for the month after they stayed there ? ( Only if they were an idiot ) .  Why would a contractor not get a deposit ?   At this point in time I am working 5 different jobs , if I didnt get a deposit I would have over $90,000 of my money out financing someone elses project without getting any return on my money . ( My funds work for me not the customer  )  Sure I have accounts at the supply house , BUT if I dont get paid by the customer I still have to pay the supplier ) . A contractor that doesnt get a deposit is basically loaning the customer money at 0 % interest . ( not too smart on the contractors end )

Landlords do background checks on tenants , a smart contractor does background checks on the customer . Yes , there are lots of people who try to screw the contractor . 

I think there is some confusion when people refer to contractors . The guys up on the roof banging nails , these guys are called "employees" or "subcontractors" . The guy in the polo shirt sitting in the clean F 350 pickup  talking on the phone scheduling jobs and supplies is the "contractor " or  "business owner " .

Where investors and homeowners have problems is when they find the employees or subcontractors and hire them to do work  thinking they will save money . Sure you can get the job done a bit cheaper , but when there is a problem , they dont respond . They dont have insurance or licenses . 

If you are hiring a contractor that is a legal business , licensed and insured , read his contract . You have very little chance they will run off with your money .