Hi Sage. This really depends on the size and scope of your project. At Green Star Window Systems in Sun City, AZ we require 10% down after a contract is signed. Make sure you receive and carefully review a contract to protect yourself. In our contract we include a 3 day recession time frame. This is in case the customer changes their mind before we order products. Requiring 10% allows customers to not have a lot of money up front and insures they are completely happy with the products and work performed before paying the remaining 90%. It has worked well for us. FYI, our jobs are typically in the $3,000 - $15,000 price range. I would be very cautious of companies requiring a lot of money up front.
Some states have very specific laws regulating how much a contractor can collect for a deposit. In California for example a contractor can charge a deposit of no more than $1000 or 10 percent of the contract price for home improvement projects.
A common payment schedule is 10/30/30/30. 10% deposit, 30% at project start, 30% at rough inspection or equivalent milestone, and 30% at job completion
50% deposits are inherently riskier, but not unheard of. The higher the deposit the more due diligence a homeowner should perform. Call former clients and other contractors they have worked with and ask them direct questions regarding the contractors job performance. Hire away if the contractor passes all these tests!
We are general contractors based our of NYC. Depending on the size of the job, we usually ask for 5% at signing , 10% at the start of the job and tie all other payments to the progress of the project. So if we want to collect another 20%, we have to make sure our walls and rough-in is done. and all progress payment schedule are written in our contract documents. This is usually for project in the $50000-$500000.
For smaller projects, like a bathroom or kitchen remodel in the $18000-$50000, we usually do 5% at signing, 10% at start of project, 25 at rough-ins/25 walls/25 tiling or painting/10 at completion
At Wells Painting LLC we generally don’t require a down payment if below $10,000.00 We write upon completion full payment due. This takes a bit of the worry out of folks and helps stand out from the next guy. Make sure to get a contract and call all their references!
In Maryland, the Maryland Home Improvement Commission, that all Contractors must be licensed under will only allow one third of the signed contract amount to be used as deposit.
Depends on work load and agreement made with your contractor. Personally I require 5% when initial contract is signed commitment fee, and another 25% on the start date. And of course final payment upon completion.
First off, this is a great question to ask! Secondly, all of contractors that answered are absolutely correct - each and every answer.
Every company goes about leveraging the costs of projects differently. From a consumer perspective, I would look for a sliding scale. For instance, if the project is a $30,000 kitchen remodel, expect to give a 25% down payment to initiate the contract. However, kitchen remodels can move very fast depending how prepared you are prior to the start of the construction process; so, for this example, I would expect to have all $30,000 ready for release of payment within 2-3 weeks from beginning to end.
Also, down payments are good for the consumer and the contractor. For instance, a down payment of $7,500 from the example above will be applied to labor costs because the GC will have a demo crew, dumpster, permit and rough material to purchase and leverage with the $7,500 down payment. But, it is not always about down payments; it is more about financial flexibility.
It is important to have financial flexibility during a project. If you would like to expedite the project, then you should partner with the GC to purchase material in advance. This money can be included in the contract and removed as purchased, or you can exclude it from the contract and purchase material independently. Either way, it is important as a consumer to understand that having finances prepared prior to entering the project makes the project that much easier to navigate and manage and expedite for both the consumer and the GC.
Hi Sage. Here in PA the law states that no more than 1/3 of the total job is allowed to be collected before any part of the job is started. Look into your local laws on this.
Hello,
We are Concrete Contractors out of Pennsylvania. Some jobs we require 1/2 at the start of the job, and the other half at the finish… And then there have been a few that we specified 1/3 at start, 1/3 during , and 1/3 at finish. We verbally agree about the payment method and timeline, and then we write it into the contract and have it all signed and approved before the first payment is accepted. I hope that helped answer your question
It really depends on what type of project and where the project is. In Los Angeles for example the deposit is 10% of the contract or $1,000.00 whatever is less.
That will first depend on the state laws regulating contractors. We’re in California and by law a consumer should not pay more than $1,000.00 or 10% of the total cost of the project, whichever is less. Depending on the type of contract you have agreed on with your contractor, your progress payments should follow performance paying the contractor after the work has been completed. If this requires paying for the purchase of materials you would pay the contractor upon delivery of materials. If the contractor needs money to pay for materials your contract should state you as the homeowner will be purchasing materials at which point you can go with your contractor to the supply store where such materials are to be purchased. We are licensed to provide our clients with peace of mind not to be able to charge more than $500 upfront (as a handyman might be able to do on one specific project) and the laws are set to protect our clients and keep us as contractors in line with the well being of the consumer and to have a certain amount of protection should a homeowner decide not pay upon performance.
The primary question is on down payment prior to starting the job, but also don’t forget about the percentage of final payment.
