Re Paying The Contractor What's Normal


I structure payments about the same way as cm does. On jobs that are mostly labor (demo work) I usually take 1/2 half way through and 1/2 at end. I have had a couple clients ask to buy materials themselves to get credit card points, which I work the same as above. The only jobs I take full payment at the end are my commercial clients, who pay net thirty days, On a residential job "no pay till end of project" means no work with client. The only time I have had threaten client with a lien for non payment (full amount at end) was a minister and his wife, so much for trusting people. Bob, if the contractor does not make you feel comfortable enough to ask these questions then your intuition is telling you something
We ask for 1/2 down on jobs over $1000.00 up to $3000.00, after that we usually take 1/3 at a time. We don't work for guys like Eric in Texas or people that try to negotiate a lower estimate. No offense Eric but if you don't trust me don't hire me.
cm

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
If you want my advice don't give them a dime until the job is complete. Most contractor horror stories involve paying before the job is done, that includes partial payment. I fronted one guy $200 so he could get some front tires for his truck, he bought the cheapest ones available and he and his crew smelled of alcohol the rest of the week. I was probably lucky, at least they showed up, but some of the lines in the roof aren't as straight as they might have been. As to materials, part of the act of becoming a contractor, as opposed to a workman, is to have the resources or lines of credit to buy the materials up front.
If a contractor needs $ for truck tires stay well away from him, IMO
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
After being ripped off by a contractor on a custom built home, I would require a hold back subject to final approval of the work, with a back stop date by which the open issues have to be reworked. Ie, no full payment until what is promised is what is delivered.
On the flip side, if you as a contractor are so unsure of your work that you will not guarantee performance via hold back, then maybe you should not be in the business..

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Chris,
Good points. We never ask for the final draw until our customers are satisfied.
cm

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
????
Hold back, thats what I said - final 1/2 at completion of project ie 50% hold back. No need to direct your ire at being ripped off at me. Next time hire an attorney to review and approve the contract, I encourage my clients to do so. In regards to your back stop date: call backs lower profts on each job and negativly impact customer satisfaction thereby limiting long term growth by reducing referrals. To eliminate this situation I exceed the contract specifications and attend to other issues. For example "After I installed the new exhaust fan in your bathroom, I noticed that there were no GFIs (depending on the clients knowledge I might call them safety outlets and then explain) I installed one for you". $20 GFI + 10 minutes install time= MANY referals.
After being ripped off by a contractor on a custom built home, I would require a hold back subject to final approval of the work, with a back stop date by which the open issues have to be reworked. Ie, no full payment until what is promised is what is delivered.
On the flip side, if you as a contractor are so unsure of your work that you will not guarantee performance via hold back, then maybe you should not be in the business..

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Site Timeline

HomeOwnersHub.com is a website for homeowners and building and maintenance pros. It is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.