I have been renovating my home this last year and have acted as my own contractor. I buy the materials and have hired a "bonded" and "insured" workman for a specified rate. We have both been very pleased with this arrangement. I pay on a daily basis and should I become unhappy with his performance I can end the arrangement. He on the other hand has no material costs up front.
It takes some time to supervise this activity but s> Hello:
In my state by law a contractor may ask for up to 1/3 of the contracted price in advance. Perhaps you have similar laws or regulations in your area. Licensed contractor are required to be bonded for different amounts depending on what their license is for.
I work for a contractor supply company. The majority of our business is on credit to contractors. (more than 70%). We also have retail locations and a truss manufacturing facility that fill the majority of the remaining 30% of our revenue.
Contractors are able to get credit to do projects if they're reputable. Their suppliers also rather that they "run a tab" for all materials on a project so we can send them a bill for that project at the end.
You're missing the point. The supplier credit is there for the benefit of the contractor. It's up to the contractor to decide how the financial dealings between themselves and the owner are arranged. If a contractor has stuff out on credit he's exposed. That exposure needs to be covered - the sooner, the better. That's good business.
R
The best experiences I've had with contractors have have entailed not much more than a detailed conversation, firm agreement on a price (in writing or not), a handshake and full payment made in cash when the job is finished. These have all been under $7000. This included the new windows I had done 5 years ago. There was a written contract in that case, but I payed nothing until the job was 100% complete. I've had nothing but grief from the large outfits with big display ads, guys in uniforms and tons of paperwork with detailed payment schemes. Over the summer I hired a contractor for a job closer to 10,000 and he wanted half up front and the rest at completion. I was a bit nervous about the front until the trucks and dozers and obviously hard working crew showed up when they said they would. It all worked out good in the end. He had come highly recommended but beyond that you have to go with your gut as well and extend a bit of trust.
My understanding is that progress payments are very common for construction work, and less common for repair and maintenance work, but still not unheard of. If you own an apartment building, for example, and hire a plumber to do work that will take a couple of weeks or more, you should expect to make progress payments, as the plumber has weekly payrolls to make and probably does not have the liquid assets to make those payments without some income.
It seems a lot of people posting here suggest acting as your own general contractor, but I suspect they haven't given this a lot of thought. When you act as a general contractor, you have to be very very careful that your subs and the labor you hire cannot be considered your employees, or if they can be considered employees, that you have covered insurance and taxes. If, for example, you just buy some windows and bring in a couple of laborers to install them, they are most likely going to be considered employees, and if one is injured, you are on the hook for costs of treatment, rehabilitation, and possibly continued costs for permanent disability. My guess is that your homeowners' insurance will deny coverage, leaving you alone to bear all those costs. Further, if you haven't withheld and paid items like income taxes and socalled security, you face the prospects of becoming familiar with a criminal lawyer. And even years later, when those employees decide they want social security, guess who is on the hook for not having paid it? Too many people don't realize that a contractor's cost for labor is far more than the hourly wage his employees draw. My son lives in California, where it is apparently common practice for homeowners to pick up a few off-the-books workers for a project. Apparently, it is not uncommon for those workers to have the skill to do the work, but I would be surprised if they new the codes involved. I always advise him to get a licensed insured contractor or do the work himself, just because of the liability issue.
I do a little work around my home, but for many things, hiring a good contractor is an excellent idea in terms of getting skill and knowledge, and saving time. On the other hand, knowing that I don't sweat joints well, I hired a man to put in some fairly complicated new water lines; he assembled everything before starting the sweating (a good idea, it seems to me), but because there were so many connections, he forgot one (not a good idea). When he turned on the water, I got my money's worth in amusement, and learned quite a few new words, too.
Eric in North TX wrote:
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