what’s the typical amount paid (if any) to a contractor up front for a standard rehab?
Normally, the contractor’s agreement would stipulate that the customer pays when certain things are completed. On small jobs, you should not be paying anything until the entire job is finished.
On larger jobs, you might pay in installments, when certain things are completed; always holding back the last 10% until the entire punch list is completed.
A ‘punch list’ is all the final details that need to be finished, fixed, completed, redone, etc. When the punch list is all checked off, the customer pays the contractor the last 10% of the bill. Sometimes 10% is the entire profit on the job, so it’s an enormously powerful tool to make sure the job gets finished to satisfaction.
As far as deposits are concerned… It’s kind of dependent on the trust you have with the contractor …and his trust in you. If you appear to be an iffy customer without a lot of financial capacity… don’t be surprised if the contractor asks for a sizable deposit before work begins. This will likely be a seasoned professional, who’s been burned by iffy customers.
Otherwise, if the contractor doesn’t have a long/good track record, and asks for a deposit, he might be operating on a shoe-string, using your deposit to complete work on someone else’s project, and/or taking your money and disappearing.
So, if you don’t have trust, you might not give the contractor a dime, until he begins performing as expected.
Ryan, I can only add that Jay is absolutely correct.
I gave a local handyman the full price for a simple job of removing some shrubbery around a house. He did about half and left…it took me six months to track hm down and get the rest done.
NO TICKEE…NO WASHEE
thanks for the input guys…i appreciate the info. :beer
For small jobs, I’ll supply materials, or reimburse materials as soon as they are purchased and used.
Labor gets paid as specific jobs get completed. Always hold back final payment until that punch list is done.
On large rehabs, 10k+, I use a GC who I know and have used successfully.
I will pay him 1/2 down and half on completion.
No pay on the second half until punch list complete.
I’ve used contractors that have there payments: first is about 20% up front. Next is 60% when the bulk of the work is done. Final is 20% when everything is complete. Each contractor is different and I find the payment schedule can often be negotiated. Anything under $1000, I don’t pay anything up front unless it’s basic materials.