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I've come to an agreement with a contractor I found on the list to replace my roof.  He has an A rating.  He is asking for half of the agreed upon price up front.  Is this an acceptable practice?

Thanks,

Steve

I would be cautious on this. Are you purchasing materials yourself?  If not, then if you pay the 1/2 down so he can purchase the materials.  Instead, I'd offer to pay 1/2 the amount of the materials only as a deposit and have them dropped at your site with the other 1/2 material cost paid on delivery. Then another 1/2 of the labor when the job starts, and the final balance at completion/inspection.  That would be my first offer. If the company needs the $$ for material purchase, offer to pay the supplier directly under your contract as the deposit. 

 This is the most conservative approach. 

Hi spwalker75,

 

Paul from Angie's List here.  Gadgetgirl makes some good suggestions.  Typically, we recommend prepayment between 10-15 percent of the total value of the project, but it can vary. Whenever possible, avoid paying for a project with cash.  If you can, use a credit card instead so you recourse in case something goes wrong.  Before you sign off and make a final payment, check to be sure the work is complete and to your satisfaction.

 

Good luck with the project!

 

Paul,

What is this 10-15% based of?  Industry standard is, and has been for quite sometime, a downpayment be 1/3 to 1/2 of a project.  I would say that this standard applies to about 90% of home improvement projects.

If you look at other industries, including "business to business," it is customary to require a 50% downpayment to retain someone's services.  You would be hard pressed to outsource a computer programmer to work on your website with a retainer of 10%.

On average, 50% of a home improvement project is material costs.  If a contractor is requiring only 33% upon deposit then they are taking financial responsibility for 22% of the material costs.  Putting material costs aside, there is plenty of preparation going on prior to physical work at the client's home - designs, flow charts, the ordering and handling of materials, scheduling, etc.  This is all done in "good faith."  The client has faith that the contractor is going to abide by the contract and the contractor has faith that the client is going to abide by the contract as well.

If you don't have faith in your contractor, then don't do business with them.  As a contractor, if someone comes to me with a 10-15% deposit that not only says to me that this person doen't feel comfortable doing business with me, but it also gives me the impression that I should not have faith in this person as a client.

If you are just a concerned person and has a hard time with trust then I recommend using your credit card for your purchases.  And in all cases, do not pay for the complete project upfront, nor pay the final bill until all work has been completed.

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Stephanie Bullwinkel, CBD

If its for materials, then consider making a check payable jointly to the supplier AND the contractor