Paying A Contractor Questions


Old 11-16-06, 04:41 AM
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Paying A Contractor Questions


Getting a bit ahead of myself here, but in the Spring will be having all new siding and windows installed.

What is "typical" as to how the contractor is paid ?


I imagine it's reasonable to pay him the amount for the window costs (but not labor) early on so he
can purchase the windows beforehand. Right ?

And I guess some kind of additional deposit is also reasonable beforehand.
If so, what approx % of the total price should this be ?

How about the overall payments:
Would splitting it into thirds, perhaps, be typical ?
Such as 1/3 of the est. cost after 1/3 of the work is
done, etc. ?

Really don't know how to handle this;
Don't want to be made a fool of, but also want to
do what is considered normal for this.

This would be a contractor who runs his own Very small business.

Is some kind of "bond" normal to protect us to make sure that the job is completed, etc.?
Don't want to scare him off, but If so, what and how ?

Any thoughts would be most appreciated.

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Old 11-16-06, 05:16 AM
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Payout can be whatever you and the contractor agree upon. If he is small time, he may need money for materials up front although most contractors have accounts with thier suppliers.
Mostly it depends on the length of the job and the total cost.

Make sure the payout schedule is written into the contract, including what needs to be accomplished for each payout especially the final one.

Also make sure the contract specifies a start and completion date.

Just be sure that you hold back enough (at least 10% - better 20%) of the overall cost to make sure that the guy finishes and that the work is acceptable to you.
Old 11-16-06, 05:05 PM
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I'm a contractor, and my basic payment schedule is to get about 10% of the contract price on signing, about 50% of the remaining balance (45% of the contract price) upon delivery of the material, and the balance on completion. That's the BASICS! Then I factor in other things like how much and when I'm going to have to pay my workers, and how that relates to the progress on the job; when and how much I have to pay material bills, and how that relates to the job; and how large the checks are and what I have to do to make it easiest on the homeowner.

Your job is siding AND windows. If I were your contractor, you would probably be looking at writing me 5 checks -- the down payment, the second would be enough to cover the cost of the windows, a third check when the windows are done, a fourth check when the siding is delivered and the last check when the job is finished.That is about as fair as it can be for both the homeowner AND the contractor. You are paying as we go, and I'm getting paid as we go.
Old 11-16-06, 06:06 PM
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I agree with Mike and Wayne, but the most important thing you can read in their posts is to have it agreed upon up front as to how it is to be paid and preferrably in writing. That way, there are no hard feelings, and you won't feel foolish. I often do the 1/3 at onset, 1/3 at dry in and 1/3 upon completion, but it can vary depending on materials delivery schedules and subbies.
Old 11-16-06, 07:12 PM
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I'll go the other way on this one! This is so small of a job Maybe a weeks worth of work (Guess) that payment should be at end of project. Don't know anything about your home but lets say $12,000.00 With that little bit of money Id Waite to the end.
Old 11-17-06, 04:38 AM
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Not sure what would constitute a large job, but for small business operators, putting your money out for materials is not a good decision, even if you have accounts with suppliers. Even if you wait for your labor til the end (normal), I would require materials money up front, especially if they have to be ordered, delivered, etc.
Old 11-17-06, 06:47 AM
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Think thirds

In many states, it is illegal for a contractor to accept more than 1/3 the total cost of the job up front, unless there is a special circumstance, such as a custom order. The people on this thread are correct when they say to get it all in writing. The contract is the most important thing. You want it to be as detailed and specific as possible. Set milestones for when you pay out. That takes the pressure off.

I tried to wing it earlier this year with some remodeling. I didn't have things itemized within the contract and I ended up paying too much too soon. Before I knew it, the contractor had 90% of the money before 30% of the work was actually done. He never came back and the rest is history. Lessons learned.

Even if it is someone you know, they should understand why you'd want the contract that way to protect yourself. If they intend on doing a good job, then there shouldn't be a problem anyway.

Good luck.
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