Contractor Deposit.

[Sandra Baxter]

I'm getting some work done at my home that's going to cost 3K. A contractor that gave me the estimate took me around to many other homes in my area he did and his work looks good. His price was in line with other quotes. Anyway I called him back to move forward and hire him to do the work. He wants half up front so $1500. That seems steep to me doesn't it? Whats the industry standard for residential contract work deposits? I was thinking more like 25% up front.

Thanks guys.

 

[Mod100]

Ten to twenty percent is normal. Anything more is a warning sign.

If I may think of the following. Workers compensation certificate. Is he doing the work or is he subbing it out. That should be in the contract. You like the work he did but still talk to the owners.

Just a few thoughts from my years in construction.

 

[Sandra Baxter]

He is doing the job with his employees. Thanks for you help. I'll kindly tell him to go fuck himself if he wants 50% and that you said 20%. Mods word is final

 

[jazzpig]

Twenty to twentyfive percent is the norm on a much larger job. Although % is lower, the $ are higher.
On a 3k job, 50% is fair and common.
It'll probably cover the materials, this way in the event the contractor gets stiffed, he's not out of pocket.
The probability and the reality is that contractors get stiffed more on the smaller jobs because the amount is so low and hard to chase.

Unless you know my buddy Guido.

It's only $1500, and if you have good and valid reccomendations and he's known, don't get stuck on a principle.
The fact that he's using his own guys makes it all the more critical for him to collect the money because he can't stiff his own employees.
If he was sub-contracting the work he's less vulnerable because if he get's stiffed, he passes the liability on down to the sub.

General Contracting 101.

 

[TROOPS]

Please explain the work being done for $3g.
25% start
50% midway thru job
100% end............is reasonable.

 

[jazzpig]

Please explain the work being done for $3g.
25% start
50% midway thru job
100% end............is reasonable.

If I came to you by way of good referrals, you saw the quality of my work and were happy with it, my prices were comparable (which means I'm not
lowballing the price to get the money and run) and you wanted to quibble like that for a $3g job, I'ld probably walk from it. For a $3g job,
I'm in and out in less than a week. I have to collect 3 cheques in a week or less?
C'mon.

 

[ctv250]

I had a crew put a new front porch and walkway in 2 years ago. It was a $12k job and the contractor told me I pay when the job is done and I'm happy with it. It took him a couple of weeks and I had to call him to make arrangements to pay him. I had a problem with a couple of stones shifting last summer, called him and he sent someone out within a week to fix it. The job wasn't the cheapest, but pretty much right in the middle of the quotes I received. If a contractor can carry the costs of a $12k job for a few weeks, I don't know why yours needs half the money up front to buy material. I'd be leary...

 

[jazzpig]

I had a crew put a new front porch and walkway in 2 years ago. It was a $12k job and the contractor told me I pay when the job is done and I'm happy with it. It took him a couple of weeks and I had to call him to make arrangements to pay him. I had a problem with a couple of stones shifting last summer, called him and he sent someone out within a week to fix it. The job wasn't the cheapest, but pretty much right in the middle of the quotes I received. If a contractor can carry the costs of a $12k job for a few weeks, I don't know why yours needs half the money up front to buy material. I'd be leary...

The issue is not whether a contractor can carry the cost or not. It's about consumating a commitment. I'm glad you found a good and honest contractor and I'm even happier for him that
he found an honest and appreciative client. And most jobs do end positively. It's not always the case.
If your contractor operates like that all of the time, he's either stupid, or really lucky. I'm not denegrating him but like any other business, it's about risk management.
List me any other big ticket item you get without paying in full or at least a substantial amount up front.
I don't know any seasoned, quality contractors that operate without a downpayment. Mostly from painful lessons, including myself.
I would be leary...if someone refused to pay a downpayment.

 

[TROOPS]

I agree...... deposit is mandatory in order to ensure the contractor has set aside that time frame to do the job.

 

[bababuey]

If I came to you by way of good referrals, you saw the quality of my work and were happy with it, my prices were comparable (which means I'm not
lowballing the price to get the money and run) and you wanted to quibble like that for a $3g job, I'ld probably walk from it. For a $3g job,
I'm in and out in less than a week. I have to collect 3 cheques in a week or less?
C'mon.

doesnt quite qualify as quibbling. i was offered same terms by a contractor, about same value.
but im not in this world, just an n of 1.

 

[TROOPS]

If I came to you by way of good referrals, you saw the quality of my work and were happy with it, my prices were comparable (which means I'm not
lowballing the price to get the money and run) and you wanted to quibble like that for a $3g job, I'ld probably walk from it. For a $3g job,
I'm in and out in less than a week. I have to collect 3 cheques in a week or less?
C'mon.

Was just curious to know what kind of work being done, so i can factor in the cost of materials and then i can assess if the 50% is justifiable. certain jobs require a larger deposit. materials, special orders, manpower, etc.

 

[jazzpig]

doesnt quite qualify as quibbling. i was offered same terms by a contractor, about same value.
but im not in this world, just an n of 1.

Just my 2 cents. My work is done here.

 

[fmahovalich]

Ensure you know the schedule he is promising.

For a 3 k job...1500 is not unreasonable.

If the scheduLe lapses..your still have cash to withhold!

 

[Sandra Baxter]

Twenty to twentyfive percent is the norm on a much larger job. Although % is lower, the $ are higher.
On a 3k job, 50% is fair and common.
It'll probably cover the materials, this way in the event the contractor gets stiffed, he's not out of pocket.
The probability and the reality is that contractors get stiffed more on the smaller jobs because the amount is so low and hard to chase.

Unless you know my buddy Guido.

It's only $1500, and if you have good and valid reccomendations and he's known, don't get stuck on a principle.
The fact that he's using his own guys makes it all the more critical for him to collect the money because he can't stiff his own employees.
If he was sub-contracting the work he's less vulnerable because if he get's stiffed, he passes the liability on down to the sub.

General Contracting 101.

He came over for the deposit this evening. I asked him 50% is a little high isn't it? He said it's pretty standard. I said I'll give you $750 and he said OK right of the bat. I walked in the house to get a cheque and he looked down at the estimate one more time and said if we could make it at least $1000 so I agreed. I feel OK with that as he's already done a lot of work in my subdivision. He's starting Wednesday.

Thanks guys for your input

 

[wellhungone]

so key factors, is this a cash deal ?
Does he have a legit company /
does he have WSIB and Insurance ?
Does the work you are getting done require a permit ?
Is he licensed for the work (i.e. skilled trade)

$3K job, does not require a 50% deposit, 20% up front payment with progress billing to 50% then final payment at 100%, but keep a 10% H/B just in case for touch up - payable 15 days later.

It seems he is using the money to pay off debt =.

 

[jazzpig]

He came over for the deposit this evening. I asked him 50% is a little high isn't it? He said it's pretty standard. I said I'll give you $750 and he said OK right of the bat. I walked in the house to get a cheque and he looked down at the estimate one more time and said if we could make it at least $1000 so I agreed. I feel OK with that as he's already done a lot of work in my subdivision. He's starting Wednesday.

Thanks guys for your input

You're starting off on a good note, all should end well.
Good Luck.

 

[Gentle Ben]

T
..... Workers compensation certificate......

also not a bad idea to request a certificate of liability insurance

as a homeowner you can be held legally responsible for any injuries to him and/or his employees / sub trades if he's not covered , or in default with WSIB.
Certificate of liability ins is also good in the event he causes damage to your property , ie starts a fire, drops a hammer on your $10k heirloom etc....

 

[fmahovalich]

Guys guys guys..

It's a 3 k job!!!

Not the Taj Mahal here!

Lord Tundern.

Its not much more than a couple hardwood floors.!!

Sheesh...for all the paperwork you want him pulling out..he should,walk from the job..


He has tons of references and neighborhood jobs!

Let him be!

 

[wasnotmedammit]

I'm in the middle of a 3k job now, $500 deposit (simply to secure the work), balance upon completion. I never ask for half up front.

 

[needinit]

I've had similar work - for a small job like that the 50 % covers materials in case there is an issue later and he doesn't get paid by you - hard to go to ocurt for!.

By the time he buys the materials (on credit at Home depot) he will be done the job and paid for his labour as well - a 3k job is less than a weeks work so is in and out without having to carry any costs himself.

Jobs over around 8 k, I have paid 25%, 50 % (about 1/2 way through) and kept 25 % until the end - when I was satisfied with the job - that last 25% is pure profit for him so he wants to get the job finished at that point.

If he doesn't have another job to go to, that last 25% can take a while (he is out quoting on jobs instead of being at the site).