What is a reasonable payment schedule for a building contractor?

Question

My house needs about $50,000 in renovations. What is a typical payment schedule I should expect in the contract?

Answer 1

A good rule of thumb is 20% at the start, 60% paid out in stages as various stages of the job are completed, and the final 20% upon total completion and passage of any applicable inspections. Each job is different, so the payment schedule should be tailored to the job in a way that is fair to both you and the contractor.

Answer 2

I depends on the tasks, each one has a different value, you may have a $300 door and $5000 furnace so you want to creat a schedule of values for each task, then decide on a retainer. If the work has to be inspected I would say 20% if not then maybe 10% for the retainer.

Good Luck

Answer 3

I would tie the payments to his costs.

So, when the materials show up in your driveway, he can bill you for those materials - if he needs the money before he can go buy them, then he's not a good businessman and I wouldn't deal with him.

When each "task" is completed, he should be paid for the labor associated with that task So let's say he's putting a bathroom, kitchen, and living room in your basement. Each time a room is complete, or a section (floor, wall, ceiling, electrical), he gets the money that it cost him in labor. If he needs the money to pay his staff, see above cautionary tale.

The last 20% should be after the job is totally complete -

Answer 4

I have done several renovations and what I insist on is 1/3 at the start 1/3 at halfpoint and remainder upon completion. this keeps you from giving to much money and then not seeing them back.