Contractor Payment Schedule Typical: What You Need to Know
If you`re hiring a contractor for a construction or home improvement project, it`s important to know what to expect when it comes to their payment schedule. A typical contractor payment schedule can vary depending on the type of project and the individual contractor, but here are some general guidelines to keep in mind.
Initial Deposit
Most contractors will require an initial deposit before they begin work on your project. This deposit is typically around 10% to 15% of the total cost of the project, although it can be higher or lower depending on the contractor and the project. The purpose of this deposit is to cover any initial costs, such as materials or permits, that the contractor may need to purchase before starting work.
Milestone Payments
Once work has begun on your project, the contractor will likely require milestone payments at certain intervals. These payments are usually tied to specific milestones in the project, such as the completion of framing or the installation of plumbing or electrical systems. Milestone payments can range from 10% to 25% of the total cost of the project, depending on the contractor and the project.
Final Payment
The final payment is typically due when the project is complete and all work has been approved by the homeowner. This payment will usually be the remaining balance of the total cost of the project, minus any previous payments that have been made. It`s important to note that the final payment should not be made until all work has been completed to your satisfaction and any necessary permits and inspections have been obtained.
Some Additional Tips
When working with a contractor, it`s always a good idea to have a written contract that outlines the payment schedule and other important details of the project. This can help prevent any misunderstandings or disagreements down the line.
You should also be wary of contractors who ask for large upfront payments or who require payments to be made in cash. These are both red flags that could indicate a less-than-reputable contractor.
In conclusion, a typical contractor payment schedule will usually involve an initial deposit, milestone payments, and a final payment. However, it`s always important to read your contract carefully and communicate with your contractor to ensure that everyone is on the same page. By doing so, you can help ensure a successful and stress-free home improvement project.