Money Up Front

A-Bulb

Is it unprofessional to ask a builder or customer for say 10% of contract price to help cover material cost? I havent done this But would really like to . What do U think?

mpvoss

I always ask for 30 percent upfront. I have had to many people back out after I get the materials ordered. This way it commits both the ho and you to the project.

Marlin

ultimatetouch

I usually get 20-30% up front, this is pretty normal most places. Some states regulate how much you could take as a downpayment. THe more money you get the less chance you have of getting screwed by a crazy customer. Which they dont come up often but you want to be in the drivers seat when they do. Always get money up front or you have a good chance of someone taking you for a push over. No offense but thats stupid not to get at least enough to pay off all your materials and then a little labor. The downpayment should also depend on your material costs. If it was going to cost me 50% for materials then I would at least be asking for that.

__________________
Ultimatetouch
Illinois Remodeling Company, Kitchen Remodeling Chicago, Room Additions Illinois

tnt specialty

I have to admit, I was surprised at the apparent popularilty of the practice.

In 25 yrs. I've NEVER asked for a dime up front.......If I thought someone wasn't going to pay me, why in the world would I want to enter into such a stressfull situation? Not to mention the fact that, by the mere act of asking for money up front reflects financial incompetence, as well as mistrust....two very undesireable situations that I'd rather avoid, thank you very much!

MattCoops

We take a third up front, unless cost of materials is more, in which case we take that.

__________________
Matt with Cupan Custom Tile & Paint of Lowell, Massachusetts
Design and installation of ceramic tile and natural stone for floor, wall, and countertops
(978) 601-8774 | cupantile@gmail.com | view tile pictures and more

BuiltByMAC

If you give them a contract that has a payment plan spelled out, including an earnest money or deposit payment, that's completely professional. It's only unprofessional if done in an underhanded way...or if you take the deposit and run.

Actually, it's asking for fair trade. Hopefully, your reputation precedes you so the HO will have no problem making a deposit to be put on your schedule. The upfront cash commits them to the project. If your method has worked for you for 25 years, by all means continue what you're doing. Obviously, you've figured out how to survive without getting a payment up front. But I don't agree that asking for a down payment reflects financial incompetence, nor mistrust.

I trust all my HO's, I still make them sign a contract though. I am financially competent, I still make them invest in and commit to the project. I'm not a bank, I don't lend money.

Mac

ChrWright

Are you kidding me? That's complete and total BS when said as an absolute for every project regardless of size and cost.

__________________

Christopher Wright, CR: President @ WrightWorks, LLC/President @ Central Indiana NARI, Named to the 2010 REMODELING Big50
www.WrightWorks.net - Facebook - Twitter - Carmel Remodeling
Indianapolis Kitchen Remodeling Contractor - You Can Get There From Here

orson

Its not my job to finance the project for my customer. I don't charge my customer debt service costs so I expect the money for materials basicaly at the time I order them. In the long run this saves the customers money as I can take advantage up price leveraging by having cash in hand to pay for the supplies. In summation, I don't think there is anything whatsoever wrong with covering my own ass so I don't get hung out to dry with a materials bill I can't pay because I got no deposit. What you call mistrust I call prudence.

www.rubycon.us
Ruby Construction LLC
Lancaster Kitchen Remodeling
Lancaster Bathroom Remodeling

tnt specialty

This subject typically get's alot of people fired-up and defensive!

Likewise, I would never pay anyone "up front"....
They're paid promptly the applicable method once the service is rendered.

It's JMHO, but it's these type of practices that simply add to the general public's view of the degradation/character image of the typical contractor.

There ya go....chew on that awhile.......blast away!!!!!!

ChrWright

It's a waste of time to rehash an old argument. Anyone new to this should read the following:

http://www.contractortalk.com/f11/downpayments-24427/


SSDD

__________________

Christopher Wright, CR: President @ WrightWorks, LLC/President @ Central Indiana NARI, Named to the 2010 REMODELING Big50
www.WrightWorks.net - Facebook - Twitter - Carmel Remodeling
Indianapolis Kitchen Remodeling Contractor - You Can Get There From Here

Double-A

When you buy tickets to a concert, you pay before hand. When you fly on an airline, you pay before hand. When you go to a museum, amusement park, order a hamburger at a fast food restaurant, purchase a newspaper, you pay before hand.

Why is it OK for these people to charge you something before delivering goods and services and not a contractor?

__________________
"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

kevjob

we get all materials at time of signing so we can order everything before projects starts. usually we start 3-4 months later.

__________________
Kevin
Basement Finishing Highlands Ranch Colorado
Littleton Colorado, Basement Remodeling
Kitchen Remodeling Denver

john elliott

That's sound like trolling to me

John

__________________
Ed the Roofer said "John too, in his crass and blunt demeanor.............."

Standstrong

10% of proposal due at time of contract signing.
This 10% is non refundable, and secures next spot in schedule.
If they back out then, you are all over the place trying to move up the next job, so the 10% compensates the time it takes to maneuver it all around.

50% of remaining monies upon start date with a drop of materials, and I usually pull my trailer to the jobsite.
I do not pay for materials and it is on credit with my vendors.

The final payment is the remaining 50% of the contract price. If they are any discrepancies of payment then the vendors and myself would lien the property for the remaining money owed for materials, and contract price.

I have never had to utilize the lien. But probably should have once.
A friend of mine has a lien he fills out every time he starts a job and fills out the lien waiver and hands it to the customer when they pay.

I typically don't ask for any money if the job is under 2000 dollars, but I almost always work from referrals with small jobs.

tnt specialty

Double-A;

Your talk'n apples n' oranges.....

I suppose it has to do with commoditiy type items vs. more skillful sensititve items/services; Also the provider's integrity/confidence.

One doesn't typically pay in advance for say, a haircut, dinner at a fine restaurant, when you go to the dentist, or say, for family portraits.

JHMO......again

If one feels they need money up front, then so be it......The more of our competitors that do..... just makes the sell easier for us!.....Just sharing my thoughts.....as you all do........

Double-A

My point was there are plenty of things in this life that you must pay for before you receive them.

That being the case, it seems less reasonable that paying for something before services are rendered is a warning sign, a sign of financial decrepitude, insolvency or would degrade anyones perception of a legitimate business conducting itself in this manner than you are making it out to be.

If you don't do it, more power to you. However, I'm not in the business of conducting business for free. I do not build on spec.

Many of us are involved in multi-thousand dollar jobs. Sometimes several at once. There is no way we can tie up assets for the duration of a job by waiting until completion for payment. It's just plain silly.

Feigning noble indignation at this practice is insulting on many levels, not the least of which is practical experience. Those of us that practice this technique are no less legitimate or trustworthy than those of us that do not. I resent the implication.

If that was not what you intended, I apologize.

__________________
"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

ChrWright

Give me a break, Tom...You're just trying to get a rise with your holier-than-thou, "integrity/confidence/professional" crap.

Your personal preferrence is your personal preferrence. That's fine. But don't say it's your "Humble Opinion" when you insult the rest of us with snide comments like that and expect a free pass.

We get the point. Your USP is that you don't take deposits.

You sound a lot like the guy who'll tell you "Why, we don't really need a contract do we? No money up front. I'm an honest guy, straight forward. My word is my bond. I know how to take care of people..." yadda, yadda, yadda.

Here's a tip kids--run, don't walk, when you here that kinda talk.

Anyone that has to go out of their way to tell you how professional, ethical, etc. etc they are.....

"Me thinks thou doth protest too much..."

__________________

Christopher Wright, CR: President @ WrightWorks, LLC/President @ Central Indiana NARI, Named to the 2010 REMODELING Big50
www.WrightWorks.net - Facebook - Twitter - Carmel Remodeling
Indianapolis Kitchen Remodeling Contractor - You Can Get There From Here

tnt specialty

Sorry also for the missunderstandings........

I thought the issue was "up front" money....Money prior to delivering anything.

Of course we require monthly progress payments, as most contractors do.

I just feel taking money "up front" is a bit tacky.......and the fact that not asking for "up front" money, might add to their credibility.

I know as a GC, over the years, on rare ocaisions, I've had to deal with a sub that is more concerned/obsessed with collecting their money than they are in providing a quality service. It's downright discusting; The relationship typically comes to a screeching halt.


How's that?

Double-A

If you have a contract, verbal or otherwise, that means you've invested time and effort in that job. Accepting 10% before the job starts isn't 'money prior to delivering anything'.

You're already invested, why shouldn't your client be?

__________________
"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

mahlere

this is why you take a deposit...to avoid these situations