Payment Schedules

fiore22

Here in California you are only able to take $1000 or 10% as a deposit. This is what the Contractors Board wants you to do, I do it. After that you need to come up with a payment schedule. Typically my schedules are pretty front loaded. I have had a few concerns from Clients regarding this, one of them wanted to rewrite my payment schedule all together. Payment schedule being the terms at which you receive draws during construction. Also, I'm a talking about remodels, not new construction. I wanted to know how you guys come up with your payment schedule...typically for a $25,000 Job: $1000 deposit, $12,000 after demo, $7000 after framing, $2000 after drywall, $1400 upon completion. Am I being too hard or too easy???

- I have exceptional and plentiful (legitimate) references who can attest to my integrity. They don't have a single damn one as to who can attest to theirs'.

A.W.Davis

I dont see why the homeowners are complaining they are getting a $25,000 job for $23,400

I would do things a little different though, I would spread the $12,000 out a little more throughout the payment schedule,but thats just me.

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A.W. Davis Construction Co.
http://www.awdavisconstruction.com/
Your friendly remodeling contractor

Mike Finley

Win/Win always works for me in business matters.

If I find I have to explain something too much to a customer it turns into sounding like you are justifying it and you lose your credibility.

I structure payment schedules so both of us neither get too far head or behind of each other. Customers seem to appreciate and understand that.

The one thing I do is always keep the final payment low, usually under $1000.00.

I see no reason to tempt the temptable.

A.W.Davis

Same here. Usually the max I will go is $1,500

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A.W. Davis Construction Co.
http://www.awdavisconstruction.com/
Your friendly remodeling contractor

Chris Johnson

Just remember the $ 1000.00 we can accept as a deposit in California is just a deposit, the first day you show up you can invoice more, we call the deposit 'holding the job in que' usually I start the job and within the first 5 days materials have arrived and I start billing.

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Chris

Celtic

In NJ, you cannot recieve a final payment until after final inspection.
That being said, I try and limit the final payment to 5%.
The breakdown is like so:
50% at signing/before work commeneces
25% prior to rough inspection being called for
20% prior to trim out
5% after final is called for.

If there are changes prior to rough inspection, I'll roll those numbers into the percentages.

Changes after rough and/or insulation/sheetrock is started are T&M and that full amount is due prior to the next benchmark (trim or final).

According to my calculation (so we know the numbers are dead nuts right on), the rough portion runs at 67% of the job total.

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dayexco

most of my jobs won't release final 10% until all punch list items are addressed if any.....and you have lien waivers from your suppliers and subs turned into owner of project. on larger jobs, this can be a considerable amt of dough, but we know this going into the job.

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someday, i'll be as patient as Nick.

Tmrrptr

I like thirds. Keeps everyone interested.

and Day brought up retention.... 10% w some builders that hurts!
it could be a year! someone else drawing interest on your money.
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