Is It Normal For A Contractor To Ask For 30% Up Front?

Planning a major home improvement project is exciting, but it is also stressful and expensive. There are lots of moving parts to consider, which is why it is so important to hire a great and trustworthy contractor. Once you find a good contractor, you are hopefully a little less stressed. But when this contractor asks you for a whopping 30% up front, you might start second-guessing your decision.

If a contractor asks for 30% of the total cost of a home improvement project up front, this should cause alarm, but it is not unheard of. Several factors can impact how much a contractor asks for up front including the materials required, the scope of the project and even the state you live in. Check your local laws, as many states cap the maximum amount that contractors can collect up front.

If your contractor just asked you for 30% of the total payment up front, you have good reason to be worried. This is not exactly the standard, and depending on the project size, this could be thousands of dollars.

Before you fork over all the money, there are several things you should consider. First, make sure you have a contract before you start advancing money. As well, find out how much your contractor is even allowed to request before he or she starts the project.

If your contractor asked for a large sum up front like 30% of the total cost, you might wonder exactly how much a contractor is allowed to collect up front. The answer is — it depends. In some instances, your contractor can request whatever percentage he or she wants. It is, in turn, up to you to negotiate.

Price and payment negotiations are common practice, and often part of the interview process when you are looking for the perfect contractor. So be aware that just because your contractor requests a lot up front, it does not mean you need to pay it. You can always choose someone else or try and negotiate. But before you drop your contractor because he or she asked for 30% up front, you should consider the factors that can impact how much a contractor might ask for before the job starts.

There is no universal set percentage for how much a contractor typically asks for up front. There are, however, trends and guidelines as well as rules imposed by states. In California and Nevada, for example, when you draw up a contract, prepayments are limited to either $1,000 or 10% of the total cost (whichever is less). Other states have their own specific rules that dictate the norm. It is safe to say, however, that anything about 30% is high and something you should question. Make sure you look into it before moving forward.

It is critical to create and sign a contract with your contractor and map out all payments and time frames within this contract. It is entirely possible for a contractor to walk away from a job halfway through, leaving you with little-to-no recourse.

A contract makes everything crystal clear, including expected results, costs and payment schedules. This way, when things start veering off course, you can reference your contract and request adjustments.

Remember that many reputable contractors don’t require a penny up front. This is not simply because they are “nice” and trustworthy. It is because they have capital. If a contractor requests 30% up front, then there is a good chance money is very tight.

These things happen, but if there is no money for supplies, this might also mean a contractor will cut corners. This might include underpaying workers, which can result in low-quality results. This is why it is very important to check references and recent past work when you negotiate with a contractor.