Huge Down Payments: How Much Should You Pay a Contractor Upfront?

Some contractors will ask for a big payment before they even start work. That’s a warning sign! You want to pay as little up front as possible to keep your money safe.

Why Are Big Down Payments a Bad Sign?

• You Lose Power: If you pay too much at the start, the contractor might not show up—or use your money for another job.

• Slow Progress: They might drag their feet and do the work slowly, because they already have your money!

• You Could Lose Money: If the contractor disappears, your chances of getting your cash back are slim.

What Is a Normal Down Payment?

Every state is a little different, but in lots of places, like California, the law says you should never pay more than 10% or $1,000 (whichever is less) before the work begins.

The rest of your payments should be tied to milestones—for example, when the walls are framed, when plumbing is finished, or after inspections.

How to Protect Yourself

• Ask about the law in your state.

• Negotiate so you don’t pay too much at once.

• Make sure the payment schedule is in writing in your contract.

If a contractor demands a huge down payment, you might want to find someone else!

Ready for another important warning? Next, we’ll talk about the dangers of vague contracts.

And for the best guidance in local real estate:
Best real estate agent in Falmouth, Heath Coker