How Much Money Down Should I Pay for My Remodel?

Posted by Devon Shryock

Excellent question!

Here's what the National Association of the Remodeling Industry says about money down. This is on their website:

"There are many different scenarios that determine a payment schedule in the remodeling industry. Receiving some sort of money down (or down payment) at signing is a good practice to ensure a customer’s sincere intent to do the project. A contractor is not a bank therefore a payment schedule should be part of the conversation and certainly in the contract language."

 

Typical down payments are 25% to 33%.

Sometimes even higher depending on the type of work being done A down payment is highly recommended when products have to be ordered by the contractor immediately. Doors, windows, cabinets and specialty items are usually ordered well before the construction starts. The monies collected at the closing are insurance that the ordered products can be paid for by the contractor and not he /she is left with a pile of bills if the unforeseen should happen. Dividing a project into 3 or 4 equal payments allows the contractor to keep abreast of the project’s labor and material costs. Payments are most likely tied to a production schedule with predefined milestones.

These are only suggested down payments. Although these reflect a norm in our industry down payments and a payment schedule can be whatever is negotiated between the contractor and client. The important thing to remember is that a business cannot survive without a cash flow."

How much down does S.E.A. Construction require to secure my project in the schedule?

Well, in most cases, we don't ask for money down. Materials are generally ordered first and then invoices are cut accordingly. While we do not front the necessary fees, it is not traditional for us to ask for a check up front before we place the first order. There have been exceptions when it has been agreed between our clients and ourselves, but this is atypical at S.E.A.

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