I'm planning a big renovation that involves gutting my kitchen, installing a new kitchen, removing a wall, and renovating two bathrooms. My contractor is requesting a 75% deposit upfront, with the remaining 25% to be paid upon completion. I'm wondering if this is a standard practice in the industry and if there's any risk involved for me as a homeowner. Also, the contractor is licensed and insured, which gives me some peace of mind, but I still have concerns.
3 Answers
75% is way too high! I wouldn’t feel comfortable with that. You should definitely ask for more incremental payments. Maybe 30% when materials are purchased, another 30% when everything is roughed in, and then the final 10% when the project is fully done and you have all the necessary paperwork in order.
Not standard at all! You should feel cautious. It's also good to check local laws since in some areas, such high deposit amounts can actually be illegal. Trust your instincts—if something feels off, it probably is. Spread those payments out over the project's phases, and ensure you're getting receipts or proofs for any material costs that are covered upfront.
No, that deposit amount is definitely not standard. Typically, payments should be broken down into stages based on progress. A more common structure would be around 10% to 20% upfront, with additional payments at stages like completion of rough work and final touches. It’s risky to pay so much upfront with such a large project.