Offer to pay for work as it is completed, and for materials as they are delivered to the job site.

Nothing up front. Pay when demo is complete, framing, decking, railing etc.

This should not hurt him, gives him some incentive to get the job done, and protects you as you are paying only for completed work and materials that you have.

Bear in mind that contractors who want money before they do the work are typically the least solvent and the most likely to default. I've done four remodels and got billed monthly as the work progressed. Never in advance for either hours or materials.

Think about this: an established contractor should have accounts with materials suppliers and should be able to charge these materials to his accounts as he obtains and installs them. There should be no reason that you should have to pay him in advance. An alternative would be to see if he is willing to present bills to you and you pay as soon as the materials show up on site. That way he doesn't walk away with your money if he encounters financial problems prior to materials actually being bought.

You need to protect yourself against worst case scenarios. There are plenty of threads here of people whose contractors disappeared with advance payments, or got fully paid and never finished the job, or did crappy work but got paid and the homeowner had no leverage.

Some state laws allow only 10% as down-payment of the total project cost and partial material cost can be included for certain products which need to be ordered like kitchen, etc and the rest of the payments due as the job progresses.

In our area it's typical for contractor to receive a reasonable deposit prior to work beginning at the site. Keep in mind, that they started incurring costs prior to contract and will incur others (e.g., permits) even before the first materials will arrive.

A client who is unwilling to pay any deposit might suggest to the contractor that getting paid will be an issue. Every project carries risks for both the home owner and the contractor. Achieving a fair balance of those risks lays the groundwork for a better outcome for everyone.

@Charles Ross Homes Basically this is how it ends up ,... Only the deposit at signing of contract cannot be more than 10% of the total cost... That is the law.

So instead of getting one check, it's broken up into 2... down payment and 1st payments before you start..

Many contractors structure it at 50/40/10. This isn’t a labor buyers market. It’s a labor sellers market. You will have a lot more difficulty finding someone good to take the job than he will to replace you in his schedule. If you fully checked out his license, insurance, and references, and looked at those past projects, and still don’t trust him to do the job, perhaps you should find someone one that you do trust, Trust is a two way street. You’re sending him some untrustworthy signals too.

Have a conversation on with him. Face to face.

Thanks for all of the input! I understand the option to pay as work progresses, but most homeowners don't really know the cost associated with each phase of work. That makes it hard to evaluate the value of each phase completed or yet to be completed.

I had a contract like PPF, mentions except I did not even have to pay for supplies as they were delivered. I received invoices after each phase was completed ( i.e. Framing, drywall, roof, plumbing etc) within a week. I had to pay within two weeks or work would halt and he had a lien to protect his potential loses. It went well.

numbersjunkie-

That's why you use a contractor who gives you a monthly bill showing hours worked and invoices for materials bought.

That detailed accounting is only an option for time and material contracts, which are very similar to a cost plus a fee contract. Time and materials incentivizes slow work and only should be used when unknown conditions can not be accounted for in the initial inspection.

Lump sum contracts are the most common contract type. They require no accounting at all beyond you accept the bottom line price and sign the contract and accept the contract price. The individual details are proprietary information for the business. The only exception would be a time and materials change order within the lump sum contract, created when hidden conditions are discovered. Like moisture damage or structural issues. A contractor may choose to give an approximate breakdown of project categories, or materials expenses, but that is not a requirement. The important number is the total, and the disbursements schedule.

Not trying to pick a fight, but I've had time and materials contractors who moved right along and stayed on time. I accept that it can be abused by a contractor using it to fill in when a contractor is juggling different jobs.

Live_oak_wire did a really good job of describing different contract alternatives.

To be sure, time-and-materials (T&M) type contracts require the greatest amount of trust on the part of the client. They are appropriate when the scope of work is unknown or the scope of work is too small for plans and specifications and estimating or the client wants the work done immediately. For example, miscellaneous rot repairs that will take only a day or so to complete or closing in a roof after storm damage.

In a era of social media, contractors derive more benefit from adding value for their clients and getting good reviews than taking advantage of small T&M contracts.