I got three estimates for replacing the roof in my house. Two of the companies requested a $1,000 down payment upon acceptance of the proposal, and the rest to be paid after the completion of the job (the job is about $17K). This is in line with what is recommended by the Contractors State License Board (CSLB) and is exactly what people I know paid upfront to get their roofs done. The third outfit, gave me a very professional looking quote, I like what they are proposing, and they seem very professional, however they want a $1,000 down payment, plus 50% due upon commencement, and the balance due upon completion. That to me is a deal breaker. I can’t see shelling out that much money upfront without any work being done especially since other companies are willing to take only $1,000 up front. To quote CSLB again, they say “don’t let payments get ahead of the work performed”. Am I wrong in having concerns with the third company or is this more typical then it seems. Any advice in this area will be greatly appreciated.
well look at it this way i require half the money down or about 45% to cover costs of materials,reason being i as well as you do not want to be burned. If you want me to do your roof i will do it with YOUR MONEY not mine,this way I can’t be burned for the whole amount if you or anyone chooses to not pay or you are not happy you can hold the remaining balance until the problem is addressed its a win win business deal i;ll do your roof with half the money down this shows your serious about getting it done and i have faith in you that you are going to pay me at the time of completion if not i would put a lean against your property or if you did not give me half down and you did not pay I would be there to tare of the new roof i installed on your house with my money,after all the materials are mine and i paid for them so its good to give the contractor the money because then the material is yours and if for some reason you dont pay all i can do is put a lean against your house .
I get $100 downpayment. 5
50% upon starting the job
Balance upon completion
If you do not like the terms go with someone else. It is that easy.
Do not get your self involved in how he runs his company.
He knows like I do what the others are doing. So to try to inform me that the others are waiting till the end for their money. Means nothing.
I do not get 50% up front because of fear of not gettting paid. I am not a bank. That is the only reason for me.
Thank you for your input. I can certainly understand that a contractor doesn’t want to get burned, and getting 50% of the quoted price upfront would give him/her a “touchy warmy feeling”. But by the same token, what protects me from a contractor who may take the money and perform a “disappearing” act?
[quote=“Lefty”] If you do not like the terms go with someone else. It is that easy.
Do not get your self involved in how he runs his company.
He knows like I do what the others are doing. So to try to inform me that the others are waiting till the end for their money. Means nothing.[/quote]
That is good advice!!! Thanks.
Nothing protects you from the contractor that does a disappearing act, and in fact when payments get ahead of the work it sometimes becomes hard to get the contractor to man your job because he starts “losing” money by being there. What I would do is propose a deal where you pay an amount that basically covers his materials, then a fair percentage when the job is 50% complete, and the balance upon completion. DO NOT FORGET to get a partial release of liens with each payment, and a final release at the conclusion of the project. If the contractor is adamant about doing it his way, then I would make sure he has been in business for a good 20 years, and write a liquidated damages clause into the contract that costs him X amount of dollars for each day he is not substantially complete with the project past the agreed upon completion date.
Bottomline, there are several ways to protect yourself while still being far to the contractor and not making him finance your job.
Thank you for your valuable advice. Not being a contractor, I have what may seem as a silly question. How does a contractor “finance” my job? I assume that when he gets the materials from a supplier it’s not paid for on the spot, but is probably due within 30 days. The salaries of the workers are not paid at the end of the day. It’s either a weekly, bi-weekly, or monthly salary schedule. I am told that a residential roof job like mine takes about 3 days, at the end of which the contractor will have the full payment. So it seems to me that he/she will have their money before they have to take a single penny out of their pocket. Am I just not seeing the full picture here?
Ok there are some guys that want to do the work with nothing down and there are guys that want half down. As far as fiancing the job I agree they dont do that since the bills are not due for thirty days. Ever since i have been selling zero down has been the way i have gone and have not gotten burned once. I guess with that it depends on where you are and following your gut feeling. Some guys do 50% down due to credit issues and do not have the ablity to get it extended to pay for the materials. WHen i started i was like that years ago. If you feel more comfortable without putting money down then by all means dont put any down. I always felt funny asking for a large some of money before lifting a finger. Maybe im a put up or shut up kind of guy. But it is hard to know why a company really wants 50% down. There is really no way of knowing. Good luck with your home and have a merry christmas.
You are not seeing the full picture.
Most contractors only see what you are seeing. They like you have no idea what it takes to run a company profitable.
That is why most contractors are out of business within 5 years.
If all your friends and neighbors had these other contractors who want payment at the end and where happy with the work. Why are you concidering going with the contractor with no referral from friends and nieghbors?
If all your friends and neighbors had these other contractors who want payment at the end and where happy with the work. Why are you concidering going with the contractor with no referral from friends and nieghbors?[/quote]
All three contractors that gave me a quote have been in business for at least 15 years. So none of them are “fly by night outfits”. One of the contractors did two jobs for members of my family and was the first one I contacted. When he gave me what I thought was a very high quote, I contacted two other contractors that I picked out of what is locally called “the good service guide”. It just so happens that the one that impressed me the most is the one with the 50% upfront fee. That seemed strange to me, so that’s how I ended up inquiring in this forum if this was an unusual practice or if this is the norm. Keep in mind I don’t have experience in this area, and when even the Contractors State License Board states that one should not pay a downpayment of more then 10% of the contract price or $1,000, whichever is lower, additional information is essential to help clarify this issue.
The point also is that the other two contractors who charge only $1,000 up front are still in business, so somehow they managed to survive with their low up front cost approach.
You confirm that I do not see the full picture, but you give no details as to what my picture is missing. I only see that the difference in time between paying up front or paying at the end of a job is 3 days, 4 on the outside. This is a fast pace job, not a major renovation that takes months, where I can certainly understand that some upfront money coupled with progress payments is essential.
[quote]The point also is that the other two contractors who charge only $1,000 up front are still in business, so somehow they managed to survive with their low up front cost approach.
I never said that I or that contractor needs the 50% at the start of the job to stay in business.
There is no need for you to see the whole picture. How we run the payment part of our business is our buisness. Either you accept this or get another contractor. It is that simple.
I still do not understand why you have a referrel from 2 relatives and still looking for another contractor. Do you not trust the referrel? How long have your relatives roofs been on without any trouble?
I have to agree with lefty on this. The 50% down is there business practice and there is no way for us to know why he or she does this. I wish i could paint this picture you want but it is impossible for me to do.
The only advise i can tell you is this. If the referral does good work, and is trusted in your family why are you searching for another contractor? In this business you will get what you pay for. The price really is just a number if you are comfortable with the referral. Honestly ask yourself this, since this is a rather large investment in your home is a few hundred dollars worth the risk of having problems later with this roof and possibly damaging other parts of you home. Hope this helps Merry Christmas.
I think nobody likes to get burned. 50% upon commencement is how I do it. If the customer wants credit, I will give them a credit application to fill out and run a credit check on their dime.
I know why homeowners are afraid of getting burned. I know why contractors are afraid of getting burned. I do not think 50% down upon commencement of any job is out of line. If you do not trust your contractor with 50%, why would you trust him to protect your entire house??? Sounds a bit off the wall to me.
unless i know you very well.
i am now makin people pay the entire amount up front.
this is do to the latest h/o runnin out of money and not payin me the remainin 1600 bucks.
so everyones on the mcdonalds plan from now on, pay first before you get your cheesburgers.
so if you can find a roofer, to put his/her money out there, to do your roof and then try to get his/her money back after its done, go for it.
for me, its not 1940 anymore and no one can be trusted.
just like people pay 20,000 for a car without knowin if it will last a year, people will pay me for there roof the same way.
i think roofers have to realize that somethin can happen to the h/o halfway thru the job which can keep you from gettin paid.
i can no more allow this to happen.
so again if theres someone out there that is willin to finance your roof then hire them, you have nothin to loose.
I’ve been in business for 14 years, I started out asking for nothing down and all at completion. Throughout the years we started getting alittle down and now we ask for 50% down for any jobs over $1000. Nomatter who the customer is, we ask for 50% down. If they don’t want to pay, we don’t do the job, thats policy.
One thing we have found is that asking for the 50% down, we, at completion get our money faster. Asking the customers through the years, they say say we get paid faster because they need the money before they start the project and they aren’t trying to get it all together after the job is done.
We are keeping with this policy, we have lost very few customers because of it. And actually, if a customer decides not to go with us becasue of it, the next customer is more happy with us because we get to their job quicker.
BTW, I have no accounts with any supplier, I pay cash for everything.
My original question was whether it is unusual for a roofing contractor to charge 50% upfront? This question was overwhelmingly answered by all of you. It is not unusual, and in fact it seems as if that is standard practice, at least for those who responded to this thread. That’s all I really wanted to know, and I am very grateful for this information.
As far as asking why I don’t just go with the contractor referred to me by my relatives, the answer is that I certainly did not rule him out. It is not a question of money. As it ended up he was even a few hundred dollars cheaper then the one who wanted 50% up front. So obviously I pursued this issue with the second contractor not because of any cost savings, on the contrary he was more expensive, but his presentation and approach impressed me. I felt more comfortable discussing roof issues with him then with the others. This is strictly a gut feeling, but sometimes there isn’t much more to go on.
Again I want to thank all of you for your responses and have a MERRY CHRISTMAS and HAPPY HOLIDAYS!!!
hahaha thats an awesome analogoy :P…made me laugh
Make sure your contractor is who he says he is!
A professional looking paper does not mean much by itself, you have to research your contractor to make sure that he has a good track record. You could call some of his past customers to make sure they are happy with the work. You can also call BBB to make sure that everything is O.K
See if he has insurance, is he registered with the state, things like that.
If he is legit and has a good track record then, you might be O.K, but remember it is silly to relly on piece of paper because it looks professional…
as for my self, we usually get 33% to start (covers the cost of the materials) 33% half way through, 33% upon completion.
Thank you for your advice. Before I asked the Contractors for a quote, I checked them out with both the BBB and the Contractors State License Board. I did check on their insurance status. I also did an internet search to see if there are any reviews from homeowners for whom these contractors did work in the past. The ones I selected do seem to have a good track record.