Verify Funds to Get Paid


How do you verify the homeowner has sufficient funds for the project? According to the California contractors board you’re supposed to do a credit check. I doubt many roofers are doing that. I was thinking of splitting the payments up into 4 parts; A deposit 10%/$1000, 1/3rd when the roof gets ripped, 1/3rd when the materials are delivered, 1/3rd when complete. I figure that way I can’t loose too much money. Any thoughts?


We do 1/3 upfront for material and to get scheduled, 1/3 half way, 1/3 final.


We generally require 50% deposit or at least, at delivery of materials. Just walked away from a $28K roofing job because there was a special order shingle involved and the homeowner refused to place a deposit. It isn’t a cash flow issue in the last, it’s a business sense issue. People can check us out rather thoroughly, why would a homeowner automatically be more trustworthy than a very reputable contractor? If someone doesn’t have 50% to pay me today, why should I believe they’ll have twice that in a couple of weeks?


Thanks MPA and A_D. In California I can only take 10% or $1000 down. I suppose I could do 10% to schedule, 1/3 with delivery, 1/3 halfway and 1/3 on completion. I’ve seen other local contracts like that. The exact wording was “3 equal payments” but didn’t say when, I think that’s too vague.

What do you guys do when the homeowner doesn’t have a check handy when it’s time? Thanks.


We occasionally take deposits on credit cards if they don’t have a check handy or need to get financing organized. If they want to put anything other than a deposit on a credit card it usually means they can’t afford the work, and you are only asking for problems. As AD said If you have problems getting a deposit it is often better to just walk away.


Give them a week or two, then they get a call from me. If that doesn’t work, then file a lien and begin the collection process. Part of it is properly setting expectations when the sale is made. Make it explicitly clear you expect to get paid the day the roof is completed. If there are punch list items, make it clear you expect 75 or 90% and they can hold the rest back pending punch list completion. Some people will purposefully come up with nitpicky bullshit punch list items to delay payment. You need to knock that leg out from under them prior to the sale.


A better way is to ask for 50% down when you sign the contract and then the other 50% upon completion. That’s what we do on every job. It’s a good way to get people to commit to being on your schedule.