What is a Reasonable Down Payment for a Contractor?

Many contractors are willing to work with homeowners to establish payment schedules or negotiate down payment terms.

Many contractors are willing to work with homeowners to establish payment schedules or negotiate down payment terms.

Dear Angie: I have a contractor set to replace my concrete. However, the contractor wants 90 percent of the agreed-to price up front before any concrete is poured, which I am reluctant to agree to. Do you recommend a schedule of payment? – Paul S., Littleton, Colo.

Dear Paul: It’s not uncommon for contractors to ask for a down payment up front to secure your spot on their schedule or purchase some of the job materials in advance.

Asking for more than half of the project cost up front, though, is a big red flag. A reputable and established contractor should have the wherewithal to purchase enough materials to get the job started without relying on your down payment.

I recommend tying payments to progress made during the job. More than half of contractors who responded to a nationwide Angie’s List poll said they require down payments. Of those, though, 75 percent said they are willing to negotiate on down payment terms. Many also said they are willing to work with homeowners to establish payment schedules as certain milestones are met on the job. For example, you could offer the contractor three equal payments; one for delivery of materials, another when the concrete is poured and a final payment once the concrete has cured and you are satisfied with its appearance and performance.

If the contractor isn’t flexible about establishing reasonable payment terms before even starting the project, it could be a warning signal that the contractor could be difficult to work with if other issues arise during the project. A rational contractor should understand that a homeowner shouldn’t have to pay for the job before it’s done, just as the contractor wouldn’t expect to wait to get any money after the job was done.

There are certainly exceptions to this rule of thumb; for example, if the project requires special materials that the contractor must order in advance. However, with what appears to be a routine concrete job, I don’t see that being the case. I propose you discuss your concerns with your contractor. If he or she can’t offer a reasonable explanation for the high down payment requirement and is not willing to adjust that requirement, I recommend finding another contractor. 

Angie’s List collects about 65,000 consumer reviews each month covering more than 550 home and health services. Angie Hicks compiles the best advice from the most highly rated service pros on Angie’s List to answer your questions. Ask Angie your question at askangie@angieslist.com.


As an architect with thirty years experience, I recommend against down payments in general, Set up a contract with regular payment schedule with payment for work completed and in place (biweekly or monthly) and pay promptly. In some cases prepayment for expensive long lead items may be justified, but make sure you are protected with insurance by the contractor. A retainage of 5 to 10% of each payment withheld until the final payment gives you further protection that the job moves along and that the contractor finishes the job to your satisfaction. This is common practice for larger projects and should not come as a surprise to a reputable contractor. Also, if a contractor cannot carry a project for two to four weeks without being paid up front, I would have serious questions about his financial stability.

In california, the law states, I cannot ask for more then 10 percent down. Tie all payments to on site deliveries, work done, and progress, laid out in plain english in your contract. The contractor is also obligated to supply you with several documents, such as a copy of his bond, licence, and the intent to lien, which must be given to the customer at signing. If he has workers, you want to see his insurance and workers comp. Policy. If not, and one of his workers hurts himself on your home project, you could end up being responsible for his injury. Know your rights, go to your states contractor licencing board, for a complete list of items, you, and the contractor must do at signing. Do your home work. Perry

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