One of the reasons I love Angie’s List is that I can get a wealth of information on the site. The site has a lot of articles and information that I can refer to as a resource whenever I have some questions on matters pertaining to maintenance of our house. For example this summer, I am thinking of having our garage repainted. While doing some research on painters, it just occurred to me to check on how should I pay contractors.
I did a search on Angie’s List regarding how much I should pay a contractor upfront and sure enough came across a couple of great articles on the site. In fact, some other member of the site had asked the people at Angie’s List on how much should a homeowner expect to pay a contractor when asked for a down payment.
According to Angie’s List, when paying a contractor, you should be careful on how much to pay upfront. They suggest that you should never pay the full costs up front. They suggest that a down payment should however be reasonable to both parties concerned. According to an Angie’s List poll of contractors:
“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.”
What Angie’s List refers to as milestones are certain steps in the process of completing a job. For example, if you are having your driveway repaved, you could offer the contractor three equal payments: (1) upfront payment for the purchase and delivery of materials; (2) a second payment after the concrete is poured; and (3) a final payment once the concrete has cured and when you are finally satisfied with the completed job. Related Read: Save money with an Angie’s List promo code
Angie’s List stresses that you should not pay anything until after you have a completed contract that spells out the payment structure for the job.
“Be sure the details of your project – including payment terms – are spelled out in a contract signed by both you and the contractor. Keep in mind that, by law, your contractor must allow you three business days to void the contract, should you change your mind.”
Also as an insurance, they suggest to hold back 10% until the job is complete to your satisfaction.
One more thing to note during the negotiation of terms of a contract, if a contractor is not flexible with establishing a reasonable payment schedule and terms before even starting the project, then take this as a warning sign that the contractor could potentially be difficult to work in the event that other issues arise while the project is being completed.
Do you agree with Angie’s List suggestions for payment terms? Do you have other ideas regarding how to handle contractor payments. Feel free to share your thoughts.
Yo made a good point on a contracrtor that’s unwilling to negotiate the terms of contract. That could be a red flag. The good thing about Angie’s List is that we can always check out the reviews of the contractor’s past clients.
These are great recommendations for payment schemes. I’m definitely taking note of everything. Thanks for sharing.
With Angie’s List, I have a good idea as to what the standard rates are. I won’t be fooled or scammed in any way.
Oh I do agree that we shouldn’t be paying 100% upfront. The contractor has to fully deliver first to get the whole payment. As to the breakdown of payment, I think breaking it up into milestones is also a great idea.
Although I’ve saved enough for our annual home repair project, I want to be careful. I think it’s right that I pay after each milestone has been met. Sure, I can give a down payment but I want to make sure each task is delivered well and on time.
Drawing up a contract does not guarantee everything. Surely, there will still be some challenges. That’s the reason why angie’s list has a dependable resolution team.
Noted. This is one of the best tips I’ve ever gotten. There’s no way, I’m paying full amount at the start of the project.
The worse thing that can happen in the middle of a home improvement project is to have some issues with the contractor. That’s what I want to avoid. I just want the home project delivered on time. Such is the reason why I signed up. As a member, I’m also looking forward to reading a lot of great articles.
I agree with you about the articles on angie’s list. They’re very useful. The information I pick up always comes in handy
Great recommendation you have here 🙂 I’ll definitely take your word for it.
I wasn’t aware of the fact that by law, I still have three days to agree with the contract. I’ve always thought that once the contract was drawn up, that was it. That’s really good to know. Thanks.
The contractor I found on angieslist actually took care of everything. Soon as we agreed on all the terms, he was the one that handed me the contract that said everything we had agreed on. I thought that was very professional of him.
It’s hard to talk money matters. So I make sure the figures are all clear on the contract. That and the exact date of completion. Once everything is on paper, there’s no need to talk anymore.
So it’s 10% that I need to hold back on, right? I am about to embark on a new project and I have already chosen a contractor. I am drawing up a contract and making clear that all the terms of payment are crystal clear. Thanks for the tip, Frankie:)
A written contract is more binding than a verbal one. I always make sure to start the project with a contract. I list down everything on the contract so that everything is crystal clear between me and the contractor. It has worked so far for me.
Yes, this is really a good and professional way to pay contractors. Having a contract can ease all the burden of having to repeat everything that was agreed on. It’s really a good way to document the whole project.
Setting the conditions and the numbers right at the start of the project is not an easy task. That’s why I never start any project without finalizing anything. Having a contract is the only way to set things straight. It’s good for both parties.
It’s hard to have a verbal agreement with a contractor. Nothing is followed and at the end it ends up to be a “he said, she said” issue. Having a contract that covers the payment terms is the best way to go about a project.
You know what, the information on your article is very handy at the moment. I am on the lookout for an electrician that could check the electrical wiring at home. We just moved into a new house and I want to be sure of everything. Once I’ve found the right electrician, I will create a contract. Thanks for the tip.
Maintaining an old house isn’t easy at all. I need to always call on some kind home improvement contractor to do some repairs or even some replacements. It can get quite costly. The best way to lessen the cost is by joining AL.
Once, I hired an interior decorator that did a great job. This was before I was a member of Angie’s List. The interior decorator did a great job. I was in awe of her work. But I was also in shock. My bill (from her professional fee and materials) ballooned to an amount I couldn’t afford. I had to borrow some money from the bank just to pay her. It was a nightmare.
This is good recommendation. I’m planning to hire a house painter and I’m going to follow your recommendation. I think it’s the best way to get what I want from a service provider.
I now have a good idea on how to go about paying the next contractor I hire. I had a hard time the last time because I didn’t write down the terms. I ended up paying more.
You’re absolutely right! With a contract, the delivery time is clear and the figures have both been agreed on. It’s very important to have all these listed down and agreed upon.
Nothing beats a contract. Putting an agreement into writing will lessen the stress and the misunderstanding.
My home projects are usually on a small scale. I pay 50% upfront and another 50% when the job is completed. Usually, the service provider issues some kind of receipt to acknowledge the 50% down. Moving forward, I should also draft some kind of agreement. Thanks for the idea.
Now I know what to do when I hire a contractor for my next home improvement project. It’s really a good idea to document everything before the project starts. That just makes so much sense.
I’m not that good with money matters. I would just rather pay and get it over with rather than ask questions. I mean, I can hire contractor and just pay all the charges without even asking why. But after reading your article, I realized that I should put everything into writing. This way, I don’t have to talk about money matters. At the same time, I can be upfront with the charges. Also, there won’t be any additional charges.
That would be scary… our neighbor did that, trusting the contractor was not overcharging until the bill came due…. and lots of work was done, with padded costs, talk about nightmare.
Talk about the costs in advance is part of the process, not offensive, just being clear…
Do not sign a contract if you do not know the costs!
This is the reason why I like to read the reviews. I get to find out which contractors can deliver on time. By knowing that kind of information, I can pretty much gauge as which contractor to hire.
This is a good tip. Getting all the numbers and terms finalized at the start will not lead to any additional cost. Determining a realistic timeline will also protect both the contractor and the homeowner.
I never even realized that I should draw up a contract. But it does make sense. This should put all our expectations into place. So whether it’s a big or small project, I should have a contract ready.
This is a great and useful article. Thanks for sharing it. I usually go through the articles on angie’s list but I missed this. Thanks for reinforcing it. Looking forward to more articles from you.
Angie’s List not only provides useful reviews for us consumers. It also provides great tips through their articles. I never considered how important it was to draw up the payment plans before implementing the home improvement project. Thanks for pointing that out.
These are great suggestions. I’ll definitely take note of each one.
The guessing game is over with Angie’s List. I can pay the standard amount.
As a member of Angie’s List, I can have a better idea as to who are the top caliber service providers in my area.
These are great payment terms. They’re fair enough for me.