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Method of Payment. The way one pays for a transaction. The three most basic methods of payment are cash, credit, and payment-in-kind (or bartering). These three methods are used in basic transactions. For example, one may pay for a candy bar with cash, a credit card or, theoretically, even by trading another candy bar.
Paying a contractor cash. The Federal Trade Commission claims that a contractor who only offers the option of paying in cash is usually not as reputable as one who has other payment options available. Check. Credit card. Debit card.
First and obviously, your contractor shouldn't ask for an unreasonable sum of money up front. Yes, he needs money to get the project started, but asking for more than 15 percent raises a red flag, and most states allow contractors to ask for a maximum of 33 percent of the total cost up front [source: Chicago Tribune].
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.
Yes, he needs money to get the project started, but asking for more than 15 percent raises a red flag, and most states allow contractors to ask for a maximum of 33 percent of the total cost up front [source: Chicago Tribune]. Your contractor should have enough credit to pay the rest of the up-front costs.
6 Answers from Builder Extension Builders In answer to your question about money up front you should be paying no more than 10% up front and then only when initial materials arrive at site.
General contractors get paid by taking a percentage of the overall cost of the completed project. Some will charge a flat fee, but in most cases, a general contractor will charge between 10 and 20 percent of the total cost of the job. This includes the cost of all materials, permits and subcontractors.
Payment Schedule In Your Contract It shouldn't be more than 10-20 percent of the total cost of the job. Homeowners should never pay a contractor more than 10-20% before they've even stepped foot in their home.
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