Should You Pay A Contractor Money Up Front

Q: I’m hiring someone to do some work on my house. He told me how much it was going to cost and asked me to pay the money upfront. How do I know he won’t just walk away and not do the work? Shelly, Kearny, NJ

A: If you can avoid paying any money upfront for work that is to be done on your home you should. Ideally, it’s best to keep a contractor’s work ahead of your payments–this way, you limit the ability of the contractor to take off with your money without completing the work you paid them to do. In fairness, the contractor also wants to make sure that he or she gets paid for the work that they do–so it requires some give and take. As a rule, I like to make small payments to contractors as they complete mutually agreed upon milestones. I also try to only work with contractors who have trade lines, which are credit lines that allow them to buy their own supplies and materials for the work they are going to do. You should consider buying required materials yourself if that’s possible to reduce the temptation for contractors to pad their fees with extra materials costs.

Whenever you hire a contractor, you should always request a detailed estimate of the work that will be done with the price of labor and materials separated. Any contractor that doesn’t have time to give you a detailed estimate is someone you should not choose to do business with. Do your own research about the work you need done BEFORE you ever start contacting contractors. The more you know, the easier it will be to compare and contrast different contractors and you will signal to contractors that you interact with that you’re not a pushover that they can take advantage of. You will likely have to speak with several contractors before you find one that you’re comfortable working with.

In my view, the person who is paying the money should have the final say, so if a contractor wants more money than you feel comfortable paying, you should move on to the next contractor. Thanks for your question, Shelly.

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