16 Comments

  1. I’ve had contractors do work without full payment up-front: e.g. half up-front, half when the work is done.

  2. WW: I’ve never had contractors do work WITH full payment up front. That would be…dumb, in my book. When we had siding/roof done a few years ago, they made enough mistakes that at one point they called for the rest of the money and I told them to try again when they’d finished the job. Surprise, that got it done Real Soon Then.

    Anyone else remember the ad (don’t remember the product) where the contractor says, “Here’s how it’s gonna work. I’ll come in next week, rip everything out. Then I’ll disappear for six weeks. Don’t bother calling; I won’t answer…” — That’s my nightmare scenario, heard it from too many folks; they get as little up front as I can get away with!

  3. Hehe. I love how everybody seems to remember the set-ups to commercials instead of what they were advertising. I think I remember the advertising campaign the above-mentioned commercial came from, but I couldn’t name the product either.

  4. The DIY show, Holmes Makes it Right, covers why you never, ever, pay in full to a contractor. If you got a bad one, he’ll never show up after receiving the payment.

  5. In my insurance adjusting days, I’d send contractors on jobs without paying them anything up front. Of course, I was working for a huge insurance company and we had contracts with various contracting firms. But I could usually send ones that weren’t on contract (as happened in small towns) and still didn’t need to pay anything. They knew we were good for the money and the ones on contract were getting huge amounts out business out of us. Sometimes, if they had to bring in subcontractors to do work that required the purchase of significant amounts of materials (for example, a bricklayer who needed $25,000 for bricks), I’d pay half up front so they could get the materials and start the job. Otherwise, the contractor would be expected to carry the cost until it was time to bill.

    The exception to this was for the emergency work. For example, if a werewolf statue fell on the patio, destroying it and damaging the house, I’d send guys to clean it up and make it a safe and secure site, take measurements and draw up an estimate. They could bill me for that and I’d pay it even before anything else was done.

    Now, with all that said, even though I held the purse strings and these contracts could be worth millions every year to the larger companies, there were still sometimes issues with the reliability of the contractors and unreasonable delays. I had the resources to lean on them, including kicking it upstairs. So, NEVER pay 100% in advance. Because if I couldn’t get completely reliable work on time with the clout I had, Joe Shmo homeowner never will.

  6. I kind of liked the way the contractor was chipping away at the 4th wall until the “becoming good friends” line which is usually a cue to play the beer jingle in the commercial.

  7. The challenge for contractors generally is that of scheduling… ideally, they’d like a day’s worth of work every day, but nothing guarantees them any such thing. Sometimes nobody needs work done or there’s only a little bit; employees either stand around, stay home, or work on cleaning up the warehouse, none of which generates any revenue. Other times, they have many times the number of projects more than they can actually do. The person negotiating the contract doesn’t always know what the availability of resources to fulfill the contract are. They’ll promise a deadline, and then it turns out that the resources are already committed to other projects. This means that some projects wait, or get done by subs that aren’t the regular crews.

  8. @SingaporeBill: Why does ” if a werewolf statue fell on the patio” have that ring of versimilutude? Tell the rest of the story: who has werewolf statues overlooking their patio?!

  9. Phil Smith III: Sally Forth did. That’s why they needed this contractor.

  10. A couple of years ago I hired The Contractor From Hell, and paid half up front. He dug the hole as agreed, but only came back to ask for more money. I finally shouted at him, YOU”LL GET PAID WHEN YOU FINISH THE JOB and voila! it was done. Badly, but done. I paid him off because I thought if he came around one more time I’d kill him.

    I settled for leaving bad reviews for him everywhere I could find.

  11. We had a tiling contractor that worked on our master bathroom and was doing a pretty good job. Suddenly he just stopped showing up and did not return our phone calls. Fortunately it was a labor-only job (we had previously purchased the tile and grout) so I bought some tools and found out I could finish the job myself. Flash forward a week or so and I get a call from the contractor about 10:00 pm on a Friday night promising me that if I could pay is bar bill (and take him home), he would finish the rest f the job for free. Needless to say, he had to find another way to pay his tab.

  12. When we had new siding, new windows, new side door, new gutters, new roof done we had to pay 1/3 down, 1/3 when they started and 1/3 when they finished – and I had to leave Robert home with them and go to the bank and get a bank check to pay them the final payment (they would have taken cash I am sure, but I wouldn’t pay then cash).

    All of the consumer fraud things say not to pay in full before the work is done. Many people, even not had paid in full, have been ripped off by contractors and are still waiting for work to be finished from Hurricane Sandy.

  13. Back when we used to do IT work for people (mostly building web pages), we would try to get the 1/3, 1/3, 1/3 deal whenever we could — it’s to the contractor’s benefit, because we now have 2/3s of the pay without having done anything yet, as opposed to only half. If things go south, we have 2/3 in the bank, and the amount left to bargain with is just 1/3. And you know we’re pricing things such that if the customer flakes, we have at least our costs covered with 2/3 the agreed-to price, so no matter what happens with the job, we’re not losing out.

    So now of course, if I’m hiring the contractor, I will not agree to 3rds if I can help it; I’d much rather keep half to incentivize them to actually finish, rather than just a third.

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