Most Commented

Advertising

Subscribe

  • Subscribe

3 Standard Payment Modes for Remodeling Contractors Basing on Project Types

Posted by | April 28, 2010 .

Payment modes for remodeling contractors vary depending on the project types. Here are the different project types with their corresponding required payment schemes: small repair or maintenance project; custom-made project; and, big renovation project.

The mode of payment as required by a remodeling contractor is a common concern for homeowners who are planning to undergo a renovation project. In fact, it is something that one should greatly consider as part of the priority concerns. In order to allocate a sufficient budget for your remodeling project, one should identify which type of project you are going to have to distinguish the payment mode:

Small repair or maintenance project

An example of a small project would be an electrical or plumbing repair. Project types that would last only for a day are considered as small maintenance or small repair projects. In fact, some projects of this type would barely last a day to be completed. Another set of examples would be fixing the windows, repairing doors, and mending the fence. The payment is right after the completion of the entire repair project, usually at the end of the day. It should be emphasized that the project completion should be a successful one. The fee is either on a per hour charging basis or it can also be a fixed charge for the whole project. Down payments are not necessary since the the contractor can afford to pay for the supplies needed in doing the repair or maintenance.

Custom-made project

This is a tailored project type wherein the products or the services are specially done to suit a specific requirement of the homeowner. Custom-made kitchens, bathrooms, cabinets, shelves and counter tops belong under this project category. Even a tailored painting would be part of this project type. Since, the home renovation is a custom-made one, then it follows that the materials are uniquely ordered and made to perfectly work well for the said project. With that, a certain amount of down payment is required to pay for the customized materials. A custom-made cabinet for a tailored bathroom or kitchen would need between 30% to 5o% down payment as required by a cabinet manufacturer. While the balance should be paid upon the delivery of the cabinets. So, with this set-up it is advisable that the contractor and the homeowner should be able to discuss a definite payment plan that ensures enough funds for the whole project. It is basically the responsibility of the homeowner to provide the funds for ordering necessary custom materials without the burden upon the contractor’s back. Including the full payment for the ordered materials upon the delivery to the job site. Moreover, payment must be made also to the contractor upon the installation of every custom work. This is proportionate to every installed or finished work that forms part of the entire remodeling project. However, the full payment to the contractor should be made only when the full contract has been satisfied.

Big renovation project

A large project should have a draw schedule that must be very detailed. The homeowner should pay these draws, also known as ‘progress payments’, every time a particular project phase is completed. A written agreement should clearly define the project phases involved and the corresponding payment percentage to be paid to the contractor for every phase completion. Usually, a 10% deposit is paid to the contractor before the project starts.

When scouting for remodeling contractors, look for the one that is very transparent with his contract price. Look for someone who is willing to discuss in detail every aspect concerning the whole renovation project. A competent contractor with a reasonable contract fee is definitely what you deserve.

Incoming search terms for the article:

Related posts:

  1. 4 Types of Electronic Payment Transactions for a More Profitable Small E-Business
  2. 3 Basic Types of Auto Insurance Coverage
  3. 4 Coverage Types of a Long Term Care Insurance Policy
Tags: , , , , , , , , , , , , , , , , , , ,
Posted under Cash Flow, Finance, Money | 31 Comments Like this article? Subscribe to our RSS feed