Contractor deposit

[Anonymous]

We're planning to hire a contractor to do some structural repairs to our home. The company is licensed and insured and has asked for a 50% deposit ($5000) in advance just to get placed on the schedule for the fall. Is that standard? We've never had that request and though all of the references have checked out, I'm just wondering if it is typical to give that much of a deposit just to get in the queue for work?

[Anonymous]

No, that sounds like a company that is in trouble and needs the cash to stay afloat. Our contractors have either not required a deposit or have asked only for 10 percent at the beginning (and that was for a massive renovation). Ask them why they need so much. That sounds like a red flag to me.

[Anonymous]

I've seen the same with local contractors and decided to walk away because of it. A 50% deposit is illegal in some states.

[Anonymous]

No should not be more than 10%

[Anonymous]

I'm a contractor and I don't take deposits on any job under $10,000 – I don't want anyone else's money in my bank account. Something doesn't seem right for them to need that much of a deposit yet still have a two to three month backlog.

On jobs over $10k or if I get a funny feeling from someone I'll ask for a one third deposit on the day we start work and the balance to be paid on the day we finish.

I would be very reluctant to give that much money upfront for work that into the store for a few months, perhaps you could put it on your credit card and then back charge them if there's a problem. Your credit card offers way more buyer protection than a regular check.

[Anonymous]

You sure you want to go with this guy?

[Anonymous]

This is all very helpful feedback. He seems reputable--but this doesn't sit right with us either. Thank you!