My contractor asked for a 33% deposit—is this normal?
Providing deposits for contractors is a crucial—and normal—step in starting a renovation
Short answer: Yes. But there are exceptions, and your contractor may have some flexibility. Below, Sweeten outlines the reasons behind upfront payment amounts, and some options for negotiating your deposit for a contractor.
Why do contractors require a deposit?
Deposits for contractors are critical because they essentially allow your project to begin! Your general contractor needs to secure a crew and begin ordering materials right away. They may also need to rent equipment. And your contractor can’t take on all the financial liability for these commitments themself.
How much of a deposit can a contractor ask for?
The exact deposit amount contractors ask for upfront varies and is especially dependent on the size of the project. For relatively small jobs, like a $16,000 bathroom remodel, contractors may ask for a 50% deposit. For large jobs, like a $100,000 full-home renovation, a 10%–20% deposit is more typical.
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Is the deposit for a contractor negotiable?
It might be. In many cases, contractors start with a standardized contract, so some of the terms could be based on a typical job rather than the specifics of yours. You may be able to ask for somewhat lower initial payment or deposit.
The ideal time to ask is during negotiations (—an important part of the contractor hiring process), before the contractor drafts the contract. But they may be amenable to a minor contract alteration after the fact. Just know that their flexibility may be limited.
What about the remaining payments?
General contractors use a number of different fee structures. The payment schedule might be based on fixed dates, or on major project milestones. For small jobs, they’ll typically ask for just two payments—one upfront, the other at the end. For larger projects, there may be as many as five scheduled payments.
Most contractors ask for the final payment upon “substantial completion.” This means that everything’s complete except the punch list*, and possibly final work on minor finishes. Occasionally, a contractor will consider a job substantially complete when there’s a single large outstanding item—like an expensive fixture that’s held up by a shipping delay, but which won’t require much labor to install. When you’re ready to begin your home remodel, work with Sweeten to find a vetted and experienced contractor.
*The punch list is a tally of any minor problems for the contractor to fix—like a paint splatter, a missing drawer pull, a misaligned cabinet hinge, etc.
Points to remember for contractor deposits:
- Expect to pay a deposit for a contractor before work can begin
- Expect to pay a higher percentage on a smaller job, and vice-versa
- Discuss the contractors’ deposit and payment schedule before they draft the contract
- If you’d like to amend the contract, don’t expect the contractor to have unlimited flexibility
If you’re planning to start your own home renovation within the next 6 months, it’s time to post your project on Sweeten and start making your vision a reality!
How does Sweeten connect me with the best general contractors for my remodeling project?
Our purpose at Sweeten is to help homeowners transform their homes as seamlessly as possible — so you can stop living at home, and start thriving! And we’ve helped around 3,000 renovators do just that. Here are some of the ways we bring value to your renovation experience (for free!):
- We only work with thoroughly vetted, trusted general contractors
- We carefully select the best contractors for your unique remodeling projects and connect you with them
- You’ll get a set of competitive bids to ensure fair, market pricing for your project
- You can take advantage of a bid-leveling call with someone from our team to help you through the toughest part of the decision-making process
- Our team has extensive knowledge and experience in renovations, and we’re available to you for support from start to finish!
Updated July 28, 2023
Sweeten handpicks the best general contractors to match each project’s location, budget, scope, and style. Follow the blog, Sweeten Stories, for renovation ideas and inspiration and when you’re ready to renovate, start your renovation with Sweeten.