How to Pay a Contractor in a Fixer Upper?

[Robert Villanueva]

Wondering what is the best way to pay a contractor in Texas? I know for sure you NEVER pay all up front but what are some common percentages now and days or form of payments. Also, what are these contractors charging? Can anyone give me an estimate on what contractor charge in a single family home which requires 80k of repair work?  Gracias!

[Chad Clanton]

@Robert Villanueva, I can't help you with costs, scope of work, etc, but as to payment, there are a few guidelines that I use. Little to no money up front, depending on the contractor and your way of doing things. Set itemized scope of work and associated payment benchmarks up front, and stay on top of it! Start paying for work not yet done (with the possible exception of a small percentage up front) and you'll likely end up pretty unhappy about it. I dealt with San Antonio PD's white collar unit on a fraud case once and they wouldn't touch it without an itemized list of what was supposed to be done vs what wasn't done, I'm thinking Houston might be the same. 

As to "retail contractors", i.e. solidly branded, advertised, etc, 50% up front and 50% on the back end is pretty customary. Whether you want to deal with those terms is of course up to you; personally, I've done so regarding smaller portions of the rehab (some windows, granite, cabinets, things of that nature). As always, check credentials which may exist, etc. Vet your contractors, especially here in Texas.

I'm a fan of paying with credit card, as some cards have some protections against fraud and the like. Any time you use cash or check, it's pretty much gone, plus you're sharing your bank account number when you use a check. Most of the time that's not an issue, but you'd be amazed some of the stuff people pull. Plus, for me at least, someone taking a credit card tells me they're making an effort to stay up with technology and are ok with the electronic trail that creates. Paper disappears way too easily for my taste. If you'd like to talk it over or want some help you can shoot me a PM or give me a call; best of luck and invest smart!