Is 50 Percent Up Front Normal?

You are standing in your kitchen holding a proposal for a bathroom remodel, and the payment line says half now, half at completion. Nothing about that is unusual. Half up front is common in residential construction, common enough that a contractor asking for it is not telling you anything about himself one way or the other. Some ask for a third. Some ask for less and bill in stages. Half is inside the normal range.

A deposit on a service job is not a fee. The money is doing work: it buys material, it takes the dates off the contractor's calendar, and it covers the part of the job that happens before anything shows up on your property. A contractor who orders your tile in week one has spent real money on a house he has no other claim to.

The size of the deposit is the wrong thing to look at first. What matters is what the payments after it are attached to. Fifty percent against a written milestone is a different arrangement than fifty percent against a start date, even though the check is identical. The first one tells you what has to be true before more money moves. The second one tells you nothing.

The version of this that goes wrong is not always the one where the contractor is a crook. It is the one where he is not, which is worse, because a crook shows himself early and a good contractor who ran out of money on your job looks exactly like a man who is still working.

Read the payment schedule before you read the price. A schedule with money attached to finished work reads like this: a deposit at signing for materials, a payment when demo and rough-in are done and inspected, a payment at tile and fixtures, the balance at punch list. A schedule with money attached to the calendar reads like this: half now, half in three weeks. The number I would ask about is not the fifty. It is what the second payment is waiting on.

There is a version of a service agreement where the scope of the work and the money for the work are the same object. The customer funds the contract before work begins. The money is held until each milestone is complete, and that portion releases to the provider. The payment schedule stops being a second document sitting next to the plan, and what changes for the homeowner is which page he is looking at when a question comes up in week three.

Rules about deposits and advance payments vary by state, and some states regulate them directly. This article is about what people commonly do, not about what any law requires. For what a specific state's rules actually say, see the deposit guides in the knowledge base, or go straight to the California guide if that is where the work is happening.

Half up front is a normal number. It is also the least informative thing on the page. The document in your hand already tells you how much you are about to pay today. What decides how this job goes is whether it also tells you what has to be finished before you pay again.