Before paying a contractor deposit, ask these questions
A deposit can cover legitimate scheduling and material costs, but the amount and purpose should be clear. State and local rules vary, so avoid one-size-fits-all percentages.
What does the deposit pay for?
Ask which materials will be ordered, whether they are identified in the estimate, and what part reserves labor or schedule.
When are later payments due?
Replace vague dates with visible milestones and define what counts as completion of each milestone.
What happens if materials change?
Ask how credits, upgrades, substitutions, delays, and restocking fees will be documented.
How is payment documented?
Keep the signed agreement, invoices, receipts, approved change orders, and a record of every payment method.
What are the local rules?
Deposit limits and contract requirements can vary. Confirm with the relevant state or local consumer, licensing, or building authority.
What remains for final completion?
Define the final inspection, punch list, cleanup, warranty documents, and any required releases before final payment.
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