How do builder payment stages work?

People tend to ask about payment stages. For us as a contractor, we build your house with your money, because at the end of the day, it’s your house.

So if we’ve got an agreed price, for instance, so you’ve given us drawings and engineering and all the rest of the bits and pieces that we need to be able to price a job, [inaudible] the price, you’re happy with the price, it meets your budget, but we’re not starting to build for another three, six months, a year, I don’t know, whichever that time frame is. We would take a slot holding deposit, which would be 5%, which secures your slot in that time frame, that timeline, which then puts a little bit of skin in the game for both of us. We’re securing a timeline, you’re putting money in to secure that timeline.

And then, prior to starting, we would take an extra 15%, which would be probably about two weeks before we start. So we’ve got a 20% deposit. In that deposit then, we then secure, if we need toilets and materials and skips, all that, the whole site set up, prelims and management, the structure, drawings in, getting stuff printed off, all that, materials on site.

And then we would work then, probably for the first two or three weeks, there wouldn’t be any charges, no extra charges. We’d agree the next stage, whichever that would be, maybe on completion of foundations, we would then invoice another 20%, or whatever stage payments we agree for that particular project, because that may be a bit more demanding, or there may be a bit longer, who knows? But stage payments would be set up.