How Much of a Deposit Should a Contractor Ask For?

How Much of a Deposit Should a Contractor Ask For?

This is one of the most common questions homeowners have — and getting it wrong is one of the most common ways people lose money to bad contractors.

The Standard Range

Normal deposit: 10–30% of total project cost

This is the industry norm for residential work. The deposit should:

Cover early material purchases

Reserve your spot on the contractor's schedule

NOT represent more than they'll spend before first work begins

Why Deposits Over 30% Are a Red Flag

A contractor asking for 50% upfront — before any work begins — has one of two problems:

Cash flow problem: they need your money to operate, which means they may not finish your job before running out of money

Intent problem: they take deposits and don't complete work (the most common contractor scam)

Neither is acceptable.

Payment Schedules by Project Type

Roofing (typical):

10–15% at signing

30% at material delivery

Balance at completion

Kitchen/Bath remodel (typical):

20–30% at contract signing

20–30% at framing/rough-in completion

20–30% at drywall/finish stage

Balance at completion

HVAC replacement (typical):

0–20% at signing (some HVAC companies require 0 upfront, balance at completion)

Balance at installation completion

What to Do if a Contractor Demands More

If a contractor demands 50%+ upfront:

Ask why — legitimate reasons exist (custom material order requiring payment)

Offer to pay the material cost directly to the supplier if that's the concern

If they insist, consider other contractors

Protect Yourself: Tie Payments to Milestones

Write payment milestones into the contract explicitly. "30% at rough-in complete" means you control whether rough-in is actually complete before writing the check.

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