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Paying Deposit to builder.

  • 20-05-2015 5:40pm
    #1
    AJB23
    Registered Users, Registered Users 2 Posts: 12 ✭


    I'm getting some work done on my house and wondering how much would be an appropriate up-front deposit to give? The total job will cost €33k. Would staged payments such as €3k up front, €8k when 25% complete, another €8k at 50% complete, another €8k at 75% complete and the balance on completion be acceptable? Should I look to reduce these figures and pay more on completion?

    The job is estimated to take 6-8 weeks and I presume our builder has a minimum of a 30 day credit line with his suppliers so I can't see a small deposit being an issue.

    Appreciate any advice on this!


Comments

  • #2
    Larry Bee
    Registered Users, Registered Users 2 Posts: 184 ✭✭Larry Bee


    We are midway through getting a job done on our house and our builder came up with a payment scheme of 5,000 when walls are done, 5,000 when roof is done right through to 5,000 paid when the dust settles down a bit and we are able to see the end result.
    No deposit asked for or given.

    Good luck with the work.

    John


  • #3
    sydthebeat
    Subscribers Posts: 42,170 ✭✭✭✭sydthebeat


    AJB23 wrote: »
    I'm getting some work done on my house and wondering how much would be an appropriate up-front deposit to give? The total job will cost €33k. Would staged payments such as €3k up front, €8k when 25% complete, another €8k at 50% complete, another €8k at 75% complete and the balance on completion be acceptable? Should I look to reduce these figures and pay more on completion?

    The job is estimated to take 6-8 weeks and I presume our builder has a minimum of a 30 day credit line with his suppliers so I can't see a small deposit being an issue.

    Appreciate any advice on this!

    for a job of €33k id give nothing up front.

    stage the payments onto something like 6 x €5k stages, agreed prior to commencement. If the builder cannot hold a €5k line of credit, id be seriously thinking about looking elsewhere.


  • #4
    Handsandtools
    Registered Users, Registered Users 2 Posts: 363 ✭✭Handsandtools


    First stage of building work costs more, with machinery and foundation building plus materials for walls, roof windows, doors. Once competent person signs off it's done and can be paid in full.
    But from my experience there's to many people who are not willing to pay and I will never start work without deposit to cover material costs for first stage!
    Most builders these days don't have spare 33k to invest in to Your property, they're not a bank and a lot of that budget is for materials, machinery hire and subcontracting other professionals like plumbers, electricians etc.
    So if You can find a rich builder who's willing to put his money into your project without interest, You are very lucky.


  • #5
    sydthebeat
    Subscribers Posts: 42,170 ✭✭✭✭sydthebeat


    there are many horror stories here, and some ive experienced, of builders getting money up front and it disappearing.

    if a builder cannot hold a €5k line of credit (about 15% of the project) then i would not be hiring them.


  • #6
    galwaytt
    Registered Users, Registered Users 2 Posts: 12,822 ✭✭✭✭galwaytt


    sydthebeat wrote: »
    ...if a builder cannot hold a €5k line of credit (about 15% of the project) then i would not be hiring them.

    ...by this logic then, should the client not be able to provide a bond to show the builder that he's good for the payment ??

    ...why would you expect anyone to work in advance without some payment ?

    10% is the absolute minimum for us too, and I won't start any work without it, and certainly no work onsite.

    Ode To The Motorist

    “And my existence, while grotesque and incomprehensible to you, generates funds to the exchequer. You don't want to acknowledge that as truth because, deep down in places you don't talk about at the Green Party, you want me on that road, you need me on that road. We use words like freedom, enjoyment, sport and community. We use these words as the backbone of a life spent instilling those values in our families and loved ones. You use them as a punch line. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the tax revenue and the very freedom to spend it that I provide, and then questions the manner in which I provide it. I would rather you just said "thank you" and went on your way. Otherwise I suggest you pick up a bus pass and get the ********* ********* off the road” 



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  • #7
    sydthebeat
    Subscribers Posts: 42,170 ✭✭✭✭sydthebeat


    i would certainly expect the client to be able to provide proof to the builder that funds are there, i wasnt suggesting otherwise.

    However what i am suggesting is that if a builder isnt able to hold €5k credit, be that either a line of credit with his suppliers, or a working business bank balance, then i would be very hesitant to engage the person. Its a sign of experience and professionalism.

    i appreciate in your business (TF construction) a deposit is required to place an order, because you are basically providing 'one' product... theres one business transaction in effect.

    and im sure in most cases youd be looking for a hell of a lot more than 10% before you being construction ;)


  • #8
    Handsandtools
    Registered Users, Registered Users 2 Posts: 363 ✭✭Handsandtools


    What about, if You have 4 projects running same time? No one throws money around these days!


  • #9
    sydthebeat
    Subscribers Posts: 42,170 ✭✭✭✭sydthebeat


    Handsandtools wrote: »
    What about, if You have 4 projects running same time? No one throws money around these days!

    if youve 4 jobs on at the same time, happy days, youve a constant income stream.

    if your STARTING 4 jobs at the same time and cannot finance them, go to your bank / credit union and theyd only be delighted to offer you working finance for at such a low risk


  • #10
    Handsandtools
    Registered Users, Registered Users 2 Posts: 363 ✭✭Handsandtools


    sydthebeat wrote: »
    if youve 4 jobs on at the same time, happy days, youve a constant income stream.

    if your STARTING 4 jobs at the same time and cannot finance them, go to your bank / credit union and theyd only be delighted to offer you working finance for at such a low risk

    Why will I go to credit union and pay interest on loan and not asking client to pay for job?


  • #11
    AlanG
    Registered Users, Registered Users 2 Posts: 1,436 ✭✭✭AlanG


    Most builders do not ask for any money until the first weeks work at least is done. As mentioned earlier if they cannot get credit go elsewhere. As fro those who ask "why should they" - its the same reason the builders will get 30 days credit off their suppliers.


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  • #12
    Handsandtools
    Registered Users, Registered Users 2 Posts: 363 ✭✭Handsandtools


    AlanG wrote: »
    Most builders do not ask for any money until the first weeks work at least is done. As mentioned earlier if they cannot get credit go elsewhere. As fro those who ask "why should they" - its the same reason the builders will get 30 days credit off their suppliers.

    Sometimes You can allow a week, but legit company won't start any work without deposit. I'm not talking cash jobs and small jobs, I'm talking legit building projects.
    Small builders won't get any 30 day credits off suppliers, but big company's won't start jobs without payment, to many poor costumers with big ambitions.


  • #13
    galwaytt
    Registered Users, Registered Users 2 Posts: 12,822 ✭✭✭✭galwaytt


    sydthebeat wrote: »
    ..if your STARTING 4 jobs at the same time and cannot finance them, go to your bank / credit union and theyd only be delighted to offer you working finance for at such a low risk

    Lol. Try 8%. And only IF they'll give it. Which, for construction is most unlikely.

    Case in point: deposit received from client on Tuesday. Bank will not release ANY money for his approved mortgage until house is roofed and weather proof. This is not unusual - can you carry 50k/whatever upfront ?

    Ode To The Motorist

    “And my existence, while grotesque and incomprehensible to you, generates funds to the exchequer. You don't want to acknowledge that as truth because, deep down in places you don't talk about at the Green Party, you want me on that road, you need me on that road. We use words like freedom, enjoyment, sport and community. We use these words as the backbone of a life spent instilling those values in our families and loved ones. You use them as a punch line. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the tax revenue and the very freedom to spend it that I provide, and then questions the manner in which I provide it. I would rather you just said "thank you" and went on your way. Otherwise I suggest you pick up a bus pass and get the ********* ********* off the road” 



  • #14
    galwaytt
    Registered Users, Registered Users 2 Posts: 12,822 ✭✭✭✭galwaytt


    AlanG wrote: »
    Most builders do not ask for any money until the first weeks work at least is done. As mentioned earlier if they cannot get credit go elsewhere. As fro those who ask "why should they" - its the same reason the builders will get 30 days credit off their suppliers.

    Fiction, frankly.

    We (fortuitously) have multilple jobs on, and I can tell you that not one of the contractors is working on them without money upfront. And I mean the general contractor, not 'us' as in the TF business.

    Ode To The Motorist

    “And my existence, while grotesque and incomprehensible to you, generates funds to the exchequer. You don't want to acknowledge that as truth because, deep down in places you don't talk about at the Green Party, you want me on that road, you need me on that road. We use words like freedom, enjoyment, sport and community. We use these words as the backbone of a life spent instilling those values in our families and loved ones. You use them as a punch line. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the tax revenue and the very freedom to spend it that I provide, and then questions the manner in which I provide it. I would rather you just said "thank you" and went on your way. Otherwise I suggest you pick up a bus pass and get the ********* ********* off the road” 



  • #15
    sydthebeat
    Subscribers Posts: 42,170 ✭✭✭✭sydthebeat


    galwaytt wrote: »
    Lol. Try 8%. And only IF they'll give it. Which, for construction is most unlikely.

    Case in point: deposit received from client on Tuesday. Bank will not release ANY money for his approved mortgage until house is roofed and weather proof. This is not unusual - can you carry 50k/whatever upfront ?

    all mortgages now require the clients deposit to be spent up front, the banks are insulating themselves from rogue builders and negative equity.

    its up to the clients and their professional to agree release schedule of funds from the bank.


  • #16
    galwaytt
    Registered Users, Registered Users 2 Posts: 12,822 ✭✭✭✭galwaytt


    sydthebeat wrote: »
    all mortgages now require the clients deposit to be spent up front, the banks are insulating themselves from rogue builders and negative equity.

    its up to the clients and their professional to agree release schedule of funds from the bank.

    Sure, but the deposit gets you nowhere near the roof level I've described above.

    Ode To The Motorist

    “And my existence, while grotesque and incomprehensible to you, generates funds to the exchequer. You don't want to acknowledge that as truth because, deep down in places you don't talk about at the Green Party, you want me on that road, you need me on that road. We use words like freedom, enjoyment, sport and community. We use these words as the backbone of a life spent instilling those values in our families and loved ones. You use them as a punch line. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the tax revenue and the very freedom to spend it that I provide, and then questions the manner in which I provide it. I would rather you just said "thank you" and went on your way. Otherwise I suggest you pick up a bus pass and get the ********* ********* off the road” 



  • #17
    scwazrh
    Registered Users, Registered Users 2 Posts: 2,797 ✭✭✭scwazrh


    Our company(general contracting business with 30k to 150k job values ) takes 5% deposit on acceptance of contracts .We have done this for the last 6 years. We've only had one customer refuse to pay the deposit so we declined the project.As I tell all our customers , we do not finance your project.


  • #18
    cork2
    Registered Users, Registered Users 2 Posts: 291 ✭✭cork2


    In our case (one off houses) we ask for 5% upfront. 4 weeks ago we dug and poured 4,700 sq ft of a bunglow, that's a big foot print and a lot of concrete in the foundation alone!! We have 4 more one off houses on the go too and have absolutely no problem getting credit for such projects. We can get credit because we refuse to fund peoples houses. Why should we?! We never asked for a penny upfront until about 5 years ago but if you get burned once or twice I'm afraid the nicey nicey approach goes out the window.
    Another issue I've recently had was with an architect in a high profile well known office in Cork. Our QS came out and site and did an account and submitted it for review by the architect in order to get a stage payment certified. I waited a week no word, a fortnight now word, then I sent an email for an explanation about the delay and to know if anything needed clarification. I got texts and emails for another few days saying" I'll be in contact tomorrow. Tomorrow never came. My certificate arrived after three and a half weeks sitting on an architects desk when the gate was locked and nominated subcontractors couldn't access the site. All I got as an explanation was that they were busy doing a planning application for a big office block or something.............. that really made me feel better and important! It's a joke! I received a certificate for sixty thousand in that payment and 90% of that money was gone a fortnight before I received it, how can you finance a job with that kind of a performance from the project designer and manager. There is absolutely no problem with having to fork out money, that's the name of the game but if you don't get it you can't pass it on.


  • #19
    galwaytt
    Registered Users, Registered Users 2 Posts: 12,822 ✭✭✭✭galwaytt


    ^^^^^ This.

    As Swedish supplier said to me years ago, on the subject of aged invoices : " if you want finance, go to your bank. I'm not a bank. "

    Ode To The Motorist

    “And my existence, while grotesque and incomprehensible to you, generates funds to the exchequer. You don't want to acknowledge that as truth because, deep down in places you don't talk about at the Green Party, you want me on that road, you need me on that road. We use words like freedom, enjoyment, sport and community. We use these words as the backbone of a life spent instilling those values in our families and loved ones. You use them as a punch line. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the tax revenue and the very freedom to spend it that I provide, and then questions the manner in which I provide it. I would rather you just said "thank you" and went on your way. Otherwise I suggest you pick up a bus pass and get the ********* ********* off the road” 



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