My Contractor Wants $2,000 For A Down Payment

Don't give it to them. I can't stress this enough and I'm going to say it again, don't give it to them. If you feel comfortable with the contractor, maybe there's something else that you can work out, some other way that you can get the job started, but that's a lot of money to give a contractor, especially if it's someone who you just met.

Here's something else that you need to take into consideration. In the state of California, the maximum amount of money that you're allowed to receive, upon signing the contract, is 10% of the overall project cost and no more than $1000.

In other words, if you have a job for $15,000, 10% to $15,000 would be $1500. The contractor is not allowed to receive more than $1000 upon signing the original contract.

Now let's take another example here. Let's say that the overall cost of the job is $7,500. 10% of $7,500 is $750. The contractor is not allowed to get more than $750. That's it and it's that simple, but remember that's the state of California. Your state might have different laws and you should check into them, before paying any down payments to a contractor.

If your contractor is going to be purchasing $2000 worth of materials and request the money, that's not unreasonable. This is not usually how I do business, but I know a lot of contractors, who don't want to be out any money. If a contractor ordered $2000 worth of materials, and you chose not to pay them their money, he could be out in a lot of money.

Here's the best way to deal with any one that is requesting money in the construction business. Try to work something out that sounds reasonable and you both agree on it. The key here is to make sure that you are both in full agreement of whatever decision you make together

In a situation where the contractor doesn't want to spend his money up front, maybe you as the homeowner, could purchase the products and have them delivered to your home and deduct these costs from your original contract.

It's not difficult, but I have seen plenty of people make this process extremely difficult. Use common sense and a little creativity and you won't have too many problems with your contractor.