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#155854 - 02/14/05 05:11 PM billing for new residential construction
jkraft Offline
Registered: 05/05/03
Posts: 74
I've always billed half after the rough inspection and half at the final. A new builder I've gotten wants me to wait till the final to get paid. Anyone else have this happen?
Business, Office, Estimating, Legal:
#155855 - 02/14/05 05:41 PM Re: billing for new residential construction
Electric Eagle Offline
Registered: 04/20/02
Posts: 914
Loc: Alpharetta, GA
We get 60% from most of our contractors and 65% from new contractors. I wouldn't do the job for less than 60% after the rough. Does this contractor think your suppliers and employees are going to wait until the final to get paid? JUST SAY NO!!

[This message has been edited by Electric Eagle (edited 02-14-2005).]
#155856 - 02/14/05 05:47 PM Re: billing for new residential construction
andyp95 Offline
Registered: 03/05/04
Posts: 46
Loc: Vermont
No money at all till final?Tell this clown to take a leap.We get 40% at start of rough (by the end of day we start).40% at rough in inspection,final 20 % at final.If you can't get these terms get at least a 1/3-1/3-1/3 breakdown and get it all in writing.
#155857 - 02/14/05 05:48 PM Re: billing for new residential construction
LK Offline
Registered: 01/21/03
Posts: 1429
Loc: New Jersey

What were the terms of your contract?
#155858 - 02/14/05 06:01 PM Re: billing for new residential construction
Active 1 Offline
Registered: 02/22/03
Posts: 687
Loc: Grayslake IL, USA
It could turn into a long time after the job is done before you see anything. Then there may be many excuses for not paying right away at the end. Lame punch list, customer didn't pay yet, waiting for the bank, etc.. Some GC will hold all their subs money for as long as possable. He'll probibly have another project after this one that needs to start in a hurry before you got paid for the first. Do you really thing any smart GC is going to buy materials and work for the customer for no money until the end? Fat chance. Sounds like a scammer. Eather turn him down or try to be ahead on the money compaired to work / materials done with a large down stroke.


#155859 - 02/14/05 06:20 PM Re: billing for new residential construction
DougW Offline
Registered: 06/08/03
Posts: 1143
Loc: North Chicago, IL
I haven't done (whole) houses yet, but the shops I've worked for always got at least materials billable as a first payment.

It's a practice I've continued.
#155860 - 02/14/05 08:06 PM Re: billing for new residential construction
velect Offline
Registered: 05/01/04
Posts: 81
Loc: st joseph mi usa
Is the builder waiting to get all his money at the final?
#155861 - 02/15/05 04:38 AM Re: billing for new residential construction
Dnkldorf Offline
Registered: 12/12/04
Posts: 1064
Loc: nowhere usa
My first thought might be is walk away.

This guy is not serious about doing Quality work. He is probably looking for the "cheapest" person out there for everything.
Cheapest Electricain
Cheapest Plumber
Cheapest Framers
Hvac, Ect.

Imagine working behind the cheapest framers for a second. First, there is no foreman around to ask questions, the work force doesn't speak english, or, are out on work release, or just don't show up. Plumbers are always late, and it might not be the first one you talked to in the beginning. The first plumber ran away already.

And so on and so on.

Check him out first with local inspectors, BBB in the area and such. He may come back to you, and try to entise you and change the terms to match whatever yours terms are.

Just because you have terms, doesn't mean you are going to get paid.

Check him out before you do anything....

#155862 - 02/15/05 06:03 AM Re: billing for new residential construction
Electricmanscott Offline
Registered: 01/12/02
Posts: 1457
Loc: Holden, MA USA
That is the signal to walk away. I get a third to start a third at rough and balance at completion.

[This message has been edited by Electricmanscott (edited 02-15-2005).]
#155863 - 02/15/05 06:06 AM Re: billing for new residential construction
Dave55 Offline
Registered: 05/08/04
Posts: 697
Loc: Crystal Lake, Illinois, USA
This should be a red flag for you.

I prefer advances to cover materials, but most banks (title companies...a good project is run through a title company to guarantee payment of your contract)won't go along with advances. Therefore, I write in the contract to get most of the money at rough. With a 30 day delay in payment that ends up around the time of final anyway. You don't want to have to wait an extra 30 days beyond that for payment.

I explain to the GC that most of the work and most of the contract is in the rough portion of the job (especially here in "EMT Country").

I figure out what my time and materials will be for the final, and make that the final payment, sometimes even less. It may only be 10% of the contract, but always much less than 50%.

Everyone has a payout at rough. This guy isn't acting business-like and could bankrupt your business. The fact that he even brought it up could leave you finishing the project and not seeing payment for 60-90 days, if ever. Ask what title company he's running the project through and call them to see if you are listed for your contract amount. This is your ONLY guarantee of payment. If there is no title company, or if you're not listed...RUN!


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