Fifty percent when you sign, the rest divided across milestone draws written into the contract, and five thousand dollars held back until the punch list is cleared. That is the whole structure on every project we run, from a single bathroom to a whole home. What follows is why it is built that way, because the reasoning is more useful than the numbers.
The three parts, in order
Fifty percent is due at signing. The remainder is split across milestone draws, and how many there are depends on the size of the job. The final five thousand dollars sits outside all of that and is released after the punch list and closeout.
On the smallest jobs that comes to three payments in total. The deposit, one draw, and the retainage. On a large one it might be the deposit, four or five draws, and the retainage. The structure does not change with the size of the project. Only the number of steps in the middle does.
Your start date is set by when the deposit clears
This is the practical thing to take away, and homeowners are rarely told it.
We do not start a project until the deposit has cleared. If you want to sign today and pay next week, that is fine and I will not push you. But if the money lands three days later than planned, the start moves by three days, because there is one rule that does not bend on our jobs. We are not going to spend our own money to finance somebody else’s project.
So the date in your head when you sign is not the date work begins. Work begins when the deposit is in the account, materials can be ordered and subcontractors can be committed to dates. If you want the earliest possible start, move the deposit quickly. That single decision is worth more to your schedule than almost anything else you control.
It is the third hidden step between deciding and building, alongside the one to three months it takes to get onto a schedule at all, and the lead time sitting behind every material order. We wrote about the first of those in how far in advance you should book a contractor.
What actually releases a draw
The payment schedule is agreed and written into the contract before anybody starts work. The milestones and the amounts are set at that point, so you know every payment and roughly when it lands on the day you sign rather than finding out by invoice.
Those milestones are chosen around when the money is genuinely needed. After rough-in, after paint, whatever the shape of that particular job requires. We calculate where the next check has to arrive in order to cover overhead, pay the trades and buy the next round of material.
Then the sequence is simple. The milestone is passed, an invoice goes out, and the terms are net seven.
Why we collect faster than we pay
Here is the part that explains almost everything else, and almost nobody outside the trade knows it works this way.
Our invoices to you are net seven. Our subcontractors invoice us on net fourteen. That week in between is deliberate. It is the mechanism that lets us process overhead and then pay the trades the following week, using money that has already arrived rather than money we are hoping for.
That gap is the reason we never front our own money on a project, and it is the reason a subcontractor on one of our jobs is not waiting on your check to clear before he gets paid. It also means the timing runs one direction. If a homeowner sits on an invoice for an extra week, that does not land on me in the abstract. It lands on the schedule, because the next trade cannot be committed until the money behind him is settled.
This is the same thing we said about change orders in what happens when you change your mind halfway through. Another client’s decisions can move your dates and yours can move theirs. The money system and the schedule turn out to be the same system looked at from two sides.
Why fifty percent
There are four reasons and none of them are about wanting the money early.
It buys the material. It lets subcontractors be committed to real dates rather than provisional ones. It means we are not financing your project out of our own working capital. And it protects overhead through the stretch of work between signing and the first draw, because a business carries daily cost whether or not a check arrived this week.
I will be blunt about the flip side. If a general contractor offers to do your remodel with no money down, I would want to understand how they are funding it. Somebody is carrying that cost, and if neither of you is carrying it, the trades usually are. A deposit is a sign the business understands its own numbers.
How many draws you should expect
It scales with the job. I have run projects with a single draw and projects with four or five. A small bathroom might be a deposit, one draw and the retainage. A whole home is spread across more milestones, because there is more work between the points where money is needed.
What does not change is that the number is decided before you sign, not as we go. If a payment schedule is being invented mid project, something has gone wrong with the planning.
The last five thousand is yours to hold
We take the final draw at substantial completion and leave five thousand dollars outstanding. You pay that after the punch list is cleared and the job is closed out.
That is deliberate and it runs against our own interest. It means the last stretch of work, the touch ups and corrections that are easy to lose interest in once a room looks finished, still has money attached to it. A contractor who has already been paid in full has nothing but goodwill motivating him back to your house. We would rather not rely on goodwill, including our own.
There is more on how that closeout works in how to plan a remodel without going over budget.
What happens if a payment is late
Our contract allows us to pause a project until payment is current. I want to be straightforward about that clause: we have never used it. Not once. It sits there against a future possibility rather than describing something that happens.
The reason it exists is the net seven and net fourteen structure above. If money stops arriving, the trades behind the work still have to be paid on their own cycle, and there is no version of this where subcontractors absorb somebody else’s cash flow problem. Pausing protects them. That is arithmetic rather than a threat.
The short version
Fifty percent at signing, and the start date follows the money clearing rather than the signature. Milestone draws written into the contract, invoiced when the stage is passed, net seven. Five thousand held back until the punch list is done.
If you are working out how to fund a project rather than how it gets paid out, we covered the options in how to finance a home remodel in Utah.
