Signed contract.

3 day cancellation period.

10% deposit on signing of agreement.

Customer agrees to forefit deposit after 3 day cancellation period.

I've only ever had 1 cancellation, and it was on day 3.

 

I collect deposits to ensure that I get no cancellations either. ( Well, among other reasons )

So far I've been fortunate enough to not have any to date :thumbsup:

 

Thanks guys....like I say, I haven't either, but these two things of people not feeling comfortable to give a deposit and a cancellation have spurred me into maybe making something more solid in my approach.

 

If a customer isn't comfortable giving a measley 10% deposit to lock in their contract, then it wouldn't be a customer i'd be interested in working for. What happens when you ask for the other 90% at job completion? Maybe they won't be comfortable with that either?

I do payment schedules that keep me ahead at all times. 10% at signing. 25% at delivery of materials, 35% after 7 working days, balance on completion.

 

I leave no more than 15% for the end project, that is unless it is a commercial job. I get 10% at signing, 50% on day 1, 25% draw after a set completion goal so it only leaves me collecting the 15% at practical completion + any allowance items are due then also. There is a 3 day cancel clause in there also.

 

I take 1/3 down for materials, insurance, and guarantee we will do their job this season.(non-refundable---no i haven't had to enforce it--)
another 1/3 after clean, prep and prime.
final 1/3 at time of completion.
i explain that the three payment system is to insure they are good for the money, and that i am fulfilling my end of the the deal to their expectations. works for me.

 

I used to take 1/3 down, but it is a lot usually and I can understand where people may be uncomfortable giving a substantial down payment to a contractor they don't know from adam.

So I switched it up to 10/25/35/balance. 10% is an easy pill to swallow for most people, and by taking 25% on delivery of materials i'm actually ahead a couple of percentage points from my old system (1/3, 1/3, 1/3).

 

Paint it before they can cancel it. Really!

 

Yep.........




Casey

 

I believe in most states, taking more than 10% down before work begins is illegal.

 

No, I I'm running 3 jobs right now and I stay on the internet.
What I meant is if your worried about a cancellation paint it. I don't like any job sitting. My repaints are usually a fast turn over.

 

ok....easier said than done. I have some time sensitive jobs like people moving in to house and want it done before they move. Daycare renovation near completion which means they want me there asap when the contractor leaves...that sort of thing.

I'm NOT complaining....just sorting some things out...

Thanks for the suggestion though..

 

Except for small jobs (1 day jobs) for repeat customers, we always get 1/3 down. We don't get cancellations.

Once in a while a customer will complain. I explain what we must do to secure a spot for him on the schedule. If he wants me to commit to him, he should be willing to commit to me. And he can do that by putting his money where his mouth is. If he says that I might rip him off, I tell him that if he thinks that of me then I am not the contractor for him. I can only recall one time that I walked away without a deposit--and I didn't take the job.

Interestingly, last week I had a customer give me a $6K deposit for a $13.5K job. I don't normally like getting such a large deposit, but my motto is: If someone wants to give me money, take it.

Brian Phillips

 

I don't normally like getting such a large deposit, but my motto is: If someone wants to give me money, take it.

Brian Phillips

My motto also. I never turn down money.

Funny story.... Two years ago my sister was building an addition. I recomended a GC to her that I've known for about 15 years and worked with quite a lot. Well the day after demolition was done she got a letter from Chase that her home equity line was being reduced because of the "reassessment of property values". (This is just after the crash)

She about blew a gasket and was worried that it would be reduced further. So she talked to me, asked if she could trust him.... and then paid him in full before they could reduce the line of credit further!

 

I always do a 1/3rd down deposit upon booking, been doing this for years on exteriors, and on interiors half down. Always get a deposit, I've learned over 15 years of business. It shows seriousness to commit on the part of the customer. Obviously commercial and industrial are different, but they still do large deposits in those markets.

 

This thread is a very good example of one of the many reasons I come to this site. Seriously considering changing the way I do things. Up to now, I only had one cancelation over the years. I never took any money upon acceptance of contract in the past. Always took 1/3 down when I started the job. Got another cancelation yesterday on a job that had been accepted over a month ago. I called the guy a week ago to discuss colors and coming over to pressure wash and everything was cool. Called yesterday, got his voice mail and left a message that I would be there Tuesday. When I came home, he had left a message...."Um...hello... I sent you an email or called....(no he didnt) Um,anyway... we uh...hired another painter. And uh...well, anyway....thats just the way it is" LOL. Now I am debating whether to take a week off and catch my breath or reschedule a couple jobs around? Been going 7 days a week for the last 6 weeks or so and a break would be nice. Anyway, I believe I will now start taking a deposit up front too.

 

Thanks Woodland! Thats exactly why I take the deposits. If I'm holding some of there money, they are more "invested" in the project and less likely to flake out and do that to you.

Obviously if you have employees that were scheduled its a bigger proplem than taking a well deserved rest for just yourself!

 

No deposits on any job that will be completed in 1 week or less,or under $5,000. More than that,(each job is different) I'll do 1/3 at start balance upon completion.

Would you really feel comfortable giving a contractor thousands of dollars weeks or months before he started??? I wouldn't,I don't care who he thinks he is or says he is or even his references.I don't know him from Adam! He could file bankruptcy the day after I give him a check.

 

I think this goes both ways, the contractor has no idea who we are dealing with either. For me if the job is under a week then nothing is required, if its long, then progress payments after each week. There is really no need to ask for anything up front.

just want to add this is for new customers..

Pat

 

On most residential projects, a 10% deposit doesn't amount to "thousands of dollars."

 

Maybe yours don't. Our average residential is between $1,500 & $5,000.Most are completed in less than a week. It just seems like more trouble than needed. I am coming into there home asking them to trust me.Believe me contractors have a very bad reputation when it comes to ripping people off. This is just what works for me. Many have told me that 1 of the deciding factors in choosing us was the fact that we do not require a deposit.

 

Of course previous customers have already passed the test and the deposit is waved for the average job.

 

I don't get it with some of you guys.

Who cares how long the job is - do you enjoy spending your own money on jobs for other people? Aren't we supposed to be getting money from them to work for them?

I don't finance jobs. Deposits are mandatory. I don't need much; 10%, but I want to know my client isn't a tightwad and wants to do business with me. Deposits accomplish this.

 

I don't get it with some of you guys.

Who cares how long the job is - do you enjoy spending your own money on jobs for other people? Aren't we supposed to be getting money from them to work for them?

I don't finance jobs. Deposits are mandatory. I don't need much; 10%, but I want to know my client isn't a tightwad and wants to do business with me. Deposits accomplish this.

It's about establishing trust. We don't collect a deposit - ever. Sometimes we'll collect something up-front but it is never cash or cashed. Consider it a "reservation fee". Either way the money is held until completion of the job. It's not used for materials, labor, etc... It is simply used to lock in their painting date.

If they back out the money will be returned to them (even though the contract states we get to keep it). Honestly, we've maybe had 1 or 2 of these situations in the last 2 years. Nothing to fret about in my opinion.

 

I had an HVAC unit installed in my house awhile back. The contractor asked for approximately 50% up front for materials. I gladly paid him the deposit, and balance upon completion. $5,000 total.

Painting contractors have to compete against other contractors, whose trades offer more importance, and higher priorities to the consumer, then painting.

I think that this perception makes it difficult for a painting contractor to request a significant deposit for a service that isn't necessarily high on the priority list.

I personally would never give a painting contractor money up front.

Then again, my house would only cost me $5,000 tops.

 

I personally would never give a painting contractor money up front.

Considering that this is a painting forum and you are a professional painter, I find that statement very disturbing.

 

It's unfortunate but, I suspect that in todays economy, and given the saturated and competitive nature of the trade, that most painting contractors are not going to lose a customer because the customer is skeptical about throwing cash up front for a PAINT job that hasn't been started. JMO. God bless those of you with the talent to coerce a deposit out of your mark.

 

Most of the clients I get ask me how much of a deposit I require - I usually don't need to ask.

I suppose our economies, and cultures perhaps, are different that way.

It's highly unfortunate that our trade has been diminished so much that we are not trusted. I suppose the nature of it has led to this - with the help of the 'you can do it, we can help' style commercials from the likes of HD and Lowes, and the other pervasive ads put forth by paint manufacturers such as Behr. Not to mention the seasonal contractors such as College pro, and your high school teacher who takes up painting in the summer.

Anyone can paint, it's not an important trade; not nearly as important as my electrician, drywaller or HVAC guy.

Sad.

It seems the craftsmanship that was once highly regarded in this trade has sunk to being "it's just the painter".

"Just the painter".

I'm not comfortable with that. Are any of you?

"i'll give the HVAC guy $2500 to just look at my problem and tell me he'll get to it in September, but I aint giving no painter a $500 deposit".

Really?

Maybe it's time to start looking into otehr avenues. Plain may be on to something.

 

I probably hire as many sub trades as anyone here, given my construction projects. Since last October when I started, not one sub has asked for a deposit. This includes: excavation, trucking, concrete, framers, roofer, insulators, drywallers, plumber and electrician, as well as all suppliers of materials bought directly by me. It is generally accepted that if they asked, it would cast them in a poor light. Sometimes I even offer and they decline. But the bottom line is that they dont have to ask. They all have plenty going on. What is it about painters?

 

There is something to the old saying: you get what you tolerate.

 

10% is what I was thinking. Seems reasonable to me.

 

I never ask for a deposit to cover my materials, like some have suggested. It's simply to secure a firm start date in the future. And 50%, or even 20%, seems like an exorbitant amount to me. 5% or 10% works perfectly for our needs.

 

Painting is marketed by paint manufacturers as a "Do It Yourself" and save! You don't see the home improvement shows or any company that sell HVAC encouraging HO's to do it themselves. I never see any commercials for paint that suggest you hire a professional. So residential painting is usually seen as (If I can get you to do it a price that I feel is cheaper than what I value my time at then the job is yours) Like it or not boys & girls this is the trade you are in. We know it takes allot of skill but the HO doesn't really see that.

 

aaron, i estimated an exterior about 4 years ago. (huge clapboard house)

the ho got 4 estimates.

he started it himself, and still isnt done.

now he wants it "finished",,lol

so when you mentioned that the ho doesnt think it requires a lot of skill,,,,i think this fella just got schooled.:thumbup:

4 year project, and i wouldve jammed it out in 2 weeks.

 

i require 1/3 of the labor, plus all of the projected materials costs up front.

i dont do this for jobs that will take a day or two.

im not a bank.

this ensures that i will have beer and lunch money, how else would i operate?

 

Well said aaron61.

I have a lot of respect for this trade because it has provided me with security, opportunities, and a comfortable living. I will most likely do this until I retire.

I don't mean to diminish it at all. I'm just suggesting that painters aren't looked upon with the same authority as other trades in the construction industry spectrum. It doesn't mean that you can't be successful at it. It just means we have to understand our position, and create the leverage of financial credit, professionalism, and knowledge in order to gain the trust of the consumer.

APOLOGY! The comment I made about clients being "coerced marks" was unnecessary, and not directed at anyone on this board.

 

A deposit is proof of commitment, intent. Deposits are used everywhere for everything really. Just because other painters have ripped customers off...doesn't mean we change policy. It is what it is...

As for the amount, I like the 30, 30, 30 and 10 deal...if the job is large because all you can get stuck with is 10 percent.

Smaller jobs, I usually got 50 and 50.

Now, if custom colors are being used, I'd certainly get the total of that for a deposit...

Thanks,
Harry

 

Do most of you veterans require a deposit because you've got burned before or because you are paranoid?

We've yet to get burned in the two years we've been in business. Only once did we have a lil bit of trouble collecting.

I understand the need to collect a deposit for locking in their painting date but even if they do cancel would you keep their deposit? Not sure that would be a good thing for your reputation.

I'd use their deposit and then some - if needed - to cover the materials if we purchased these items then they backed out. Never had that happen though.