Timeline for Payments

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sheree202

sheree202

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Gold Supporter
Jan 15, 2016
249
Lawrenceville, GA
So, after weeks of delays in our owner build dream....we decided to go with a pool builder. It's a family company with great references and a price that is comparable to what we hoped to spend on an O/B. The only thing that I'm not sold on is the timeline for payments. The following is what they proposed:

10% at signing
20% after excavation
15% after steel and rough plumbing
25% on day of shotcrete
5% after tile/coping
5% after pavers
10% after pebble
5% after sod
5% at start up

Does this seem fair or would you negotiate the schedule?
 
As the consumer, you want the schedule as back-loaded as possible so you have more of a bargaining chip when dealing with the inevitable problems to creep up at the end.

That said, most builders do not seem to have any flexibility in their payment schedule.
 
As Jason states above you want to back load the payments. The final payment should be between 5 and 10% of the total contract and should be due 5 to 10 days AFTER final signoff by the building official and completion of all items on your punchlist. If they say no tell them goodbye -- they will agree. Remember they have mechanic's lien rights protecting them. Never make the final payment until all work is complete per the contract.

This is a business where referals are the most important thing to a contractor they want you to be happy. Get them to agree to what you want upfront. Construction is inherently tense and things will always go wrong. It never turns out exactly as you expected so don't let the PB front load the contract give yourself some leverage.
 
A lot of builders won't agree to that because they don't want to bothered enforcing a lien and it is not difficult for a homeowner to contest a portion of the balance due to alleged problems. To the extent you can't a PB to agree to a holdback you should rely on referrals and ask them if the PB quickly returned to fix issues even after they were paid in full. I wouldn't necessarily eliminate a PB merely because they don't agree - there are other factors to consider
 

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In Houston, we had $500 deposit, then 2 larger payments after gunite and tiling and decking work. The contract specified 10% was due after we had the pool turned over, completing the final punch list and received a release of liens from subcontractors.
 
Similar to mine, but mine was initially all equal installments. However, after adding stuff throughout the build, it became tilted with higher percentages at the end. 1 more payment due....truckload of pavers delivered this morning and they are out there doing the base now. The end is near!!

Congrats on finding a builder and moving forward. Looking forward to your build. Are they really busy or will they start soon?
 
Wow...it's amazing how differently they all do it. Mine was a renovation as opposed to a new build, but for me 50% was due up front, 25% was due after tile was complete, and the final 25% was due after everything was done and the pool was turned over to me.
 
7% At Signing
28% After Shell
28% After Plumbing & Tile
28% After Deck & Electric
9% Final After Pool Running

Only thing troubling me is there is only 9% remaining After Deck & Electric to cover Screen Cage and Plaster so it's weighted somewhat up front.
 
Dldave1978 said:
Similar to mine, but mine was initially all equal installments. However, after adding stuff throughout the build, it became tilted with higher percentages at the end. 1 more payment due....truckload of pavers delivered this morning and they are out there doing the base now. The end is near!!

Congrats on finding a builder and moving forward. Looking forward to your build. Are they really busy or will they start soon?
Click to expand...

Thanks, Dave! You'll be swimming in no time!! Excavation starts next week for us. I'm really worried about hitting rock, but hoping for the best. They think that we should be swimming sometime next month - if the weather cooperates. They tore out our old patio today to make room for pavers. :)
 
Glad you found a PB to expedite the process. At some point of time, the money being saved on an OB is not worth the hassle - especially if you cannot find good subs. Most builds that are OB's have generally not saved money - they generally spent the same amount of money they planned to and got a whole lot of more features.

I am where I just want to finish my project - tired of seeing my backyard in a mess.
 
No money up front, and a 10% holdover until final punch list complete. Non-negotiable. I paid 50% when 50% of the work was complete (less 10% holdover). If they need more before the final job is complete, I will pay according to how much of the job is complete, less 10%. No company should rely on future revenue as working capital. Period.


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Ideally you could / would negotiate a 3-5% hold back for 30 days after final punch list item(s) are done to your satisfaction and the pool runs trouble free for that 30 days.
if they are experienced and reputable, they should agree to that.
Pool construction has a high percentage of fly by nighters who saw a pool built once and figured it wasn't that hard, now they are in the pool business.
 
The only PB who agrees to a 3 to 5% holdout for 30 days is the PB who is either desperate or has already made a tidy profit in your pricing. Select a PB who has demonstrated that they will be around on day 31 and day 100 and day 500. There are several stories of PB'S here that take pride in their work and don't nickel and dime for every small thing.
 

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