If there’s one part of hiring a contractor that makes homeowners nervous, it’s money.
Not the final price — but when, how, and how much you’re supposed to pay along the way.
In a recent Hire It Done episode, home improvement expert Adam Helfman walked homeowners through the smartest way to structure contractor payments so projects stay fair, transparent, and stress-free.
If you’re planning a kitchen remodel, room addition, or major renovation in Southeast Michigan, this guide will help you protect your investment and keep control of your project.
Why Payment Schedules Matter More Than You Think
Most contractor disputes don’t start with bad intentions. They start with unclear expectations around money.
When payment schedules aren’t defined properly, homeowners feel overexposed and contractors feel underfunded.
That imbalance creates tension, delays, and mistrust.
As Adam explains on Hire It Done, the goal isn’t to starve the contractor — and it’s not to bankroll them either.
The goal is balance.
A fair payment schedule keeps the project moving while protecting you from unnecessary risk.
Understand This First: The Contractor Is Not the Bank
One of the biggest misconceptions homeowners have is assuming the contractor is financing the job.
They’re not.
Unless you’re using a bank loan with formal draws, you are the bank. The contractor uses your payments to fund labor, materials, permits, and scheduling.
That’s why payments must follow progress, not promises.
When payments are tied to real milestones, everyone stays accountable.
What a Reasonable Deposit Looks Like
Let’s start with the very first payment — the deposit.
According to Adam, a reasonable deposit is typically around 10% of the total project cost.
Why?
Because that money allows the contractor to:
- Schedule your job
- Begin design and planning
- Pull permits
- Line up trades
It does not pay for the entire project — and it shouldn’t.
If a contractor asks for 40–50% upfront on a large project, that’s a red flag. You should never be fully exposed before work begins.
How Milestone-Based Payments Protect You
The smartest payment schedules are milestone-based.
That means each payment corresponds to visible progress on your home — not calendar dates or vague promises.
For example, on a $120,000 kitchen addition, a payment structure might look like this:
- 10% deposit at contract signing
- 20% when demolition or excavation begins
- Additional payments at framing, mechanicals, and major installations
- Final payment only after completion and walkthrough
This structure ensures that:
- The contractor maintains cash flow
- You’re never ahead of the work
- Progress stays measurable
As Adam explains, momentum matters — but control matters more.
Why You Should Never Pay Ahead of Progress
Paying too much too early removes leverage.
Once a contractor is overpaid relative to the work completed, motivation drops and delays become easier to justify.
A fair schedule keeps both parties invested at every phase.
You’re not being difficult by asking for milestone payments — you’re being responsible.
Why Permits and Demo Matter in Payments
Adam emphasizes that permits and demolition are critical moments in any remodel.
Once permits are pulled and demolition starts, the contractor has real expenses and real labor on site. That’s when larger payments make sense.
Before that point, payments should stay limited.
If a contractor hasn’t pulled permits or started work, you should not be funding major portions of the project.
What the Proposal Must Include
A proper proposal is not just a price — it’s a roadmap.
According to the Hire It Done episode, your proposal should clearly outline:
- The full scope of work
- Payment milestones
- Timeline expectations
- What is not included
Adam strongly advises homeowners to ask contractors to list exclusions explicitly.
Why?
Because exclusions prevent disputes.
Hidden issues, homeowner-supplied materials, paint, or changes required by inspectors should be clearly defined before you sign anything.
Why “What’s Not Included” Is So Important
Asking a contractor to list exclusions forces clarity.
It makes the contractor stop and think through potential gray areas — and it gives you transparency before money changes hands.
This single step can prevent thousands of dollars in unexpected costs later.
How to Talk About Money Without Awkwardness
Money conversations don’t need to be confrontational.
Adam suggests being direct and respectful:
“I want a payment schedule that matches progress so we both feel comfortable.”
Good contractors appreciate this approach. It shows you’re serious, organized, and committed to a successful project.
If a contractor becomes defensive about fair payment terms, that’s valuable information.
What to Do If You’re Using a Bank Loan
If you’re financing your project through a bank or HELOC, payment schedules change — but the principles stay the same.
Banks release funds in draws, tied to inspections and milestones. This adds another layer of accountability for both you and the contractor.
Even with financing, clarity and communication remain essential.
Why Communication Is Part of the Payment Plan
Payment schedules don’t exist in isolation.
They rely on communication.
Adam stresses that homeowners should discuss:
- How often updates are provided
- How delays are communicated
- Who to contact with concerns
Regular communication keeps payments aligned with reality — not assumptions.
What Happens When Problems Come Up
Every project encounters surprises. What matters is how they’re handled.
A fair payment schedule gives you time to address issues before releasing more funds.
You should never feel rushed to pay while concerns remain unresolved.
As Adam explains on Hire It Done, resolving issues early prevents escalation — and protects relationships.
Why Hire It Done Helps Homeowners Avoid These Mistakes
This entire framework is why Hire It Done exists.
Hire It Done connects Southeast Michigan homeowners with vetted contractors who understand transparency, communication, and fair business practices.
The goal is simple: hassle-free home improvement built on trust.
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