Paying Contractors -- can I do it this way?

I've received various advice about how to go about hiring/paying a contractor/builder -- can I do it this way? Has it worked for anyone?

Pay them in thirds. 1/3 when the work begins, 1/3 when they're half-way done, and 1/3 when the job is complete.

Can I ask for a discount if we pay in cash?

Can I offer them a 5-10% bonus if they finish more than a week/mo early? (I have a feeling I'm dreaming this one up -- do they EVER finish early?)

TIA!!

Re: Paying Contractors -- can I do it this way?

Absolutely!

I never pay all up front EVER.. I don't care what their reasoning is..

Re: Paying Contractors -- can I do it this way?

seems reasonable to me, though it depends on what is being done. Sometimes they need more for materials.

But its in your best interest to hold back as much $$ as possible, until you are completely satisfied with the job - it gives you leverage.

Re: Paying Contractors -- can I do it this way?

The 1/3rd plan sounds reasonable to me. I would even break it up into more installments if you can.
I would be leery of the bonus-would you be able to tell if they are cutting corners and rushing things? The good contractors don't need the bonus and want to finish on time as they have the next job lined up.
Good Luck!

Re: Paying Contractors -- can I do it this way?

I use the 1/3 plan as well except I hold the last 1/3 for two weeks after the job is complete to my satisfaction. I can also see if something breaks down or there is a minor issue that needs attention. I find if you pay when they say they are done invariably something will come up and they won't want to come back to fix it. By holding the last payment until the job is actually done it protects you.

Re: Paying Contractors -- can I do it this way?

i think thats fair !

we paid ours after the demo, and foundation.. that was less than a 1/3.. then we paid the rest in increments , then after the final walk through with them to make sure everything was good.. we paid them the rest

Re: Paying Contractors -- can I do it this way?

We had a huge reno project, so we had somewhere around 8-10 payments, based on milestones.

Anything is possible, as far as payments go. It's all up to what you and the contractor can agree to.

If you do the time bonus, make sure you get their time estimate first, THEN offer the bonus....

I wouldn't make the bonus for a month early, though. They'll be cutting corners just to make that date.