Payment Terms for HVAC contractors ??
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  1. #1
    Join Date
    Mar 2006
    Location
    Central Virginia
    Posts
    18
    Can any of you new construction HVAC contractors tell me the typical payment plan a HVAC contractor would expect on a new home? Isn't there a payment up front, one in the middle and one at the end? What's the typical % of each payment and at what point in the project are these payments made?




  2. #2
    Join Date
    Feb 2005
    Location
    Toms River, NJ
    Posts
    425
    If you are dealing with builders, it is very unusual to get a deposit. Usually you bill after the rough, there are a few different ways to do this. You can bill for a "Top Rough" which is just stacking out the house, Or you can bill out for the rough where all the duct is installed. The furnaces and coils may or may not be included in this billing. You can bill again after the furnaces are in. They you will bill for the finish which will be the condensers, grilles, registers, and stats. There really is no right or wrong way to do it. The key is dont get too far behind and get most of your money in the first couple of payments. I try to get the last payment to equal about 10% of the total job price. A bit of advise as a sidebar, put some money to the side because 10% is usually not enough to cover all your costs for your final. The purpose of the 10% is not to get burned. If a builder is going to burn you It will be on the final payment, so having 90% of your money is better than say only 50%. Not all builders will agree to this, so you will have to work it out, but get that last payment as low as possible!! I personally get two payments, one after the rough (I set my furnaces on my rough) and one final payment for the finish (described above). When I do add-on replacement type work for homeowners, I usually get a 1/3 deposit and 2/3 upon completion. If a builder tries to burn you make sure you get a mechanial lein very quickly as they are time sensitive. If you are be going to doing alot of new constrution I would think about consulting with a lawyer that works in construction law to find out about contracts and mechanical leins. This knowlege will help you alot. Always get the builder to sign some kind of contract even if its on a peace of cardboard!! If you are going to work for one of these big national builders, they will call all of the shots and you will be at their mercy, they will make you sign all kinds of contracts, be careful and know what you are agreeing to!! Again, the key is not get too far behind. Good Luck!

    Dave in NJ

  3. #3
    Join Date
    Apr 2001
    Location
    Arkansas
    Posts
    2,111
    I get two. One after I have installed airhandler and ductwork. Then a final after I install the condenser or pump and trim out inside.
    The first covers all I have done to that point.
    "FIGHT CRIME: SHOOT BACK"

  4. #4
    Join Date
    Oct 2003
    Location
    Washington
    Posts
    7,405
    Originally posted by duckhunter
    Can any of you new construction HVAC contractors tell me the typical payment plan a HVAC contractor would expect on a new home? Isn't there a payment up front, one in the middle and one at the end? What's the typical % of each payment and at what point in the project are these payments made?



    Here's the bottom line if you are thinking those bastards are gonna give you enough money in their first payment to cover your initial costs. They won't! Here is how it usually breaks down in new construction, unfortunately.

    1/3 payment = 50% of your upfront costs

    2nd 1/3 payment = maybe 40 to 45% of your costs

    Final 1/3 payment = your 2 to maybe 3% take on the whole thing.

  5. #5
    Join Date
    Jan 2004
    Location
    Lancaster PA
    Posts
    67,630
    Wrong forum for this discussion.
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