Remodeling your home can cost anywhere from a few thousand dollars to over a million. Once you’ve established designs for your remodel, agreed on a price, and signed the contract, it’s time to start building. But while you may know what you’re going to pay for your remodel, the mechanics of how that payment changes hands might still be a little confusing. If you want to know more about Lamont Bros.’ payment process, you can learn about it here.
Our team at Lamont Bros. has remodeled hundreds of homes. Having worked through the billing process many times, we know that payment processing can often feel confusing or complicated for many clients. That’s why our payment plan is designed to be as simple as possible for you, while still protecting your interests in your remodel.
In this article, we’ll walk you through a basic breakdown of our payment process. When you finish reading, you should feel confident, informed, and prepared to handle the payment plan like a pro. At Lamont Bros., the phases of our payment process include:
- The Design Retainer
- Your Construction Contract
- A 25% Down Payment
- Weekly Progress Payments
- Completion Retainage
Design Retainer
At Lamont Bros., we believe that the best way to have a successful remodel is to start with a great design. To achieve this goal, we employ a team of professional remodel designers to help you bring your dreams into the design plans.
The first installment of your remodel payment comes early on in the process. This is the design retainer, which covers the cost of the design work for your remodel. Generally, it makes up about 5-7% of the total remodel cost.
Your design retainer pays for the cost of your design team as they work with you to develop plans for your remodel. If any of the design retainer remains once the team completes their design work, the leftover funds go towards the construction price.
Even though you sign your construction contract after you’ve already paid your design retainer, the contract price includes the dollar amount of the retainer. In other words, the amount you’ll have left to pay equals the contract price minus the design retainer.
Construction Contract Price Lock
Once you and your design team work through the remodel design process together, it’s time to sign your construction contract.
This is an important step in the process because, with Lamont Bros., you have a fixed-cost contract. In a fixed-cost contract, you and your builder agree upon a set cost to build the designs in your remodel, so you know exactly how much it will cost before construction ever begins.
When you sign the contract, you’ll also get a chance to review how the payment plan will look moving forward.
25% Down Payment
After you sign the construction contract for your remodel, there is an initial down payment of 25%. This down payment acts as an advance for your build team to get the ball rolling on your remodel.
In order to make sure the project begins on time, there are several things that must happen. Over a few weeks, the build team has to order all of the construction materials for the remodel and pay to have them delivered to the warehouse. Then, each carpenter working on your home will receive a work schedule. They’ll also need to start obtaining the necessary permits for changes being made to your home.
The money from your down payment goes directly towards these upfront costs. By covering these initial expenses, the down payment ensures that your remodel will begin as soon as all the pieces are in place.
Weekly project payments
When construction on your remodel begins, you’ll start making weekly payments for the remainder of the project. Each week, as your build team continues to work on your home and add value to the property, you’ll pay for the progress being made.
We find that this approach works well because both you and your build team receive equal benefits and assume equal risk at each milestone along the way. It doesn’t make sense for you to pay the outstanding balance of your to remodel upfront. It also doesn’t make sense for us to wait until the end of the remodel to send you the bill. Both of these options assign too much risk to one party or the other.
Instead, we break down the total bill for the remodel into several smaller chunks. That way, the build team gets paid as they work and you get to see the progress of your remodel as you pay.
Retainage
As your remodel nears the end of construction, there may be a few final changes that require more time to complete. Perhaps there’s a light fixture on backorder and it won’t arrive for 3 more weeks. Or maybe the weather doesn’t allow exterior painting to be completed for a month. Whatever the case, these final completion items can be frustrating for the client and the builder.
Once a remodel is completed enough that you can once again start using that, we call that substantial completion. It isn’t 100% done, but it is ready for you to live in again. Upon substantial completion, your project manager will calculate your retainage. The retainage is the amount of your contract price you get to keep until the remodel is fully completed.
Typically, the retainage is two times whatever it will cost to get the project over the finish line. So, if the value of outstanding work is $2,000, then your retainage would be $4,000. The retainage is the way we guarantee that our team will return to fully complete the job. We don’t collect the final payment until our work is done.
Want to learn more about what to expect during a remodel?
Now that you know what to expect from the payment process with Lamont Bros., you can work that knowledge into the financial plan for your remodel. But don’t stop there! If you’re headed into a home remodel, it’s important to know what to expect from the process. Read our article, “What to Expect During a Home Remodel,” to learn more about how your life might change when your home is under construction.
Exploring your options, but not yet sure if you want to remodel your home? If you’re thinking about renovating but don’t know where to begin, let us help. Click the button below to schedule a free video consultation with a member of our design team. We’ll help you understand the process of remodeling so you can be confident in the decisions you make for your home.