BidWell
Request early access

How much to pay up front, and when

The BidWell teamLast checked against Texas law on Nov 2, 2026 · 7 min read

This explains Texas law in plain terms. It is not legal advice. For a specific contract or dispute, talk to a Texas attorney.

The short answer: pay a deposit that covers what the contractor has to buy or book before they start, then pay as the work gets done, and pay the last part after you've walked the finished job.

The goal is simple. You never want to be far ahead of the work, and a fair contractor doesn't want to be far behind. A good payment schedule keeps both of you close to even the whole way.

Why contractors ask for money up front

A deposit isn't a red flag by itself.

The Texas Attorney General says that in most cases a contractor will ask for partial payment in advance, and that you should expect to pay part of the cost before work begins, with exceptions after some disasters (Texas Attorney General).

A fair deposit usually pays for:

  • Special-order materials. Custom cabinets, a specific tile, a vanity that takes six weeks to arrive.
  • Permits, if the contractor pulls them.
  • A spot on the calendar. A small shop that holds two weeks for you turns down other work.

What a deposit shouldn't do is pay for the whole job before anything happens.

How big a deposit?

There's no single number that fits every job, and we won't make one up. Here's what the official sources say:

  • The FTC: don't pay the full amount up front, and some states limit how much a contractor can ask for as a down payment (FTC).
  • The Texas Attorney General: expect to pay part in advance, but don't pay in full until the work is complete and you've inspected it.
  • Texas law: after a declared natural disaster, some repair contractors can't require any payment before they start. More below.

So size it by the job. A good test: ask the contractor what the deposit pays for. "The tile and vanity are special order, about $3,200, so I ask $3,500 at signing" is a real answer. "That's just how we do it" isn't.

On a small job, like a backsplash, a larger share at signing can make sense because materials are most of the cost. On a big remodel, the deposit should be a smaller slice, with more of the money tied to stages of work.

After a disaster, the rule is stricter

Texas has a stricter rule for disaster remediation: removing, cleaning, demolishing or rebuilding after damage from a natural disaster that the governor or a county judge has declared (Business and Commerce Code 58.001).

On those contracts, the contractor may not require any payment before they begin work, and partial payments can't run ahead of the work done and materials delivered (58.003).

The rule doesn't apply to a contractor who has kept a physical business address in your county, or a county next to it, for at least a year before the contract (58.002). See remodeling scams for more on storm work.

Progress payments: pay for what you can see

After the deposit, pay as stages finish. Each payment should be tied to something you can walk in and look at:

  • Demo done and debris hauled off
  • Rough plumbing or electrical inspected
  • Waterproofing in
  • Tile set and grouted
  • Cabinets installed
  • Punch list done

The Attorney General puts it this way: a partial payment schedule usually says what part of the job is done when each payment is due, and you should inspect the work before you pay.

Avoid payments tied only to dates. A payment due "on the 15th" comes due whether the work is there or not.

The final payment

The final comes after a walk-through. Walk the job together, write a punch list, and pay when the list is done. The FTC says never make the final payment until the work is done and you're satisfied.

The Attorney General adds: don't sign a certificate of completion until the work is finished, the site is cleaned up and you're satisfied.

A fair final is big enough to matter, not so big that the contractor has carried the job on their own money. If the progress payments track the work, the final isn't the biggest check.

The Texas paperwork that comes with each payment

On a Texas residential job, payments come with papers. They're how you see your money reached the people who did the work.

Each time the contractor asks for money, they give you a disbursement statement naming the subs and suppliers they intend to pay from it (Property Code 53.258).

Read it. The disclosure you get before signing tells you to make sure the money is going where it should (53.255).

Each payment can come with a lien waiver from the contractor, on one of the four Texas statutory forms (53.284). See Texas lien waivers.

Hold back 10%. Texas law has the owner reserve 10% of the contract price, or of the value of the work done, during the job and for 30 days after it's complete (53.101).

The disclosure warns that if you don't, and a valid claim from a sub or supplier goes unpaid, you may be personally liable up to that amount. Talk about it with your contractor before you sign, so it's built into the schedule and nobody's surprised.

At final payment, the contractor gives you a bills-paid affidavit (53.259). See the bills-paid affidavit.

On a homestead job over $5,000, your payments go into a construction account at a financial institution (Property Code 162.006).

How to pay

  • Not cash. The FTC lists cash only as a scam sign. Use a method that leaves a record.
  • Get an invoice or receipt for every payment, showing what it's for and the balance left.
  • Keep it all together: the contract, the change orders, the invoices, the waivers.

Change orders: paid as they happen

When the job changes, the change order should say what it costs and when you pay for it. Paying for a change when you approve it, or before that work starts, keeps it out of a big surprise at the end.

More in change orders from the homeowner's side.

Three example schedules

These are examples, not rules. They start from the shapes in our contractor payment schedule guide, seen from your side, with the 10% reserve added. Your job and your contractor will change them.

A short job, a few days (a backsplash, a small floor)

  • A deposit at signing that covers materials
  • The balance after the walk-through, less the 10% reserve
  • The reserve, 30 days after the work is complete

A bathroom remodel, two to three weeks

  • 25% at signing
  • 25% at start of work
  • 25% when tile is set
  • 15% after the walk-through
  • 10%, the reserve, 30 days after the work is complete

A bigger remodel, a month or more

  • A smaller deposit, like 20%, at signing
  • Three or four progress payments, each tied to a stage from the list above
  • A final after the walk-through
  • The 10% reserve, 30 days after the work is complete

Whatever you agree to, write the trigger next to each payment. "25% when tile is set" leaves nothing to argue about.

What if the contractor won't agree?

Some contractors want more up front than you're comfortable with. Ask why. If the answer is special-order materials, you might pay that supplier directly or pay the deposit when the materials arrive.

If there's no real answer, keep looking. Your other bids will tell you what's normal.

Questions homeowners ask

Yes. The Texas Attorney General says to expect partial payment in advance in most cases. Ask what it pays for, and never pay the whole job up front.

Sources

This explains Texas law in plain terms. It is not legal advice. For a specific contract or dispute, talk to a Texas attorney.