Quick answer: Collect the deposit at the moment the customer signs — in the same sitting, as part of the same step — not as a separate "before we start" conversation days later. Typical home-improvement deposits run 10–33% of the job, though several states cap the percentage, so check your local rule. The exact amount matters far less than the timing: a signature without a payment is a promise, and promises are what you end up chasing.
Most contractors think of the deposit as a logistics step: get the contract signed, then a few days before the crew shows up, ask for money. That gap — between "yes, let's do it" and the deposit actually landing — is where a surprising amount of revenue quietly leaks out.
Why is "before we start" too late?
The day a customer commits is the day they're most sure. From there, certainty only erodes: a spouse raises a concern, a surprise bill lands, another contractor calls back, or the project just stops feeling urgent. If your deposit request arrives three days later as its own ask, you're re-selling a decision the customer already made — and giving second thoughts room to grow.
There's a cash-flow cost too. Construction already has the worst payment timeline of any major industry — average days-sales-outstanding runs about 83 days versus roughly 60 across all industries (K38 Consulting). Every day between commitment and first dollar widens that gap. Collecting at signature collapses your first payment window from weeks to minutes.
How much should you collect?
There's no universal number, but common practice clusters here:
- Small jobs (under ~$10k): 25–50%, sometimes the full materials cost.
- Mid-size remodels: 10–33%, with the balance drawn against milestones.
- Large projects: a smaller deposit (10–20%) plus a clear milestone schedule does more work than one big number — the draws carry the cash flow, and the deposit carries the commitment.
Check your state. Several states cap home-improvement deposits by statute or percentage (for example, some limit residential deposits to a set fraction of the contract). Consult a legal professional for the rule where you work, and put that number in your contract.
The deposit's real job isn't to fund the job — it's to confirm commitment. A customer who balks at any reasonable deposit is showing you risk you'd rather find now than on demo day. And a customer who pays it without blinking has just told you the opposite: they've decided, the budget is real, and the rest of the schedule is going to be easy. Both are worth knowing on day one.
What's the highest-leverage change — sign and pay in one step?
Here's the move that separates shops that chase from shops that get paid: make signing and paying the deposit a single action. Signing is fast when it's frictionless: about 80% of DocuSign agreements are signed within one day, and 44% within 15 minutes, and DocuSign's customers report a 41% decrease in time to close deals after adopting e-signature (DocuSign). When the customer can review the proposal, e-sign, and pay the deposit by card or bank transfer in one mobile flow — at the kitchen table, while they're still excited — there's no second ask, no gap, no chase.
Compare that to the common path: email a PDF, wait for a signed scan, then later send a separate deposit request and wait again. Each handoff is a place the deal can cool — and each one happens on the customer's schedule, not yours. The single-step version happens on the one schedule that favors you: right now, while they're excited.
What does the deposit actually do for the job?
Three things, and only one of them is about the money.
It funds the first week. Materials get ordered, the dumpster gets dropped, the sub gets a start date. On a job with a long-lead item — cabinets, windows, a special-order tub — the deposit is what lets you place the order the day the contract is signed instead of the day the crew shows up. That alone can pull a start date forward by weeks.
It sorts the customers. A homeowner who happily pays a fair deposit at signing has told you something. So has the one who wants to "handle that later." Slow-pay is endemic in this industry — 82% of contractors reported payment delays of more than 30 days in 2024, up from 49% two years earlier (Rabbet, 2024 Construction Payments Report) — and the deposit is the cheapest early-warning system you'll ever run.
It anchors the schedule. A deposit paid against a written payment schedule turns the rest of that schedule into something both sides already agreed to. The second draw isn't a negotiation; it's line two of the document they signed and paid against. That matters more than most contractors expect, because scope moves on a lot of jobs: in Houzz's 2026 survey, 37% of renovating homeowners went over budget, mostly by choosing better materials or adding scope mid-project (Houzz 2026 U.S. Houzz & Home Study). When the payment schedule is already a signed fact, those changes become change orders with their own deposits — not arguments about the final bill.
How do you make the terms unmissable?
A deposit works best when it was never a surprise. Put the full payment schedule — deposit, milestone draws, final payment — in the proposal as numbered terms the customer reviews and signs, not as fine print at the bottom of an estimate. More than 1 in 3 contractors say payments are often delayed because of a dispute over the quality of work (Levelset), and most of those start with terms that were assumed rather than agreed. Thirty seconds walking through a clear schedule at presentation prevents weeks of back-and-forth later. Read it aloud, ask if the timing works for them, and adjust it then if it doesn't. A schedule the customer helped shape is a schedule they'll keep.
This is exactly the flow Sharp & Hired was built around: the payment schedule rides inside the proposal, and the customer signs and pays the deposit in the same mobile step — so the gap between "yes" and signed-and-paid is minutes. But the principle stands no matter what tools you use: collect at the moment of commitment, on terms both sides already agreed to.
How do you ask for it without making it awkward?
Most of the awkwardness is on the contractor's side. Homeowners expect a deposit; what they don't expect is to be asked for it as a surprise, days later, by text. Three habits take the awkwardness out entirely.
Say the number early. Mention the deposit at the walkthrough, before there's a proposal: "When you're ready to go ahead, it's a third down at signing and the rest on milestones." By the time the proposal arrives, the deposit is old news.
Put it on the same page as the signature. Not in the terms at the bottom — right next to where they sign, as the first line of the payment schedule. When the customer signs, they're signing the deposit too. Asking for it is no longer a separate conversation, because it isn't separate.
Give them a way to pay that takes one minute. A card, a bank transfer, a link on the phone they're already holding. The deposit that has to wait for a check to be mailed is a deposit you'll be chasing. The one they can pay while you're still standing in the kitchen gets paid while you're still standing in the kitchen.
Done this way, the customer never experiences a "deposit request." They experience signing a proposal — and the deposit is simply part of what signing means.
FAQ
Is it normal for a contractor to ask for a deposit upfront? Yes — it's standard for established shops. The deposit confirms commitment and funds initial materials. Customers who refuse any reasonable deposit are a risk signal.
How much deposit is too much? Beyond a third of the job for ordinary remodeling work tends to make customers uneasy, and some states cap it outright. Big number isn't the goal — collecting a fair amount at the right moment is.
Should I collect the deposit before or after signing? At signing, in the same step. Splitting them into two separate asks, days apart, is where deals cool and deposits get delayed.
What if the job is paid by insurance or a lender? Follow the carrier's or lender's disbursement schedule — those jobs pay against inspected progress, not your invoice. Still document the payment source and schedule in the signed contract so everyone knows where the money comes from and when.
Sources: K38 Consulting — How to Improve DSO in Construction, DocuSign, Levelset — 2020 National Construction Payment Report, Rabbet — 2024 Construction Payments Report, Houzz 2026 U.S. Houzz & Home Study. Deposit caps vary by state — confirm your local rule; this is not legal advice.