We have a simple payment structure: 30% as downpayment, for that we order all the equipment and put the loop in. 40% after we deliver the heatpump, 30% after the install is complete, the system works as promised and the customer is happy. If we do not perform, we do not get paid. What is there to put in escrow? It would be a slap in the face for a contractor who already trusts its customers to make the payments.

I suppose everyone bills differently. Our installer didn't require us to pay anything until the job was complete, then full payment was due. I recall a provision in our agreement stating that the installer is able to remove the equipment for non-payment and interest added for late payment. Unfortunately, every installer, and every customer for that matter, doesn't always deliver on what is promised.

Could not afford that. The equipment is too expensive, and especially new builts might take too long to complete. The profit margin is not high enough, it would take us too long if we ever loose the entire payment. Plus it is not too inconvenient to ask for 3 checks over the install of a geo system. It protects the customer since the last payment is due after the job is done and he/she is happy, but it also limits our risk. It is a fair win-win. I had one customer die while we were installing a system, final payment came 2 years after the family fought in court over who gets what.

I understand. I'm not expressing an opinion one way or the other, just that payment terms vary. Positive reputation and great references certainly help to put a customer's mind at ease.

30% after the install is complete, the system works as promised and the customer is happy.

So effectively, someone like docjenser allows the customer to escrow 30% - and allows the customer to be the escrow agent. That plus the reasonable performance guarantee (assuming there is some accommodation for temps colder than 0F) should exceed schadwick's (or anyone else's) request.

I am upset about some of the stories you hear putting a bad rep on geo. Had a local "guy", who just got IGSHPA certified (first real job after the training) charge 50% down for a 7 ton, $47K geo system he designed for a 57KBTU heatload (you know, he argued that the heatpumps need to put out 57 KBTU to satisfy the load). Never showed up to do the job, went belly up. I would argue that a case like that is also some fault of the homeowner, they have to get informed better and check out these guys. I tell them that every time I put a proposal on the table. It was an older couple, lifetime savings, we put in a 4 ton system for the remainder of the balance ($23.5K), which they are very happy with. So at least they get their house heated for the $47K they expected to pay.

Posted By jonr on 22 Nov 2010 02:15 PM

30% after the install is complete, the system works as promised and the customer is happy.

So effectively, someone like docjenser allows the customer to escrow 30% - and allows the customer to be the escrow agent. That plus the reasonable performance guarantee (assuming there is some accommodation for temps colder than 0F) should exceed schadwick's (or anyone else's) request.

Not really, I would not allow the customer to keep the 30% money until outside weather reaches 0 degrees F. The coldest it got last year in Buffalo was 5 degrees.....Luckily, so far all of our customers are reasonable, very pleased and never had any complains about an underperforming system. If that ever happens, I would be there the very next day. Only one customer called about too high of an electricity bill. I was there the same night, it was about 10 degrees F with 30 mph wind from the north. The customer was opening the door wearing a tshirt and shorts, the house was at 76 degrees F. He was enjoying his new freedom from propane. I was explaining that geo was the cheapest way to heat his home, but it is not free. I did charge him 2 beers for the trip out there! The latest I ever got my money was 30 days after run up (with the exception of the death case I was referring too). Most people appreciate what you do for them, and treat you with the same courtesy.