1. NEVER EVER PAY CASH! Pay your contractor by check or credit card so you have documentation and recourse should you need it.
2. Never pay for the job upfront or you may never see this “contractor” again.  No reputable contractor will ask for most—or all—of his payment immediately. Most legitimate contractors only bill AFTER the job is done to your satisfaction.
3. Never prepay more than $1,000 or 10% of the job total, whichever is less. That’s the legal maximum in some states, and enough to establish that you’re a serious customer so the contractor can work you into his schedule—the only valid purpose of an advance payment. As to the materials and backhoe rentals, if he’s a professional in good standing, his suppliers will provide them on credit.
4. Never fork over a large down payment for materials.
5. Define and set up payment terms in conjunction with completed stages of the job.  If a contractor makes a mistake or says he needs more money from you, DON’T give it to him. It’s his responsibility to fix his error.  Make sure your contract references this issue.
6. Never pay a contractor the balance of the job, or sign a completion certificate, until all work has been finished.

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