What is Ratedeed Milestone Escrow?
Ratedeed Milestone Escrow is an independent financial protection framework designed specifically for residential construction, renovations, and trade repairs. In traditional home contracting, homeowners are frequently pressured to hand over large cash or check deposits before any work begins—leaving them exposed to contractor abandonment, substandard craftsmanship, or project delays.
On Ratedeed, no contractor receives direct payment upfront. When you accept an itemized quote and fund a milestone, your funds are placed directly into a secure, encrypted escrow vault managed in partnership with Stripe Financial Services.
The contractor begins work with complete confidence that 100% of the funds are verified and secured in escrow. Meanwhile, the homeowner retains total control: funds are only released when each milestone is completed, inspected, and explicitly approved.
Homeowner Funds Deposit ──► Secure Escrow Vault ──► Work Completed & Inspected ──► Direct Bank Payout
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(If Abandonment or Issue)
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100% Guaranteed Refund
How the Escrow Process Works Step-by-Step
1. Itemized Milestones & Deliverables
Before any money changes hands, the contractor submits a detailed, binding digital quote outlining clear phases (for example: Milestone 1: 30% Demolition & Rough Plumbing; Milestone 2: 40% Tile & Fixture Installation; Milestone 3: 30% Final Trim & Testing).
2. Secure Escrow Deposit
The homeowner reviews the milestone schedule and deposits the required funds using a credit card, debit card, or ACH transfer. The funds are held in secure platform escrow and displayed on the project dashboard as "Funded in Escrow".
3. Work Execution with Photo Updates
The contractor completes the agreed-upon phase. Through the Ratedeed mobile or web application, the contractor uploads time-stamped verification photos documenting the completed work and marks the milestone as "Completed - Pending Release".
4. Homeowner Walkthrough & One-Click Release
The homeowner inspects the work on-site. Once completely satisfied, tapping "Release Milestone Payment" instantly transfers the funds from escrow directly into the contractor’s connected bank account via Stripe Connect.
Why Escrow is Safer for Both Parties
For Homeowners:
- Zero Risk of Contractor Disappearance: If a contractor leaves midway through a project or fails to show up, your unapproved milestone funds remain safe in escrow and are returned to your account.
- Enforced Quality Control: Contractors are financially incentivized to complete work to your exact specifications before receiving payment.
- Built-in Mediation Defense: If a dispute arises regarding quality or scope, escrowed funds are frozen immediately while our neutral resolution specialists review the contract and photos.
For Contractors:
- Guaranteed Payment Upon Completion: You never have to chase clients for unpaid invoices or worry whether a homeowner has sufficient funds. You can verify that escrow is funded before purchasing materials or scheduling crews.
- Protection Against Unfair Non-Payment: If you fulfill all written deliverables in the quote, Ratedeed’s dispute policy protects your right to receive earned milestone disbursements.
Frequently Asked Questions
When does the contractor actually receive the funds?
Standard ACH payouts arrive in the contractor's bank account within 1 to 3 business days after the homeowner approves the milestone. Contractors with instant payouts enabled can access funds within 30 minutes.
Can a contractor withdraw funds without my approval?
No. Funds held in milestone escrow cannot be withdrawn by the contractor without explicit homeowner digital authorization or a formal dispute determination issued by the Ratedeed Resolution Center.
What happens if I am unsatisfied with a completed milestone?
If work does not meet the agreed specifications, do not approve the milestone. Send a message to the contractor in the job chat detailing what needs to be fixed. If the pro refuses or cannot resolve the defect, you can open a dispute to freeze the escrowed funds and request mediation.