How Should a Deposit to the Builder Be Handled

[MRgreen]

My question involves a consumer law issue in the State of: WA

Our builder wants to hold our deposit throughout the project (9 months - new custom home) and apply it to the final payment (while incremental payments are coming from the bank). I think this arrangement makes it impossible for me to hold any payment back if things don't go well or are not finished adequately.

Is this a typical arrangement? If not, how would a deposit typically be handled?

[Mr. Knowitall]

How about using a third party escrow service. You can negotiate over any escrow fees.