I know one factor that went into our remodel estimate was square footage of the addition and price per square foot that houses are selling for in your area. This isn't exact, of course, but will give you a rough idea of how much it costs to add the additional square footage. Then the additional upgrades to HVAC, electricity, gutters, etc. would be on top of that.

Given that you're adding a lot of square footage and that California is an expensive area, it doesn't sound completely unreasonable, but I am by no means a contracting or pricing expert. It would probably be worth your time to get another bid/estimate just for comparison purposes.

We had about 7 different contractors give us estimates and it varied from $250,000 to $350,000. Some even discouraged us from doing 2 stories because it would cost a lot more. The estimates varied so much that we were planning to forget the remodel. Some even changed our original concepts and plans. We still have sticker shock at this cost because 5 years ago, you could actually buy a house at this price! We are also wary because our mortgage, property taxes, etc will now be doubled in cost.....it's a lot of money for us but hopefully be well worth it. it was either remodel or move...and we chose to remodel.......

Maybe I watch too much HGTV, but I would have an expert tell me what my house is worth today as it is, and what it will be worth in today's market after the improvements. That said, I don't think $178,000 sounds bad. You must also factor in the tear out needed for the addition.

Why the big differences in the costs/estimates? That would be a concern for me. Anything greater than 10-15% bid spread is worth asking about. There were 6 contractors considerably higher than the $178,000 quote for pretty much the same work or did you eliminate some things, hence the lower $178,000 estimate?

no, the 178,000 estimate was the one who agreed to all our improvements. i don't know why the big difference, i guess it's the % they make from the total job. Maybe the contractor I chose is only making 20% profit, whereas, the other contractors are doing 30% to 40%...i don't know.......i read a book that suggested that's how the estimates are made.

by the way, the 178,000 includes the demolition and construction. the only thing not included are the things I mentioned in the 1st post and also the kitchen appliances. I think we are getting a fair price but it makes me doubt our decision because it is a lot of money.....

Yeah, I know what you mean about "what's my house worth"....i think it will increase the value of the house at least another 100,000 to 150,000, but not the full amount....i know it's not a smart move, but we are not planning to move anytime soon and we definitely would like to enjoy the house for about 10 years before thinking about moving.

IF you are not planning a move, then do it. I wouldn't call it "not a smart move" UNLESS you planned to move in the next 2 to 5 yrs.

I figured the $178k included demolition. That's why I thought it sounded like a very fair price.

Be sure and post pics of before, during, and after.

Yes, if you're not planning to move soon then it is most likely worth it. Especially if you assume your alternative is to move to a larger house - then you not only have to pay the money for the more expensive/larger house, you have to factor in realtor costs and also the sheer hassle/worry of selling a house in this market.

One thing you also need to consider are the "ancillary costs" like do you have to move out, or just move some stuff into storage? How will you live in all the mess if you're staying? The schedule seems pretty aggressive to me too, I'm surprised they can do that much in 4 months. Have you checked references? Talked to other homeowners? Make sure you're talking to their MOST RECENT three project owners, not just three owners who have liked them over the years. If there are big chunks of time between the projects, then they're either leaving some out, or they're not as experienced as they might tell you.

Even if you've already signed the contract and are moving forward, I'd still get as much info on them so you're prepared for whatever problems that might come up and how to deal with them proactively.

Are you planning to live in the house for awhile?
What is the house worth now? how much more the house value will increase with the new addtion in case you want to sell it?
I live in the SF Bay area, $178K for what you doing is very reasonable. I am having my 15 x 11 kitchen remodel in March, the estimated cost is $100K, this estimate includes medium price cabinets, appliances, hardwood floor, granite counter top. It'll probably go much higher if we pick more expensive items. Also, there will be another additional $6000 for windows and solartube light, so, $178K is not bad.

we went out with him to see the sites he was working on a couple of months ago and they seem OK. i have driven by recently to see the progress (without him knowing) and it looks like it has progressed reasonably (although it has been raining). so far, i haven't seen anything that would question his competence.

regarding the ancilliary costs - he said we will need to move out 2 months before the end of the project so they can work on the inside (stairs and remodeling the existing bath and adding a powder room). we are planning to squeeze all our belongings in our 2 car garage and stay at my mom's house during that time. we don't have any children, so i think we can live through the mess. the only thing is our 60 pound dog that will not have a yard to hang out in for the 5-6 months.

fyi - the kitchen budget he said he will allocate the cabinets is about $180 per linear feet. countertops will be granite, tiled floors. Is that considered a mid-range kitchen? not sure....the floors for the living space (master suite and living room) will be hardwood (to match the existing redwood original floors). oh, and dual pane windows. i don't have all the details of all the materials, but those are the ones we spoke about. we haven't received the completed job description that would parallel the blue prints yet. they are working on it now. i will share when we get it from him

Your contractor is way, way underbudgeting that kitchen unless you plan to use Ikea. $180 per linear foot will barely -- and I mean barely -- get you ikea in LA area. I live in OC. I've been pricing cabinets around here for months now and anything other than ikea, whether kraftmaid from Expo, or fancy wood-mode or Plato cabs, has been estimating between $450-$600 per linear foot. That's per linear foot of base and per linear foot of wall cabs; islands are a whole different and very expensive ball of wax.

What window manufacturer does your estimate use? Makes a BIG difference. Also, engineered hardwood or solid hardwood?

I would seriously consider getting some other estimates to compare. Sounds like your guy is leaving out a lot of details and undervaluing the project, which will leave you in a huge mess when you run out of funds part way through.

I'm speculating but based on the info above I think you might be in for a rough road. 1st, going with the low-cost bidder is usually not a good thing especially when they are 30% to 50% lower than everyone else. There must be some reasons, either the quality will suffer greatly, or he is really hard up for business, or the contract may be a cost+ versus a fixed price & the end result might be in the $250K to $350K range you got quoted from the other guys, or he will make it up in change orders.

What type contract do you have in place?

2nd, he has already changed his date from 4 to 5 months to 6 to 7 months. That is 50% longer & the ink is barely dry on the contract.

I've never built in CA but from what I've heard, even with the real estate downturn, $200/sq ft sounds pretty cheap there for a remodel which includes the kitchen & master suite/bath which are the most expensive portions of a house to build per sq ft.

Good luck, I hope I'm wrong.

I lived in Calif. for years and for the work being done it sounds too cheap.
Just dealing with the new roof and possible change of roof line will be a huge part of the cost.

Lke sarschlos, I think there are a lot of unanswered questions.

We've been thru 3 major remodels........never once did we have to move out of the house but I just don't like turning my house over to a contractor. As long as they can leave a toilet connected you can stay in the house. I've washed many a dish in the tub and my DH has taken sponge baths in the kitchen sink, so things can be worked around.

BTW, I don't think there's any way he can do this in 4 months.......figure at least twice that.
First and foremost, ask many questions and take a lot of notes! I'd take my time in selecting a contractor................

IF I hired this contractor, I would want to pay as you go and then I would request I pay the money for materials to the supplier of those materials as they are supplied, NOT before. I would not want to GIVE this contractor the money. Others can correct me if I am wrong, and I very well could be, but I'm thinking you could be caught holding the bag if he went belly up or didn't pay for the materials? I've heard of this happening in new construction in my area. You pay him, he doesn't pay his suppliers, or you pay him and he doesn't present the materials you paid for..and poof he's gone. Low ball estimates are not always the best. If he is hard up for work, it isn't good either. He could be hanging on the edge of bankruptcy.

I said earlier it seemed like a fair price, but I think its on the low side of fair. I always question anything that exceeds 10% diff in bid price (said that earlier)....especially a large job or one that is actual construction. If it was simple painting, then no I wouldn't question the diff.

Can't you live in another area of the house during the last 2 months? I don't see why you would have to move out, but then I've never been through this kind of remodel.

I agree with others that your kitchen budget is WAY too low. You can possibly do that but I gurantee you that the price doesn't include things like pull-outs or lots of drawers, which are what make a kitchen usable. Visit the kitchen forum for more info, but even my mid-range kitchen is going to be around $320-$340 a linear foot (which is why I'm considering IKEA now).

Your budget seems fairly low to me so if you think this guy is legit and good quality, just be very careful, review the budget line by line and know what you're getting into. Don't pay ahead of schedule and stay on top of them.

We have a bid for a relatively small 2 story addition for a whopping $350,000 (admittedly inflated with stuff that could easily come out) and the square footage added is only 150 square feet on each floor (plus some other stuff) and includes both a kitchen and a bath. I know you can't compare apples and oranges but some of what you're doing is stuff we included...so it's a pretty big job in both cases. You can see the big difference between your price and our bid. We also had an estimate (not a bid) from a similarly-priced contractor for this same job that was $230,000. Even though the bid we got was 50% more than the estimate, you can see even the estimate is high compared to yours. So, I conclude that something is very wrong with your contractor's budget.

From a previous experience I have found there are contractors who will propose to do obscene things. We had someone who was going to reshingle our house with shingles that were LITERALLY not fit to be put on a barn (I did extensive research on the matter).

That sounds about right. Now add on 25% for "over runs" problems not anticipated, rental of eqpt they didn't know they would need.

We added the exact same thing. Just plan on 25% overrun. That's normal on every job!

Keep us posted.

so how has this gone?

That price is quite reasonable. I'm in with the others in saying it could almost be too reasonable.

Examine the contract, see what allowances there are, and are they do-able.

You offered up cabinets at $180/ft. Is that installed? Go out an make sure that you can find decent cabinets for that price.

Disasters strike when you see a $3000 allowance for 900sqft of flooring. You find that the least expensive flooring you like is $5 a foot and they'll charge $3 a foot to install it. Your $7200 flooring decision just put you $4200 over budget.

Everything can be legit, you just need to do your homework.

If you're not familiar with a "mechanics lien" look into the subject. If you have concerns about his business practices have him and/or the subs sign off when you pay him for each task accomplished.

Mongo

Update:

The city permits took longer than we expected. Unbeknownst to us, the city required us to add fire sprinklers to our house and do a "highway dedication" (basically pay the city $3000 to take away 3' of my front yard)... all this because of the hillside ordinance imposed in my area. All in all, my total permit bill was about $12,000. With that being said, the house addition and remodel started Jan 19, 2009. We decided to move out since we are also remodeling our existing house and didn't want to live with the dust. Boy, we are glad we did because on demo day, it was so dusty that my hair was gray.

So, it has been about 1 1/2 months. They are framing the first and second floor. Due to some rainy days in LA, they lost a total of a week or 2. I think they have made great progress. So far the budget is on target.... except, my husband and I got carried away on demo day and decided to also demo the windows so that we can buy new windows to match the new ones.

Thanks for following up! I hope you continue to do so as your remodel progresses. It's always nice to be able to see how a project develops and it's very helpful to others to see the time line, problems and how they are resolved, and especially the budget and how close the project ends up being when compared to the initial estimate.

You didn't mention whether you chose the low-bidding contractor or not. I assume you did.

Things are strange in CA. The county actually paid us to take land for the street out front.

Forgot to say that I am in AZ.

Also, please post some pics. We LOVE pictures!

Yes, we still went with the lowest bid, although there was one contractor that bid $200,000.

I forgot to mention that the cost did go up with the fire sprinklers ($6,000). So, the new budget is $184K. I will try to post photos later this week when I get a chance to upload....and also learn how to do it since I've never done this before.

We've lived in our 30yo home for 10 years. With time, our wish/maintenance list got bigger. One day I told my wife it might cost less to tear down the house and build what we want!
I guess my point was that we would be better off looking at a more modern home and move on. As we once did, someone else will come in and look past the kitchen with laminate counters and old cabinets, and the other things we would like to replace - decks, masonite-crap siding, flooring, windows... and be thrilled.
We could easily spend $80 to 150k on a house that is (was) worth $225k, with no increase in size. In this market, we could buy a new $300k home for $225k, and have to improve little.
(problem is - we are on a small lake, and the neighbors would hunt us down if we took it with us...)

Ever watch those car auctions on TV? Guys will spend $30k, 130k, 300k restoring a car, and be THRILLED to sell it for 65% of what they put in to it! Houses can be like that, too.

And yes, I realize the OP was about increasing the size of the home, which is different from what I'm talking about.