I only a have a second as kids are about to melt down. My former GC (had one when we started the whole house reno, but let him go) had a set percentage, about 17 percent if i remember right. so of our dollars spent went up or down, his cut went up or down. I've never heard of what your guy is proposing. I wouldn't like that.

What happens if you spend more? Will his fees increase?? I'm guessing so. That's not right if the fees won't go down for spending less. I'd look for someone else who won't charge you a 50% overhead.

A flat fee for the cost of the job is actually more budget friendly, as it allows you to choose higher priced materials without paying additional fees based off the the cost of materials. The labor costs remain the same for the same job. In any remodel situation, the labor cost are the bulk of the job, not materials.

However, the fee should reflect the actual project that is spec'd, not some mythological "problem laden" situation. The remedy to finding problems when renovating is having a change order procedure in place so that you can then can understand what each problem will cost you. If foundation damage is discovered during demolition, then work stops while the cost of that job to be added to the rest is assessed and put into writing and signed off by both parties. It might actually end up costing you more money this way if problems are found, but at least you have individual control up front over more cost estimating.

That's why it's vitally important to have a high contingency budget in a remodel situation. The older the house, the higher the contingency fund should be.

I think it sounds outrageous. I would never pay someone $25,000 for an $85,000 project. What is involved?

Sometimes they price by neighborhood or what they feel your income level is to be able to afford. Or maybe if they think you are too naive to know any better. Are you also buying products through him? He gets to mark those up too by getting contractor pricing discounts.

depends on where you are located. We charge anywhere from 15-20% for remodels and I am in central North Carolina. Now we always do it as a fixed fee so there is no thought that we could or would run up the expenses in order to make a greater fee. 30% seems high but if that is what he charges then good for him...I might look elsewhere for another quote but remember cheaper does not mean better.

Travis Alfrey
Aberdeen, NC

Thanks for the input thus far. I would love to hear more. I am thankful to be learning on this end of the project, when no money has be spent.

Cribbs~ we live in Texas.

Live_Wire_Oak~ The GC mentioned in the initial write-up that change orders are cost+20%. Is this essentially "double billing?" Meaning that he wants to charge a higher percentage because remodeling presents more unknown problems, but will also charge an extra fee when/if the problems arise.

Samantha111~ The large items of the remodel are:
We are gutting and remodeling the kitchen, removing 4 structural posts (thus having to add 1 or 2 steel beams), closing off the exsisting two story tall living room so we can have a playroom upstairs, and replacing windows with 4 french doors off the back of the house.

You are correct in thinking that fee doesn't work our right and that you are being double charged for change orders. Keep looking because I also live in Texas and the contractor we used last winter charged cost+20% and we determined the cost prior to starting construction. This was new construction, but you should still be closer to that level.

You are having a lot of work done and there will be unknowns, but that's even more reason to work with someone who can estimate better from the beginning. There are a lot of issues with his approach of focusing on how much he wants to make right off the top. Where's the performance incentive here, what happens if it takes less or more time?

Too many issues with this guy, move on because this situation will only get worse.

It's very common for change orders to incur a 20% fee on top of the actual costs. It's partly to keep homeowners from changing their minds mid stream and the contractors having to reverse direction on things that have already been planned for. One alternative would be to negotiate "hidden damage changes" at cost only, while decor or "buyer's remorse" choices remain the standard 20% fee.

I would have to caution you that your quoted price seem way too good to be true for the amount of work described. 85K for all you have described is at least 20K under where I'd expect a project like that to come in, and that's in a cheap labor market.

How large is the kitchen? Are you using moderately priced cabinetry and appliances; or custom and high-end appliances, for example? How is the two-story being closed off?

"trust your gut. if he does not feel right, move on. i had to fire a cabinet maker and it was a huge hassle and when i thought back on it, i had a funny feeling about him. wish i had listened to my gut."

This is so true. Things will probably get worse.

Samantha111- here is an older layout of the house to show the kitchen size and the living area that we will close off. I am not sure what you mean by how we are closing ithe living room off. I had a structural engineer come in and draw the plans for what kind beams, etc. are needed. The cabinet initial quote was 11,000 and I had my husband look up appliances and his total came to 11,000. (installation not included.)

I live in the Midwest and my GC's price was 16,000 and included permit fees, demolition, lumber, rough carpentry,electrical- complete rewiring of kitchen and installation owners fixtures, rough and finish plumbing and including sink, garbage disposal,soap dispenser,air gap, air switch and strainers (quality items that I picked out), drywall and finishing for ceiling and other areas opened up,and installing ovens,range hood, cook top and refrigerator. He is a perfectionist and so were his subs. Everyone showed up when they were supposed to and the job was completed within 5 weeks.
It sounds like you should be looking at other GCs to see if his charges are usual and customary for your area

"closing off the exsisting two story tall living room so we can have a playroom upstairs"

I'm wondering what is involved in this. It's hard for people to gauge a project cost or complexity involved with just the financials.

Samantha111- You're right. Unfortunately, I wouldn't be able explain it better if I tried. Although the GC and crew have looked at the structural plans and grasp the concept and extent of work, I get lost in the lingo. My only way to safeguard my unfamiliarity in that situation is to get a second opinion.

One insight is perhaps he is charging as a scope of project. Whether we go cheap on material, etc it does not change the amount of work involved.

They're putting a ceiling or upper level in a cathedral ceiling type of living room?

Samantha111~ Yes. The current living room is two stories tall. During the construction they would create a new, lower ceiling for the living room. The end result would be changing a room with a very high ceiling to two rooms with ceilings of regular height.

Is this normal? Well, there's really nothing normal. Every contractor does it differently. I wouldn't sweat it. If this is just one of the GCs bidding, take the quote for what it is and compare it to the others that come in. Who knows, even at his seemingly outrageous rate, he could come in lowest. You should only be worrying is this is the ONLY guy you're getting bids from. In that case, shame on you for not looking out for yourself. You owe it to yourself to get more bids. Try to get at least 3 or 4 bids before you need to worry about any individual bid.

I agree with the PP in that you absolutely need to get multiple bid estimates for a job of this scale.

The scope of your project is so major you should try to find someone who has completed a similar project. This type of project requires specialized skill and no matter what they tell you check out a finished project first.

This is really a job for a home builder with experience in renovation/addition projects. They will need to know a lot about construction.

11K is low for a kitchen with 11K worth of appliances. As a rule of thumb, in a redo with no changes, the cabinets should be 50% of your kitchen budget (5% of your home's cost) and appliances around 25%. With the average kitchen redo approaching 40K, that would mean that 20K worth of cabinets is about average in an average 400K house. So you might want to look at how your choices work with the neighborhood values because you do not want to be significantly under or over what your neighbors have.

As far as your quote goes, I also find that low if that includes all of the kitchen components. If that's just for the structural changes and plumbing and electrical associated with the kitchen remodel, then it's probably about right if you are in a medium to higher priced labor market. You've got to get at least 2-4 more quotes though.

This is a very involved project, as the drywall has to come off of the downstairs room, and the new floor joists tied into the framing at the correct level and the existing walls reinforced and the foundation under those walls will potentially need to have footings engineered to carry the additional weight. A structural engineer will need to be consulted to be design this. Then, once the joists are in, the HVAC will need to be reengineered to deliver the proper heating and cooling in a pressure balanced manner. New electrical will need to be run in the walls, a closet created, and then drywall hung and flooring laid.
And then there's all of the other structural issues that you are having done, plus a complete kitchen remodel. You'd better stock up that liquor cabinet now!

Casey, your plans look great.

Does the total from which he computes his percentage include cabinets and appliances? If so, why should he be paid more if you opt for glazed cabinets (or other upcharges), versus standard? A wolf range versus a G.E.?? Doesn't seem to make much sense to me! ((I guess that's why I ended up acting as GC on my first kitchen remodel)

His reasoning was that he estimated the project would take 4 months and his overhead is roughly $6,000 per month. So will he be spending 100% of his time on your project?

If I were paying 100% of someone's overhead, I would expect to get their complete, devoted, undivided attention.

Keep looking.

Greendesigns- Thank you for your input, that makes a lot of sense.

Lazy gardens- My thoughts exactly.

I am meeting with him again after the holidays and will also meet with another contractor as well. In the meantime, I am just trying to gather as much information as possible now to try and reduce regret later!

I'd also recommend that once you get your bids together you take a look at the value of your house, the neighborhood and your future plans to make sure you can justify the cost on a long-term basis.