I am in the process of a major expansion to my home (more than doubling the square footage). I am working with a contractor that I have known for years and who is a good family friend, so I have no reservations whatsoever about the quality of the work he will do, or the fairness of his billing.
What I am not quite sure on, however, is exactly *how* billing works in a project like this. We started the process, as is pretty typical to my understanding, by him giving me a bid, and he has stated that I don't have to worry about being unable to afford to complete the project because it is a bid, not an estimate. OK, fair enough, but what does that mean for the inevitable unexpected issues that cost money?
As an example, his bid included a certain amount for pad prep work (the number there actually provided by a subcontractor). However, this is his first major project within city limits, and as it turns out city regulations were more conservative than technical requirements, requiring an extra two feet of compacted gravel under the footing. Obviously this is a significant extra expense. So who is *typically* going to be on the line for that? Me? My contractor? His subcontractor?
Also, how do "side" expenses play into things? For example, part of the bid was for "bathroom fixtures". However, I went ahead and ordered a tub I was looking at, paying out of my own pocket. Was that a "bad" thing to do, meaning that I will in essence be paying for the tub twice, once out-of-pocket and again with the bid? Or does it just mean that that portion of the money in the bid will now be available to help cover other costs, such as the aforementioned dirt work?
And what about details that weren't discussed at bid time, like what tile do I want for the bathroom floor - the $2/sq foot or the $15/sq foot? When doing the initial planning we didn't get into the nity-gritty details like exactly which tile or carpet I wanted.
I've asked my contractor this stuff, but unfortunately he's not much of a numbers guy, so he hasn't been able to give me a straight answer, since he hasn't really been breaking the numbers down to be able to say "we bid this much for x, but spent that much on it" - it was more a case of figure out an overall cost for the bid, then start paying people as needed, and hope (well, plan to - it's not like he just pulled the bid out of thin air or anything) he comes out ahead.
Like I said, he's a good friend, and I know he will give me a good deal. I'm actually more concerned with him coming out on the short end of the stick due to unexpected regulations/expenses than with me getting ripped off. Mostly though, I'm just trying to figure out exactly how much I can expect to spend, and if I need to be budgeting extra money for the project over the next few months or if I can *really* expect him to complete it for no more than the bid amount.