Renovations

Some charge by time and materials. Some charge flat fee. There are advantages and disadvantages to each. I had a flat fee arrangement because controlling costs was essential to me. We ended up completing a gut reno within 3% of budget. I was on sight twice daily and watched over the job like a hawk. I had only 3 minor change orders (Upgrade electrical supply for few hundred, add one light switch, add extra valve in bath that had been left off plans accidentally. I also had excruciatingly detailed plans that I paid a fair amount for. There was zero left to chance or to be determined as work proceeded. Every tile and moulding and hinge was precisely specified. The downside to such a flat fee arrangement is that if the GC realizes he underbid the job, they will struggle to either cut corners or find ways to create a need for change orders or whatever change orders legitimately crop up he'll charge you a fortune for.

Time and materials just makes me nervous because it seems so open ended, but perhaps someone who has used this arrangement can speak first hand of the +'s and -"s.

kw, Was the flat fee a percentage of the overall cost of the job?

No. I refused to pay a percentage on an expensive appliance or tile that took the exact same amount of work to install as cheaper ones. The final cost of job probably came out about the same as a percentage based fee for architect and GC, but the idea of percentage made me nuts and I insisted on only flat fee arrangements.

Contractor got very, very detailed drawings with nothing left open and he bid the job accordingly. I understood that if they opened a wall and found some kind of surprise that impacted the job that would require potential additional cost, but that never really happened.

Perfectly reputable GC's and architects do work on percentage basis, but some agree to flat rate. My architect was from a substantial firm and yet gave very fair flat rate divided into phases of services rendered. GC was quite reasonable and fair (although I watched him like a hawk) and in the end we all parted very much friends. If you need referrals, let me know.

Kyle, how did you pay your general contractor- in weekly or monthly installments? Is that possible? Did the contractor require a certain percentage of the flat fee upfront to begin the gut renovation? Also did you purchase the tiles, bathtub, vanity, etc. yourself or did the contractor get the tiles, etc. on your behalf? You're correct about the downside of paying a GC a flat fee- my brother gutted his house and the GC walked after completing half the renovation when he discovered that he had underbid the job.

kyle, excellent advice and insigth, Thanks!