Just received contractor's estimate, now what?

You can negotiate with a contractor to a degree. But your eyes may also be bigger than wallet, and you'll simply have to compromise.

I've overseen a lot of major renos in my places including gut renovation and tearing down big walls and building new ones in new places.

Whenever you have big work like that, especially in an old building, you are going to go over the contractor's estimate. Because once they start ripping out walls they find amazing things they didn't expect--like previous fire damage to studs that was not rebuilt properly, big plumbing with the wrong slope, etc.

If this is a good contractor, your negotiating power is nil. And I say that as somebody who actually has a certificate in negotiation (what a joke, but never mind). The point is I'm not afraid of negotiating. But There was a big storm called Sandy that blew through the area and all good contractors are busy right now.

So The contractor is the one who can easily walk, not you. And btw you do not want them cutting corners if you care about this building very much.

If I were in your shoes I'd either put off the reno entirely, or I'd find the money to do the job right with this contractor with a good reputation. You can get another quote if you want, but make sure the other contractor does a good estimate.

A good estimate btw means the GC brings his electrician, plumber, and demo guy to the job site to inspect with him.

The most important thing you should negotiate and clarify: schedule. There should be a timetable you can discuss with the general contractor (GC). You want to make sure the crew stays on track so you don't go nuts.

HC619,

Here are your ext steps

1. get other estimates to see if the contractors price is at least in the same ballpark as the others.
2. Explain to the contractor that is over your budget and ask him if there is anything he can do to sharpen his pencil. I dont think he will come down 15% but maybe 5%, also ask him if he has any ideas in which you can save money
3. Who is making all the purchases? Perhaps he will save his trade discounts with you which will end up saving you thousands and thousand of dollars

Even good contractors negotiate.

hc6219,
Whatever you receive now, don't be surprised if the final bill comes in at as much as TWICE what you were originally quoted. This happens ALL the time, sometimes for legitimate reasons like kharby2 indicated, or sometimes because the guy just wants to get the job to begin with. Whatever the reason, keep this in mind when getting bids.

Here's the most recent discussion about such a case:
http://streeteasy.com/nyc/talk/discussion/36458-contractor-issues

Also, nobody believes this tip, but I saved thousands of dollars:

Buy your doorknobs, faucets, toilet seats, lighting fixtures, even engineered hardwood underlayment, anything easily deliverable, on Amazon.com.

They had the best prices I could find anywhere for the name brand stuff.

The only item out of a huge list that didn't work out was the Toto toilet that arrived broken.

The biggest headache I had was tile and wide marble thresholds (often called saddles). Many trips to the tile dealer, many, and I was trying to keep it simple. One marble piece had natural cracks visible only from underneath and had to be returned, it was not suitable for saddle installation.

And if you're using marble don't forget to tell your GC, because the tile installer uses a special saw to cut marble, such as pencil accent pieces and flooring.

As most people said:
1. identify the things on your to-do list that you can purchase yourself and then price them out and compare to the amounts on the bid to see if it's cost-saving or not.

2. identify items on your list that are "wants" and not "must haves"; if you split your list into those two types of items, you can probably narrow down your scope to be better within reach.

3. can you phase the work? this is not super desirable as in the long term it's more expensive, but if you can afford to do one floor at a time (ie: the main floor with the kitchen and bathrooms and save the bedrooms for later) it could break it into more manageable chunks of money. but again, this is more expensive in the long run.

HC6219,

You should be very surprised if your final bill come in double of your estimate. Make sure your estimate spells out what you and your contractor are responsible for.

What Primer05 is saying is that preparation and understanding is key. I mentioned an extreme -- usually if the bill comes in over then its by a smaller amount -- but as long as you get everything in writing, breakdowns of costs, etc., you should be fine. What I said was precautionary -- the thread I linked to gives some helpful suggestions to help you avoid such a situation.

Get at least 3 or 4 estimates and don't pick the cheapest! If you are capable, do all of the purchasing (stone, appliances, plumbing fixtures, hardware, etc.) yourself and use the contractor/architect/designer discount. You will save a bundle and wind up with an outstanding job. Good luck!

OK, so we might as well establish the best practices here that serve best interests of the customer and the contractor:

1. Get several estimates in writing.
2. Get your own supplies.
3. How should one pay - 50% down - rest after completion? milestone payments? when the job is done?
4. What prevents us from an oops moment, where contractor realizes that he didn't estimate right and now he is short X thousand dollars?
5. Do we tip workers when we inspect work or do we do all business with GC only?

anything else?

get a lawyer

Nymls,

Be careful not to have in the contract that you will get all supplies. It is ok to supply your own finishes like tub, toilet , tiles, etc. the contractor should get all other materials: Sheetrock, thinset, studs, track, etc.

I wouldn't pay 50% down and 50% upon completion unless it is a very small job. 30% deposit and then progress payments should be made

If the contractor is wrong in his estimating it unfortunately is their problem. If you get several bids that are close in range you should be fine. If you get one bid that is very much lower then the others I would be careful in hiring them

Nymls,

You can tip the workers, bringing in lunch is also a nice way to go

Also look at faucetdepot.com, faucetdirect.com, ajmadison, build.com, lampsplus.com for materials. We decided what we wanted by brand name by looking at the manufacturer's website (Kohler, Toto, etc.). Then we looked at these sites for the best deals. Most don't charge shipping on orders over $100. We've used all these sites and had absolutely no problems. The contractor was very impressed with the quality and prices. If there is a problem, it's easier to deal with these places than on amazon.com since you're dealing directly with the supplier.

Pay the contractor in installments. Make sure you don't make the last payment until everything is to your liking. Reasonable contractors will give you a week or so after they finish for the final payment.