Remodeling/Construction Process - Help out this newbie

[Anonymous]

We are renovating our basement - installing inside stairs, knocking down a wall and reconfiguring a kitchen, remodeling a bathroom. We found a company we're interested in working with, but they want a deposit with a letter of intent (which states general scope of work and budget we are looking to work within) before they give us a detailed estimate. Is this the normal process for this? We're just worried about handing over money before having a more detailed estimate and scope of work. At the same time, I understand it may be difficult to have a more detailed estimate without knowing the exact plans (we need to move utilities around and we're not sure where they will be going at this point). Is this a normal process? We're a bit weary.

[Anonymous]

I would talk to other companies. We just did a massive addition project and our contractor had no trouble presenting us with a bid without our committing money or a signed agreement. I would be wary especially of the letter of intent. How on earth can you commit to that company without knowing the price? I did meet with one other contractor who charged a flat fee for a detailed estimate ($500) but there wouldn't have been any commitment beyond that.

[Anonymous]

I'm planning a project of similar scope and I have found that many firms ask for some sort of commitment to produce a detailed estimate. A general bid, based on the scope of work that you give them, is different and should be free. You need to know whether you are in each other's ballpark.

For the detailed estimate, the contractor may need to get details from trades (engineer, electrical, plumber, etc) and spend some serious time in your house seeing what they would need to do.

How much of a "deposit" do they want? Would it be so much that if their detailed estimate is out of your budget that you could walk away? Is it a percentage of the total project cost?

[Anonymous]

That's not normal. Lots of GC's out there that will provide pretty detailed estimate. I've had 2 jobs done in 2 years and neither company mentioned letter of intent and deposit.