Hard to tell at a distance.

Change order?

Permits? (or changes to an existing permit).

Inspections?

It may be a 'go away' type price and they do not really want to do the work.

I wouldn't be adding it for that price, but I suppose it depends how much it means to you. We paid well over 1k to get our kitchen window bigger, and I'm sure a lot of the added price was because our builder didn't really want to redo it.

We were originally told it would cost "a couple hundred" to add a prep sink to our island if we provided the faucet and sink. When it came time to do an official change order and I specified with a garbage disposal, the price for "additional plumbing in island" was $560. We still provided the sink and faucet and we had to pay an extra $100 to the granite place to cut the extra sink space.

Maybe that will help you compare?

That $700 should be $200 tops. Are we just talking adding a fixture next to another fixture? That sounds like something you could do later. Either way, charging that to run 2 feet of pex and no extra drain or vent is highway robbery. I have not plumbed an instant hot before but it seems like it would be a cold line in and of course a cut in the granite ($50).

Even the $200 electrician is pretty high but it may be code required to be on its own circuit. Even then, that is higher than what I have paid for a dedicated circuit - but pretty close.

I'd ask what a dedicated circuit and outlet would cost for future install. That is the only hard thing done later. I'm sure that 1000s are installed on the disposal circuit with no ill effects but code is code.

A $160 instant hot water heater sounds like the kind of auxiliary heater one would put in a laundry room or kitchen...doesn't sound sufficient for a whole house.

I'd go to my local big box store or local hot water heater supplier and find out two things. 1) What kind of electrical circuit do you need to run the thing? and 2) How much would THEY charge you to install one later if you already have the electrical circuit available.

Then I'd probably pay to go ahead and have the electrical wiring done (b/c usually easier and cheaper before sheet rock is installed) but would wait to have the water heater installed till after I moved in.

You can add insta hot after the fact for about $300 all in. I've done it in two previous homes. I picked up the unit at lowes or hd and had my plumber install it. Easy-least.

Terminology matters here.

Are you talking something like the Insinkerator Instant Hot tank that dispenses hot water for beverages. $160 is the lowest ugliest chrome and black one available if that's the case. If you want to get something attractive, you'll need to be in the $250-$700 range. Plus the needed extra dedicated electrical supply line and extra hole in your countertop. $1000 is not at all out of line for adding something like that.

If you are talking about a small tanked (or tankless) hot water heater designed to get you quicker hot water at your sink tap, that $160 gets you almost nothing decent and usable there as well. A better choice would be a recirculating pump on a motion sensor. Yes, you'd be looking at $500-$1000 for that convenience as well by the time the builder ended up with his markup on it.

Hollysprings - I gather the OP was supplying the part but perhaps your are right...

do you know how much electricity those things use?
might want to check into that before you
install an energy hog.

best of luck.