The $3500 sounds like a design fee to me, if they are doing drawings and contract documents.

They are estimating that a project of your scope will cost $64K based upon their previous experience with such projects . You can get other estimates to compare to the $64K, but what they are saying is until they have the design nailed down that's the only estimate you are going to get, and they aren't going to do a full design for free.

ditsyquoin:

You are being "qualified". Don't fight it.

If I were going to spend several days working up a detailed design and estimate for a client, I'd expect that client to be comfortable with coming up with 5% of the job up front. If I got the job, I'd apply the 5% to the job.

Let's say they get no fee and turn over the design and estimate. You get to ink out their numbers and take their day's worth of work to shop their specifications and design to competitors who get to plug in numbers in hours. Sounds great for you and sucks for them. Not that you'd do this, but I'd never give you the chance if it were me.

Sounds about right in both figures and in business practice from a good businessperson. He's got enough work and is well regarded enough that his time spent doing a very detailed scope of work document (basically a the only thing it lacks to be a contract is a signature) is as valuable as his time spent perfoming that work. He's right.

Okay, You have reassured me that this is a normal estimate. I was hoping that I would get an estimate that detailed the preliminary specifics of the work to be done-like which wall between the kitchen and dining room will be removed, and what type of flooring is included within the allowances.

So I pay the $3500.00 and hope that we will have a meeting of the minds before we sign a final contract?

I'm not sure I'm going to agree with others at this point. Did he base his estimate on information that you gave him - a preliminary layout, which and how many walls you want removed, the type and number of cabinets, countertop material, flooring material, etc. or did he pull the estimate out of the air or some other place. While I can understand that he doesn't want to put in the effort of a detailed plan at this point, you need to feel comfortable with what you're going to get before plunking down $3500. Do you feel he has sufficient information about your wishes that his estimate is reasonable or are you willing to gamble the $3500 and walk away if necessary. Has he put any bounds on the estimate (e.g. +/- 10%). what if his detailed estimate comes in at 100K - things like that have happened to others on this forum. Personally, I'd get some other estimates before plunking down that much of a deposit.

Do you get to keep the plans and drawings if you don't have a meeting of the minds? If, as palimpset suggests, the $3,500 is a design fee, you should walk away with the designs regardless. But it doesn't sound like that to me and they don't call it a fee for anything ... they are calling the $3,500 a "non-refundable deposit" on the entire job. They don't get the entire job, you don't get your money back, and it doesn't say you get anything at all for that money should you walk away. Seriously, if you have to guess at this, it isn't being spelled out well enough and you should ask THEM for clarification IN WRITING. $3,500 is a huge chunk of change to be tossing out there for a non-refundable deposit. Here there are limits as to what a contractor can charge for a "deposit" on a job.

Your contractor states, "The detailed proposal includes plan review and/or drawings, costing and budgeting, contract documents, and schedule. During this process, we spend a considerable amount of time designing, researching costs, meeting with subcontractors, etc. to insure that everything is accounted for."

Maybe instead of "hoping" for an "estimate that detailed the preliminary specifics of the work to be done-like which wall between the kitchen and dining room will be removed, and what type of flooring is included within the allowances," you could just ASK them for that. Maybe what you need at this point is not as detailed as what they want to give you, but something simpler that shows you are all on the same page. I would think that the time to have the "meeting of the minds" is NOW, not later.

While the estimate may be reasonable, you need to get a couple more estimates. Some people will force you into a non-refundable deposit, some will not. Some will add a not-to-exceed clause in an estimate, some will not. These things don't really relate to the quality of the work you could expect to receive, more just to the billing terms.

If a contractor has more business, he may be less willing to give you really good terms because he has options. That doesn't necessarily mean he would do the best job. I would get a few bids and compare them across a number of dimensions.

Getting additional bids without specifications is pointless. How can they be compared? They can't.

Y'all are missing that the OP already had the estimate. Similar past projectt levels were shown, and a preliminary budget was discussed for the SOW. I'm not quite getting the thing about ''which'' wall would come down, as that should have been a fairly straightforward question from the OP in the beginning phase of exploring a project of this level. At this point, the OP is either comfortable with the budget expressed, and comfortable with the contractor, or, they aren't. If the budget is a stretch, there's nothing wrong with asking for another meeting to talk about reducing that scope of work to bring the project costs down. But, the contractor isn't going to produce deailed documents that can be used to take elsewhere without compensation for the time spent doing that. That usually signals two things.

One is that the contractor is good enough to be in high demand so he wants to spend his time doing that work, not chasing jobs that he won't get.

Second, that the OP is giving out a vibe that this isn't likely to be a viable project. Maybe they had extreme sticker shock about what their dollar would buy. Maybe they gave off the vibe of not caring about quality details, and only about the lowest price. Maybe they haven't done their research at all about anything to have some preferences and ideas. Either way, the OP isn't ready to move forward. And neither is the contractor. The OP can certainly interview more contractors, and probably should. But the first guy, if his references and past project portfolio checks out, is likely to be a very good candidate for the project that is desired tobe completed. The OP, is less likely to be a good candidate for the job that the say they want done.

As I understand it $64K is the estimate to now compare to others.

You could, in order to directly compare estimates, have the design fully developed by an independent designer or architect rather than by one of the builders under consideration. Pay for that separately and use those documents both to bid the project and as construction docs. Ask this first builder if they will work that way and not commit you to this other deposit.

One of my favorite contractors will, but charges more for projects where they do not control the design process.

You said you used the contractor before & trust him. Why don't you ask him for more specific information that wouldn't involve drawings or detailed documents. Get a few of your questions answered before committing $3500. What type of flooring, countertops & cabinets, etc. are typically included in the "previous projects of a similar scope". Or what are the allowances for those items.
I wouldn't commit $3500 unless I was quite sure this was going to be my contractor. Interviewing other contractors will convince you, one direction or the other.

I disagree with the idea that a contractor who asks for a non-refundable deposit is in any way a better fit for a proposed job than one who doesn't.

In my particular case, I had two estimates. One from a contractor who normally did much larger jobs, and one from a contractor in which my job was in his sweet spot. The first contractor bid over twice what the second contractor did, and also asked for a non-refundable deposit. While getting estimates from his subs, the first contractor's electrician estimated $30K just for his work -- this in a place where I had already done an electrical upgrade. I found out later that his rationale was that if the job was any less, it wouldn't be worthwhile doing.

The idea of a non-refundable deposit is not an indicator of quality. It is an indicator of the GC's desire to mitigate risk. That's not related to the level of fit for your project. People have to do their homework in understanding different contractors and how they operate -- this industry is not one-size-fits-all.

Well said, calumin.