Fixed price vs. time and materials for basement remodels - which side do you actually stand on?

I keep seeing guys bid basements as fixed price jobs, then get burned when they find knob and tube hiding in the walls or a floor that's way off level, while the time and materials crowd claims they make more profit per hour but scare off customers who want a solid number, so where do you really fall after dealing with a job like that last month in my town?

2 comments

2 Comments

grantmartinez13d ago

Fixed price with a fat contingency clause for surprises?

the_lucas12d ago

I've seen fixed price contracts blow up more often than they work out, @grantmartinez. The problem is that contingency clause can become a battleground when the homeowner argues something was "obvious" and not a surprise. In my experience, you end up eating the cost just to keep the job moving, especially if you're dealing with old houses where every wall hides something. My buddy had a 20% contingency on a kitchen reno and still lost money because the client fought every change order.