Well, you could reduce the scope of the project. Instead of asking for a bid for a completely finished home, ask for a bid that gives you a finished building envelope. This means he doesn't have to take so much time to prepare the bid (which should lower its cost).

Right now, your priority should be to get the shell up. This also gives you an opportunity to build a working relationship with him and/or decide you'd like to finish the project with someone else. Either way, you've met your immediate needs and made some progress to get back what you lost.

Thanks to everyone who replied, homechef59's comment was very enlightening. One way or another the bid process is being paid for as the contractor has to be compensated for his services. The experiences of past customers will also be valuable as we make our decision.

Like you, I hate the idea of paying all that money for a bid when there's a reasonable chance I won't even hire them. Feels like a rip-off. Plus there's the risk of the "sunk cost" fallacy--that once you invest a certain amount you are more likely to keep using them. FWIW, one contracting firm I spoke to wanted to charge $1200 for a thorough bid. I ran it past my architect who scoffed and said bids are just the cost of doing business.

FWIW, I live in CA too but not in an area directly impacted by the fire. Remodeling costs--both labor and materials--are sky high, even from last year. I had a hard time finding anyone to give any bid at all--a lot want to do time and materials. (Unbelievable.) Some are booked out so far, they aren't considering projects for the next X months. I got two bids, not paying for either. One that was very thorough. (Sent over subs, the GC even crawled in the crawlspace of my 1940 cottage to identify as many possible concerns as he could). This GC came recommend by my architect; they have worked together on many jobs. The other bid was a half-*ss job in my opinion, and that contractor had been used by my neighbors last year--and they chose him, in part, because he gave the most thorough and detailed bid. So unfortunately, this is a tough time. I can see that they don't want to waste time on bids that won't pan out. So this probably isn't the time to get 6 bids, but maybe do the legwork (as people said above), do lots of phone screens first, vs. bringing them over, and narrow it down to 2 (or 3 tops) and let the contractors know that they are only bidding against one other person.

But that said, since you are building new construction, it seems like the number of unknowns is small, and they and their subs can bid based on your plans (vs. inspecting an existing structure or trying to anticipate hidden problems). Plus they can give allowances for finish materials--that's obvious and easy. Also, doesn't your insurance company have a full-replace-value clause? Unfortunately, rebuilding a replacement today in this high demand market is going to be much more than when the industry was soft. But...for better or worse, doesn't that mean the insurance company ends up paying more???? (Hope so). Best of luck. Sorry to hear you lost your home. That sounds devastating enough, and then having to deal with all of this on top of it. That's really too much. Take care.

Thanks girl_wonder, having others experiences is helping me decide what to do. This contractor is good and he is adapting to market conditions as he should. I will be inviting other contractors to bid and see how their business models work.

Good luck, kjwells54. Honestly, I think what you are going through is a lot. I'm OCD about my house project and it's...optional. Hope you are able to do something nice for yourself this weekend or try some "distraction therapy." Take care.

Sorry for your troubles. Our house in San Diego burned in the 2003 wildfires. Over 90 homes burned to the ground in our little subdivision. We were fortunate to have excellent insurance. There was a huge demand for resources. Since it was a federally declared disaster, many costs were waived and review time was greatly shortened. We and many others went custom for their rebuild. There were also quite a few who hired a local big builder with existing floor plans. Most of those were smaller homes on the same street. The economy of scale and multiple site in close proximity, definitely saved a lot of money for those owners.

I'm so sorry this happened to you. An acquaintance who found himself in the same situation decided to rent in another town for two years. Doing so allowed the cost of rebuilding to return to "normal" levels...just a thought.

"I ran it past my architect who scoffed and said bids are just the cost of doing business."

Yeah, architects are known for spending a day and a half working up initial sketches and turning those ideas over to potential clients for their use for free. Cost of doing business for them too.

Interesting, i work as an estimator in the concrete construction industry. The bids we send out are based on my estimate for the job, so they are one in the same. And no we dont charge for bids, its the cost of doing bussiness, if we dont have time, we pass.

Only in Ca do they charge for a bid. That's INSANE!!!!! They make up reasons to make MORE PROFIT!!!!!!!!!!!!!!!!!!!! It's ALL about profit!!!!!!!!!!!!!!!

An accurate bid is a tremendous amount of sourcing and work. A remodel alone, can take a very experienced contractor a full two days of "admin time:" When done , and well done, it's a process plan soup to nuts, from demo costs to framing, plumbing rough in, electrical etc to finishing. It is also a road map for the lazy guy......who may have scrawled five lines on a yellow pad. Because that's what happens with a good estimate. The customer shops it.

I'd go with someone this organized in a heartbeat, and I'd go with someone who expects to be compensated for real effort. Or, you can always do the legwork for the next 240 hours at 40 odd bucks an hour, so you have accurate comparisons.

More important is this: Has this company ALWAYS charged for this accurate bid? Or is it simply a reaction to the current market? If this has always been their fee structure I say Kudos. And I can even understand it in the now very unfortunately hot market. Not to mention in most parts of SOCAL...... where a million bucks or two and plus gets you a relative "shanty"? Think of it on a percent to the total build and it's peanuts for accuracy..

The builders subs know the market is hot, too.

As to profit? Not sure when that became a dirty word. If folks don't PROFIT.......they can not exist to do the work you want done. End of story. If you don't like the amount of their profit? You get someone who has less profit. Which may mean less of a lot of other stuff as well.

The problem being, what happens when the contractor is busy and the bidder isn't? What happens when the contractor has time to do the bid, but really doesn't want the job? Without some skin in the game there is too much conflict of interests.

In many areas, not only California, contractors charge for full bids, and in none of those areas is it a great idea for the homeowner. At this point, there is enough data on rational economic behavior to know how people act when there is no incentive for success. We understand the motivating power of pay for performance compared to compensated time. There is a reason that C-suite pay is low and C-suite stock appreciation rights are insanely high, because we know that the only way to achieve success in performance contracts is to align interests.

There is a giant difference between paying for the bid on the back end (hidden in the contract), and paying for the bid on the front end. That difference is that the bid isn't paid unless the contractor gets the job. You are removing all incentives for competitive bidding. Assuming it takes this contractor a week to do a bid (which it doesn't as a lot of it gets farmed out), that is still half a million per year in revenues from bidding, which takes significantly less overhead than contracting. That is way too much incentive to bid more jobs, and far too little incentive to bid more jobs competitively.

For those of you that say this doesn't happen, you are simply wrong. We have far too much data on this particular subject for anyone to reasonably object. Aside from that, imagine if a car dealer required a $100 payment in order to enter the car dealership. Imagine if a realtor charged a $5,000 payment before they would show you a house.

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Now this doesn't mean your contractor isn't a decent guy, but even decent people are rational, and rational people are not going to overcome bidding as a profit center.

ETA: Before we get too hung up on the idea that the contractor is busting his butt for free and that isn't "fair," does he pay his subs for their bid workups? Seriously, there is a lot of work in a bid and the lion's share of it is farmed out to the subs and suppliers. Every respectable lumber yard will do plan takeoffs for you, you can just send them a fill-in-the-blank list of selections and they do the full takeoffs for you. How much of the $10,000 are they getting?

Thanks for responding Jan, your comments are helping me put this in perspective. I think with this builder you get what you pay for, they told us right out front that they were expensive. This is not necessarily something to run from, their work speaks for itself. I have had several projects with expensive contractors (compared to what friends paid for similar work), and while expensive, the process was organized and the results were top notch while my friends had conflicts and compromises.

There are snakes in all industries. Most curl up and die in relatively short order. Look for the established ........those with a reputation , referrals, history. Thieves just don't last long. Nowhere does it say the op needs this particular bid. Nowhere does it say she can't ask for it to be deducted at point of signing. Nowhere , and no place, is it NOT considered as a "cost" of business, and somehow, and in some way, just as with a builders insurance premiums......you will pay for that estimate. .........yes, you will. No different than the washed, gleaming, filleted fish you see in your Whole Foods. It didn't come out of the ocean like that : )

Crossing posts above......maybe you have your answer : ) "We're good, we know it, and we charge for it" lol. Good for them, and for you

Explain to me why I am cleaning up a clients kitchen and loading a dishwasher and sweeping a kitchen floor, washing pancake batter off a counter...piling up the mail............as my delivery guys unload a truck of new furniture and I want the damn wow factor.

I couldn't, wouldn't, and don't have folks working with me, who are unwilling to go an extra mile for me/ a client, even when not in their best interest of that moment. Is it in their price of being good at whatever they do? Maybe it is, but I don't extract blood I just want a good job from all involved, pricing detailed, or not.. I'll also tell ya' that kitchen clean up was free. I was waiting for the unload. What should I do? Stand there , pick my NOSE? : ) and tap my toe? Maybe my "hidden interest" is simply to have a client thrilled at finish, and get more referrals? What a sin!!!?

I think your cynicism is showing lol

PS...... no she didn't thank me for the "kitchen magic". She did love the room. She probably figured she paid..........somewhere. Thus no thanks needed. Another big mistake on the part of OH SO MANY . If I face pancake batter again when the curtains go up? Yeah....sayonara to that batter again. While the rods get drilled, and my curtain installer shall laugh yet again.....

OH. MY GOD. : ) omg...........

Whatever the source of motivation, pride in a job well done, profit, conscience morality , kindness, who cares? If the paying customer is HAPPY? The point was example, not a grilling as to motivation, to which I stated the reason/s. Weirdly, I expect that some expect the best in others, and others wait for the worst to rear its head. Apologies for not being totally selfless, in which case I would design for no monetary gain whatsoever, and then be accused of my motivation being simply the love of creating a lovely whatever, which of course ISN'T totally selfless. It would involve self serving pleasure. But it's Easter, so possibly I would be forgiven.

Bry911...surely you have an MBA, reading your post brought me back to a few of my business school classes on management control :)

PhD... In my second career as a college professor I study firm efficiency. I look at inefficiencies created between the market and product delivery.

In other words, I spend almost all my time looking at this exact issue. I currently have two research grants to study this exact thing, goal misalignment. No one works for their clients, they work for themselves.

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I want to clarify, that this doesn't mean you shouldn't choose a contractor whose bid you must pay for. He still may be the best contractor for your job, it just means that the consumer is shouldering extra risk and extra cost. It is simply a mechanism to move all risk of rejection onto the consumer which absolutely creates goal misalignment.

Paying for bids is always bad for consumers, but getting paid for bids doesn't make the contractor bad. Rational contractors will act to maximize their utility, therefore if the market will support paid bidding, they will sell bids. However, whether it is good for the market is a question aside from whether or not he is the best contractor for a job.

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As for the idea that this isn't a problem.

What happens when you don't want the job, but the client really wants a bid and is willing to pay? Do you decline, or do you pull out the, "It is also a road map for the lazy guy..."? We don't really need to explore how selfless you are, we just need to answer that question.

If you would ever produce a paid bid that you didn't want to win, regardless of rationalizations or disclaimers, then there is extra cost for the consumer.

ETA: Again, if the contractor gets prices from subs without paying the subs for that work, the whole argument of being paid for their work collapses and they are just doing it for profit. Let me let you in on a secret, $10,000 to work up a bid is a source of profit for them.

kjwells54, sorry about your house. Glad to hear you will be talking to other contractors and finding out what is customary and market in your area.

For many people, work isn't all about the money. For some it isn't even primarily about the money. Clients typically like to work with professionals with that attitude and vice versa. Professionals like Jan Moyer, Joseph Corlett and others :-)

Hope everyone enjoys the rest of the weekend!

My thoughts... It is currently a supplier's market. As @Bry911 said, there is little motivation for the builder to be monetarily efficient with your build but worse, little motivation for the subs to be monetarily efficient. Not necessarily a good point in the market cycle to build. This isn't an issue of integrity but human nature and economics.

I would consider waiting until demand slows a bit. Stay in a nice flat for a year or two, maybe somewhere you've often wondered if you'd like to live, take your time thinking over house plans, maybe even look at some existing sales for something that might work better for you. There is a risk that prices will inflate over time but I'd guess that you are currently in a bubble that will subside in a year or two and you'd be able to get more house for your money.

" No one works for their clients they work for themselves" Yes, we do. In order to keep working for ourselves...... we must work "for" a client or we will soon cease to work at all. The beauty of a free market. There is no tenure. There are no grants. Just the "hang over the ledge of self employment " and a scary "unemployment" of business failure.. Try it, for a couple of decades, plus..

Just to add based on personal experience, to collect replacement cost insurance pay-out, you actually have to actively replace it. Also, the city will not allow, for safety reasons, you to wait very long to at least demo the property. So you can't wait a year or two in a rental. If you want to purchase a different existing home somewhere else, you would need to demo the foundation and haul it out and sell the land. Insurance will not reimburse you for the land value and may not pay for the demo, unless you are going to rebuild. There were cases here, where the insurance paid out for the loss, but at a much lower settlement amount. If you have replacement cost insurance, which is more expensive than the typical insurance required by the mortgage company, you really have to rebuild to benefit from it. You can rebuild it and sell it, which is what we did. Insurance paid for living elsewhere for a certain amount of time, which in our case was in our new house while we rebuilt for spec. Also, we brought our contractor's team from LA to San Diego and were the first rebuild completed. This was to stay ahead of the demand.

For what it is worth, I think contractors that have been in business for years and do quality work can pick and choose who they want to build for and this fee for the bid gets rid of all the complainers who will gripe about every little detail...it lets you know they have built enough to know what they are doing because they do it for a living...you as a prospective buyer of their knowledge know very little....so you have to decide if you want to part with your money to them or not, but for sure if the bid is that detailed you will be happy with the end result, if not they do not want to work with you because you will be hacking away at the dollar....either you accept their way of doing business or you do not and work with someone else.....is it 'fair'? No it is the way they do business and you can accept their rules or not and move on.

If you pay $10 K for the estimate do you own it? If so, once you have a good detailed estimate for the proposed rebuild, you can use it to shop it around with other contractors, so its not worthless.

That's why they charge the 10K : ) You will "own" whatever quality of work comes from the shopping expedition as well.

Hi Jan - I just got an estimate for window replacement. It was free, they came and measured every window, but they would not give me a breakdown of the window sizes, just a lump sum for everything. Every company has to come here and measure for themselves and suggest the type of window for each situation. So I can't even compare and contrast, or upgrade or change to manage costs. Very frustrating!

"Free" There IS no free. I have a source for sustom shutters.Does he give me the fractions of inches when I send him to measure and quote those or any other treatment? No he does NOT. How long have we done business? Forever!!!!! Would I shop the estimate? No. WhY? Because I have relieved myself of a possible mis measure goof. I know if something is wrong, he "eats' AND RESOLVES the issue. He installs, I pay,. Happy customer. End story. Not "free".

Replacement windows are often very different than the original window. An exact replacement may mean custom, exterior work, scaffolding up two stories. A "replacement" may mean a little less glass, and a simple pop in from the interior of the home. You must decide, and have explained to you the differences, and then have all bids quote the same option, same quality etc.. Rather than have a "window guy" come out? Get a very good general contractor, have HIM EXPLAIN YOUR OPTIONS...... and have him source the option you select..

Although I am licensed for general contracting in Florida, I do not practice. If I did, I would not bid. If I could not sell my reputation, I wouldn't deserve the work. I can't conceive of letting my competitors set my prices. They could all be on the road to bankruptcy for all I know.

I guess I would start by getting bids from ther forms first before deciding if you want to pay to work with this one. We tried to put an addition onto our last house but the city was very unreasonable with setbacks and we moved to a different one. Before we came to that conclusion we had visited finished projects from 4 design-build firms in our metro area. They all provided free estimates with varying degrees of detail. To see actual drawings/plans each firm varied widely at a price point.

One firm was kind of pie in the sky and made grandiose statements about what would be in our budget and talked about how selective they are with taking on clients. They wanted $10k for conceptual drawings, although a rough estimate with line item expenses was provided for free. A second firm gave a marketing pitch, asked virtually no questions, and said we would see detailed budget and drawings for $4k. A third firm asked great questions, and presented us with 3 actual drawn plans at the second meeting that were within our budget with line items. They showed us the drawings for free. It would have cost us $1k to keep the drawings. All of these fees would be “applied” to the final cost. I thought $4k and particularly $10k is steep before seeing any drawn plans.

After this experience in our current home, I’m planning to pay an independent kitchen designer for plans and then shop them to contractors. Obviously this is a lot different than entire house build like yours.

suzyq53

If you pay $10 K for the estimate do you own it? If so, once you have a good detailed estimate for the proposed rebuild, you can use it to shop it around with other contractors, so its not worthless.

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First, the answer to your question is it depends. If the contractor marks a bid as confidential then you can't shop it around without committing a crime. Note, this is more than a tort which you may also commit. Simply because you have paid for it, doesn't mean you really own anything. I just opened up some bids received recently on a commercial project and every one of them is stamped confidential.

Next, please understand that a bid is not an estimate, it is a firm price offer. Once accepted, it becomes an accepted offer for exchange of consideration, and assuming both parties have capacity, it is a fully executed contract. The actual contract establishes the terms and conditions of the bid, but the price itself is established in the bid.

Another way to say this is a bid is a price check. It is essentially no different than going to a yard sale and asking someone how much they want for an old television. That person could find a parts diagram of the old television look up every single part and give you a replacement value and fair value to establish their price and finally tell you the price for the entire television is $5. That doesn't mean that you can find the same television at another yard sale and get that price.

I find it highly unlikely that any contractor is going to forego their profit and simply accept the bid of another contractor. If the going rate in your area is $10,000 per bid, then expect to pay $50,000 for 5 bids. If your first guy doesn't mark his bid confidential then you might be able to get the other ones down to $8k each, but I am more than a little skeptical that one contractor is going to accept the bid of another without reworking it.

You will "Own" the information. You can delete every identifying thing, and re type it. Try proving who "owns" what. The builder knows that, hence the charge.

Notice how that kitchen cabinet place never hands you the cabinet plan until you have signed for the cabinet order and written a deposit check?? Not even for one second? Yeah............exactly.

To the OP, be aware of the problem I am talking about. Honestly, it would change the way I vetted and selected contractors, being sure that your contractor wants to work with you becomes pretty important. That is the key piece that is missing in this situation, so try to ensure it is there some other way.

JAN YOU WIN!!

Believe the earth is flat, believe you can fly, and believe that conflicts of interest don't exist for good people. I just don't care.

You chose not to address any of the questions I raised, I am not going to continue to dance around this. If you want to have a discussion about why it is a problem start with addressing those, if not let's stop the dodge ball and move on.

If it’s $10k then it’s not a “bid” but something else. The word “bid” implies that the contractor BIDS and not charges.

Whatever! : ) Bid or estimate tend be used interchangeably by anyone other than attorney and professors. I shall sue my highly skilled contractor who occasionally gets "out bid": ( his term) , has yet to go to court over it, despite the hours put into the accurate and highly detailed estimate, and has also yet to sue me for referring him to a fun but useless endeavor for which, in that instance, he was not specifically compensated by any more than my pat on his back. Most also state, due to every detail being impossible to know , many finishes unknown? " Based on information provided at this date_____" lol. So unless we're paving the street and know the product, they're all estimates anyway, just as the bid for the op stated. "within 10%. " Happy bunny day : )

Just to complicate things, we also have proposals here. So quote, bid, estimate and proposal. My window replacement estimate, is a firm bid until a particular date, but indicates additional expenses may be incurred based on "field conditions".

Jan just to be clear I currently have a mixed use warehouse development under way. Additionally, I was a licensed plumber and grew up working bids for my father's plumbing company for which I still do work. To be fair, most of my experience is in commercial contracts and developments, but I can tell you for damn sure, if we could charge for bids, I would have went into the family business.

"One firm was kind of pie in the sky and made grandiose statements about what would be in our budget and talked about how selective they are with taking on clients. They wanted $10k for conceptual drawings, although a rough estimate with line item expenses was provided for free. A second firm gave a marketing pitch, asked virtually no questions, and said we would see detailed budget and drawings for $4k. A third firm asked great questions, and presented us with 3 actual drawn plans at the second meeting that were within our budget with line items. They showed us the drawings for free. It would have cost us $1k to keep the drawings. All of these fees would be “applied” to the final cost. I thought $4k and particularly $10k is steep before seeing any drawn plans."

All that work by all those people and no one got paid a penny. I can't think of another business where you and your competitors are expected to do work for no money and stay alive. No thanks.

I can't think of another business where you and your competitors are expected to do work for no money and stay alive.

Really, not even one business? Maybe something where you have to pay employees to perform work to maybe change raw materials into finished goods in the hopes that people will value your exceptional quality enough to pay for it. Nothing comes to mind?

Maybe, a business where people dig up the ground, throw some seeds down, water them, cultivate them and maybe eventually something grows from all that hard work that you only hope someone will buy eventually. Knowing that the only guarantee you have is the knowledge that they did last year. Still got nothing?

Ok.

That must be why construction takes so long, apparently you have to pay for the wood before they start growing the trees.

"All that work by all those people and no one got paid a penny. I can't
think of another business where you and your competitors are expected to
do work for no money and stay alive. No thanks."

Uh, plenty of businesses, if you define "do work" as provide pricing, samples, quotes, drawings, technical assistance to architects specifying you, etc. That's a cost of doing business in the construction industry, and my company does that along with many, many others. That's how we increase the odds of being specified: by being helpful and responsive on the up-front stuff. If we made potential customers pay for every hour of up-front help, we'd not survive. Not much different than a retailer who lets you browse, try things on, or test drive things (all of which have a cost to the biz) before deciding to purchase.

If you define "do work" as "make or build something for someone," no, of course we don't do that until we have payment or a promise to pay (PO or subcontract).

If your counter-whisperer business can support the way you do business for your narrow specialty, ("trust me and write me a blank check") then go for it. But to broaden that into a blanket statement that it's common or expected for contractors to get paid for their overhead of providing pricing to potential customers is wrong-headed.

If you can live on a 25% kill ratio, more power to ya.

Large companies with paid employees to provide customer service support for products doesn’t compare to the small business unit of one who only gets paid after the project is completed.

Most contractors are so busy right now, they don’t have time to hold someones hand through narrowing down 9 dozen possibilities to get to the quote stage. If you haven’t done your design work on the front end, all you’re gonna get is the high WAG. Then if you want to explore a real project, you have to put some skin in the game.

No one has time for tire kickers. The pay to bid is generally on the books, but only actually enforced when the prospect gives out vibes of being pie in the Sky, or too cheap to have hired a design professional.

No one is “making money” on bids. It’s just a screening tool among many other screening tool that includes realtor.com, Google Earth, and your local property records. Well prepared people, with specifications, and who are serious, generally do not get charged to bid. They already have skin in the game in the form of hiring a legitimate design professional first.

"Maybe, a business where people dig up the ground, throw some seeds down, water them, cultivate them and maybe eventually something grows from all that hard work that you only hope someone will buy eventually. Knowing that the only guarantee you have is the knowledge that they did last year."

Two thumbs up from this farmer :-)

Whatever! : ) Bid or estimate tend be used interchangeably by anyone other than attorney and professors.

HAHAHA! Thanks for the information. That sure is going to make this weekend's auction a lot more interesting. A bit after everyone goes home I am going to let the auctioneer know it was only an estimate...

While we are at it, maybe someone should tell ebay..

You must pay for any item you commit to buying. Some eBay sellers use an auction-style format, allowing you to bid on an item. Bidding is fun, but keep in mind that each bid you make is a binding contract to buy the item if you win. The same is true for Buy It Now purchases. Not paying for an item after you agree to buy it has negative consequences, explained in our unpaid item policy.

Seriously... Bid isn't a new word and it certainly doesn't change meaning when used by contractors rather than lawyers. In fact, every day someone in America, who isn't a lawyer or a professor, manages to bid and win something on ebay all by themselves, all while understanding that they are not offering an estimate.

I sold the same car on Ebay 3 times. Apparently a

"bid" on a MV or RE is different...

*For motor vehicles and real estate, a bid or offer initiates a non-binding transaction representing a buyer's serious expression of interest in buying the seller's item and does not create a formal contract between the buyer and the seller.*

I sold the same car on Ebay 3 times. Apparently a "bid" on a MV or RE is different...

Yes, that is the funny thing about that whole English language, when you put a modifier in front of a word or phrase it can change the meaning of the word or phrase! I know it seems magical that a non-binding bid doesn't mean the same thing as bid. Think of it this way - "not for sale" has a completely different meaning than "for sale" which has a different meaning than "sale."

Mind blown...

From ebay

A non-binding bid is a bid that shows a buyer's interest in purchasing an item, but it doesn't create a formal contract between the buyer and the seller.

All bids made in the Real Estate and eBay Motors vehicles categories are considered non-binding.

Remember, bids placed in any other category are a legal commitment to purchase the item. We strongly encourage you to read the other terms for more information.

In my case, my "bid" or "proposal" tells what is included and excluded and how much it cost. The "back up"or "estimate" is not part of that. That information is not shared, nor is it for sale.

Unfortunately, reading comprehension isn't your strong suit. What's "magical" is the fact that a "bid" becomes a "non-binding" transaction.

OP, have you checked with other reputable builders in the area yet to see if they charge for bidding your house? If there are builders that provide free estimates or significantly lower priced estimates, I'd consider a couple of those FIRST so that you know what the ballpark SHOULD be. I'd be very hesitant to get only one bid and have absolutely NO IDEA if you're being bilked or not simply because the contractor is busy and knows you likely have cash in hand from insurance proceeds. Given the fact that most homes are insured for far more than it would cost to replace them, there's a good chance you'll get fleeced. As another poster suggested, if possible (depends on your city and insurance requirements), wait out the massive construction inflation and you'll get a lot more bang for your buck.

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On one hand, we are self-employed so I totally understand both sides of the "cost of doing business" of submitting bids to potential customers and the ramifications of being underbid.

On the other hand, as a consumer, I have extreme skepticism for letting a contractor charge me an enormous fee to bid my job with no assurances that (a) He's competitively bidding my job (b) He has MY best interests at heart (which is not mutually exclusive of having his interests at heart, as well) and (c) He even has the intent of performing my job if awarded the contract. I'd make damn sure that IF he bids the jobs and you accept his bid that he is fully capable of starting and completing your job within a specific amount of time and that it is included in the contract. I'd even demand a clause stating that the bid fee would be refundable if the contractor doesn't start the job within x amount of days from both parties signing the contract.