The devil is in the details or the lack thereof. This old adage certainly holds true for major remodel projects.
It truly amazes me when I see some of the Remodel Proposals for 10's of thousands of dollars that are a single page with no details about the materials and products or the scope of the work to be done. And, without any detail plan.
While there is certainly the potential for extra costs due to unseen items in a major remodel you can narrow this dramatically with a proposal that lists the specific products that will be used and a detail listing of all work that will be done.
A detailed proposal takes a lot of time for both the contractor and you. Unless you get involved with the selection of the exact flooring, cabinet, countertop, faucet, sink, etc to be used you leave the price open ended. In over 30 years of remodeling I have always found that the price a sub contractor gives me up front is always less than it would be when he is finished.
This means you are going to have to spend time researching the products you want included so the bid will include them accurately. Changes midstream will add costs and can result in errors. Keep in mind that the details on your project are distributed to all the sub contractors and suppliers. Even when we inform them of a change it may not happen correctly.
Detail plans are equally important. If you are remodeling your kitchen, bath, basement or any other space you need to see that the builder has developed an accurate plan that includes details on wall changes, plumbing, HVAC and electrical work. The plan will be required for permitting anyway.
Allowances are a red flag in a bid. Builders and remodelers are not going to include generous allowances because it will make their bid higher. Pin down everything you possible can. Don't accept 'allowances' for plumbing, HVAC and electrical work or for any expensive products. You may find the actual cost more than twice the 'allowance'. That single page 'ESTIMATE' will be full of allowances for nearly everything and an opportunity for the contractor to radically change the pricing.
Many remodelers will try to convince you that permits are not necessary. Insist on permits and do not let the builder talk you into getting the permit. A builder can only take out a permit on your house if he is licensed and carries the appropriate insurances including liability and workers compensation. Without proper insurance by the builder an injury will be your responsibility for medical costs and any lost time. While permits cause a minor delay for inspections, those inspections insure that the work was done properly before it is covered up with drywall.