Time to do something finally!

Cost Overruns: After the final payment, the contractor claimed there were additional costs of $60K.

I would need to know more specs on the house but with material shortages It's difficult to say how much to budget. 80K-120K for full gut perhaps but unsure with lumber beings so expensive and shortages.I would plan 9 months of vacancy between the pain you will endure pulling permits & having your contractors show up everyday to complete the work & then final inspections to get a CO. 

I pull all my copies , approved plans from the county , footer inspections , final inspections , AND I found a copy of the code from 2002 . 

The permitting process is expected to take a few months to finalize.

However, if you wrote mostly 4s and 5s, you may want to consider your options.A Final Note About Selling and ExchangingIn our new regulatory environment, a rental-housing owner in Oregon can run afoul of the rules even when trying to sell.

Title company processes transaction and finalizes sale.

It took 3 years, but,  I finally navigated the permitting process and now have all the permits I need to build 6 small cabins on a river in the mountains.

I recommend you pay him the final amount, but get a lien release, in advance, that says if you pay him this final amount, he will have been paid in full for his work and no further liens can accrue.

Then get photos and get third party verification that everything was done right prior to making your final payment to the contractor.