Should I expect a discount from dealer for buying and installing complete system

No I don’t think think $3000 is fixed, it has to be guesstimate until they actually go under house and into attic. Also I keep adding what I want done. I am going to add Bluesound Node 2i and also I want my 55” tv mounted in bedroom and bedroom tv mounted in my son’s room. 
They will patch and paint
i don’t know anything about support for cabling and sealing. My assumption is that they will do what needs to be done
We have discussed having them see what the labor will be to wire the back speakers. If the labor is close to the cost of adding $350 amp and$250 transmitter for wireless I would prefer paying for wired. 
The owner came to my house and saw the work that needs to be done but he did not go under the house or go to the attic. 
As I have said all the work had been done when the room was frame so it may not be as straight forward as he thinks. 
If the installers find that the installation is complicated and the price of the install goes up a lot I may not want to go ahead. The problem is he won’t send anyone out until I sign contract and pay half. Is there any way of protecting my self from a big increase in labor that I may not want to pay.  Would it make any sense to pay him $250 before signing contract to have workers come and give me a true estimate. If I agree I would think I could apply the $250 to the labor. If I doesn’t  agree he would keep the money.

No I don’t think think $3000 is fixed, it has to be guesstimate until they actually go under house and into attic. Also I keep adding what I want done. I am going to add Bluesound Node 2i and also I want my 55” tv mounted in bedroom and bedroom tv mounted in my son’s room.
They will patch and paint

Without a hard labor cost I would recommend a cost plus not to exceed price. That allows the Dealer some room for sight unseen, unknown, problems his men may run into. It also means if everything goes better than estimated you are only charged for the actual time the men were there.

The owner came to my house and saw the work that needs to be done but he did not go under the house or go to the attic.

No way he was able to give you a labor dollar cost. He just shot you a by the hour cost of $250.00, (2 men), per hour rate. What ever it takes to the job that’s the price you pay. How well do you trust the Dealer?

As I have said all the work had been done when the room was frame so it may not be as straight forward as he thinks.

He thinks? Unless he spent some time investigating the existing cabling rough-in he doesn’t have a clue how it is done. Did he pull any cable jack, or cable pass through, wall plates to see if the cables were just pulled raw cable through bored holes in the wall studs? Or was conduit installed or smurf tube (ENT) and the cabling was pulled in that? Size of conduit/s?

How deep is the crawl space under the house? 12"? 18"? 2ft? 3ft? ???
How much space is there for a man to move around in the attic. Any duct work in the attic? How deep is the blown insulation?

If the installers find that the installation is complicated and the price of the install goes up a lot I may not want to go ahead. The problem is he won’t send anyone out until I sign contract and pay half.

The Dealer has given you a quote for the equipment, 65" TV, speaker stands, and cables. Agree? He should also be able to give you a price for installing the equipment, hooking it up, calibration, and showing you how to operate everything. Same for installing the 65" TV. Same for the relocation and installing the existing TV.
You and the Dealer should be able to agree with the dollar amount for all of the above. Agree? If he wants half up front just say you do not have a problem with that providing the audio/video equipment is delivered to your home and not held at his store. That’s fair isn’t it?

As for the hard part installing the concealed cabling. It sounds like, he thinks, you are agreeing to pay him $250.00 (2 men) by the hour for the labor cost to do the job. No cap $$$$. You are just paying the dealer by the hour. If you sign the contract you best understand what you are agreeing to. To be honest it’s not unusual to pay by the hour for installing cabling with your type of situation. The dealer doesn’t have any idea what his men are going to run into. Do you trust the Dealer?

The problem is he won’t send anyone out until I sign contract and pay half.

I wouldn’t sign anything until you understand exactly what you agreeing to.

Maybe the Dealer charges a fee, hourly rate, for estimating labor to do a job such as yours.
If that is the case does he need to send two men to do that. But maybe he does. I find it hard to believe he doesn’t have a job install estimator. Apparently people trust him enough to pay him for his services by the hour. $250.00 per hour....... That’s a decision you will have to make.

Would it make any sense to pay him $250 before signing contract to have workers come and give me a true estimate. If I agree I would think I could apply the $250 to the labor. If I doesn’t agree he would keep the money.

That’s up to you.... It’s your money. Just a guess it could take 2 or 3 hours. Depends if the guy the dealer sends out knows how to estimate the man hour labor for a job. And there is a very good chance the time clock starts running when the truck leaves the dealers install shop.

i don’t know anything about support for cabling and sealing. My assumption is that they will do what needs to be done

Rule #1, never assume anything.

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I’ll add that despite the fact I haven’t done any major home theatre stuff in a while, I’ve had work done recently, including ethernet stringing, wall punching and routing, by an A/V contractor here in Austin, based on a flat rate. He went into the crawl spaces, did his due diligence and the quotes were reasonable. I’d definitely use this contractor again.
Ditto on major electrical work- though that may be different. When I had the sub system set up for the hi-fi in my new/old house in Austin, flat rate quote for the equipment and install, including parts and cabling. That was a serious job, including pouring a slab for the transformer, lots of cable pulling-- they did the hole punching, it was up to me to bring in someone to patch sheetrock and paint.
No issues over price, because it was all laid out up front. If there are variables, those should be identified up front.

He did have $3000 on proposal for labor. We agreed that if the back surround can be reasonably done by going under the house we will so the labor would go up. Other than that looks like $3000 is the quote which I find very reasonable for the amount and difficulty of the job. This business is known to be as high quality as you can go. I have no doubt that the job will be perfect. 
The owner keeps trying to save me money. He suggested today that instead of going ahead with buy two Paradigm speakers for close to $800 plus the labor why not just see how it sounds with my 2 front ceiling speakers. He said if I don’t like, I can always have the speakers installed. I think I will just go ahead and have the speakers installed 

My view is that if a dealer is providing the level of service and demo opportunities that this one is giving you then that dealer deserves compensation for that service. Paying list price is that compensation. I know you intend to buy from him whatever, and all credit to you for that. I find it very discourteous when people demo at a dealer and take advice from a dealer and then go and buy the goods at the cheapest price online. And then these same people express disappointment that there are few high street audio dealers left.