A remodeling contractor I work with emailed this to me and his Remodelers Advantage Roundtable group members:
“This homeowner signed [a] design agreement with a budget range of $90,000 to $95,000, hard-stop. We designed the project to $94,383, then through material upgrade and added feature options they ended at the $111,280, so obviously the $95,000 wasn’t a hard-stop…”
Here are some thoughts on that matter.
The hard stop is rarely all the money available. The key is that you met that stated hard-stop budget and let the client drive the upgrades.
We had a potential client who had a firm budget of $60,000 for window and exterior door replacement work. I told him we could likely meet his budget if we used vinyl products. I asked would he be okay if I provided an alternate for Marvin Ultimate Clad products, which we used often. "Fine" was his answer.
I presented the proposal for the project, with a price of $60,000 for the vinyl products and an alternate that would remove the vinyl products from the scope and add in the Marvin products. That add was $40,000.
He signed the contract and then met with our window and door vendor.
I ask him how that visit went. He said "Well!" and that he wanted to sign a change order for the Marvin products, taking the total contract price to $100,000, which was $40,000 beyond his firm budget!
Always provide a plan and scope that meets the client's budget.
Have alternates that let them shop.
Provide them the opportunity to give themselves the project they really want and for them to focus less on cost.