There are numerous different schools of thought for how to approach design agreements. Some involve giving clients a credit for their design, some do not. Consultant Michael Stone advises contractors offering credits for their designs if they are authorized to complete at least 90% of the work proposed.
Many of our clients disagree and take this language out of the design agreement. Their thinking is that the design work is separate from the job. The client pays for the design work, and then they sign a separate contract for the job. However, offering to credit back the design fee often makes it easier for the homeowner to sign a design agreement. It also makes it easier for them to hire you to build the job after the design is complete.
That credit shouldn't cut into your profit because the design work should be included in the total job price. You aren't working for free.
Ultimately, though, Stone suggests using an approach that best works for your company structure. However, whichever approach to design agreements your company employs, it is important to clearly communicate what will happen with the deposit when the design is complete.
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