How Pros Handle 5 Common Client Budget Challenges
Pros share how they help homeowners get past the most common renovation budget stumbling blocks
Budget is at the heart of every project you take on for your clients, but what are the stumbling blocks around it that homeowners hit time and again, and what are the best ways to resolve them? Here are five common budget issues that come up in renovation projects, along with solutions pros suggest for getting past them. Accompanying the story are beautiful project photos uploaded recently by pros on Houzz.
2. Unrealistic Expectations
Terry Vinn of Totus Construction says he finds clients can be influenced by television renovation shows. “This can result in a costly mistake as clients have often already paid fees for an architect’s drawings or planning,” he says. “They realize they’re way off in terms of their budget.”
Cat Hoad of Absolute Project Management agrees, saying she often finds a budget is too low for the client’s aspirations in terms of scope and finish.
Solution: “Showing clients the best options and the reality of these costs is the best we can do to inform their choices,” Spencer says. “We always let our clients know they can purchase suggested items over time to spread the cost too.”
Encouraging clients to consider phasing the work is another option — tackling phase one now with the initial budget, then phase two a year or so later when the budget has recovered.
Vinn underlines the value of getting clients to engage with the builder at the concept stage of the project. “Builders can explain the cost differences between various design options, preventing the need to go back to the drawing board at a later stage, which would equal additional architect’s fees.”
Hoad agrees with starting the conversation early. “One of the first bits of paid work is to set up an outline budget,” she says. Her outline will have headings with the approximate cost for the various professionals involved and estimated costs for each part of the second fix.
“The total can, of course, change dramatically, but it’s a means for the client to see clearly how their money is likely to be spent, and it helps them to make decisions and prioritize accordingly,” she says.
Terry Vinn of Totus Construction says he finds clients can be influenced by television renovation shows. “This can result in a costly mistake as clients have often already paid fees for an architect’s drawings or planning,” he says. “They realize they’re way off in terms of their budget.”
Cat Hoad of Absolute Project Management agrees, saying she often finds a budget is too low for the client’s aspirations in terms of scope and finish.
Solution: “Showing clients the best options and the reality of these costs is the best we can do to inform their choices,” Spencer says. “We always let our clients know they can purchase suggested items over time to spread the cost too.”
Encouraging clients to consider phasing the work is another option — tackling phase one now with the initial budget, then phase two a year or so later when the budget has recovered.
Vinn underlines the value of getting clients to engage with the builder at the concept stage of the project. “Builders can explain the cost differences between various design options, preventing the need to go back to the drawing board at a later stage, which would equal additional architect’s fees.”
Hoad agrees with starting the conversation early. “One of the first bits of paid work is to set up an outline budget,” she says. Her outline will have headings with the approximate cost for the various professionals involved and estimated costs for each part of the second fix.
“The total can, of course, change dramatically, but it’s a means for the client to see clearly how their money is likely to be spent, and it helps them to make decisions and prioritize accordingly,” she says.
3. Project Creep
This is where additional pieces of work are added by the client as the project progresses, meaning the scope extends and costs go up. “We all know how quickly costs can add up on a project,” Spencer says.
Vinn illustrates the issue with an example. The initial quote, he says, might be $350,000. The clients say the budget is $275,000. So his team works with them on value engineering to bring the spend down to $275,000. But then in the middle of the project, the clients realize that this is the house they want to enjoy for many years to come, so they increase the scope and the final spend goes up to $425,000.”
Solution: “Naturally, we want our homes to be finished to the highest standard,” Vinn says. “That said, the same look can often be achieved by cleverly combining alternative products.” He advises clients to show a contractor what they have in mind and ask for ideas on how this can be sourced, produced or installed in a more cost-efficient manner.
Hoad adds, “We try to avoid the costs of project creep coming as a surprise by ensuring each additional element is quoted for as it arises and that the client thinks about it in the context of the entire project.”
Remodeling pros can use Houzz Pro business management software to track change orders, share proposals and send them to clients for approval.
Learn about Houzz Pro all-in-one business software
This is where additional pieces of work are added by the client as the project progresses, meaning the scope extends and costs go up. “We all know how quickly costs can add up on a project,” Spencer says.
Vinn illustrates the issue with an example. The initial quote, he says, might be $350,000. The clients say the budget is $275,000. So his team works with them on value engineering to bring the spend down to $275,000. But then in the middle of the project, the clients realize that this is the house they want to enjoy for many years to come, so they increase the scope and the final spend goes up to $425,000.”
Solution: “Naturally, we want our homes to be finished to the highest standard,” Vinn says. “That said, the same look can often be achieved by cleverly combining alternative products.” He advises clients to show a contractor what they have in mind and ask for ideas on how this can be sourced, produced or installed in a more cost-efficient manner.
Hoad adds, “We try to avoid the costs of project creep coming as a surprise by ensuring each additional element is quoted for as it arises and that the client thinks about it in the context of the entire project.”
Remodeling pros can use Houzz Pro business management software to track change orders, share proposals and send them to clients for approval.
Learn about Houzz Pro all-in-one business software
4. Unforeseen Discoveries
Vinn says unforeseen discoveries can be painful and cites some examples from his own experience, including a hidden well that needed to be filled and concreted over; properties having inconsistent foundations requiring underpinning; and old structural works done incorrectly. “I’d say it happens in about 10% to 15% of our projects, especially when working on very old properties,” he says.
Solution: Vinn advises doing as much research as possible — and making full use of trial pits and wall cut-outs, for example.
Hoad says she ensures each additional issue is priced out as it arises. She’ll then look at a range of solutions with different costs — where possible — for each issue. “Ideally, the project has a contingency built in for exactly this sort of situation.”
Vinn says unforeseen discoveries can be painful and cites some examples from his own experience, including a hidden well that needed to be filled and concreted over; properties having inconsistent foundations requiring underpinning; and old structural works done incorrectly. “I’d say it happens in about 10% to 15% of our projects, especially when working on very old properties,” he says.
Solution: Vinn advises doing as much research as possible — and making full use of trial pits and wall cut-outs, for example.
Hoad says she ensures each additional issue is priced out as it arises. She’ll then look at a range of solutions with different costs — where possible — for each issue. “Ideally, the project has a contingency built in for exactly this sort of situation.”
5. Design Changes During the Work
“Changes during the build are often more costly than if they were originally in the plans, as it may take builders more time to incorporate them, and time equals money,” Vinn says.
Solution: Vinn advises clients to try to finalize the design as much as possible before the build begins.
Hoad adds, “We’d work with the client to prioritize which items to retain and which to reconsider, remove or swap for a lower-cost option and think of attractive design solutions.” She gives the example of the tiling in a bathroom and says she’d potentially suggest to the client that, rather than doing the whole room with expensive tiles, they choose instead to feature them in a smaller area and use nice but less expensive tiles elsewhere.
Your turn: What are the most common client budget issues you encounter and what solutions have you found? Please share your experiences in the Comments.
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“Changes during the build are often more costly than if they were originally in the plans, as it may take builders more time to incorporate them, and time equals money,” Vinn says.
Solution: Vinn advises clients to try to finalize the design as much as possible before the build begins.
Hoad adds, “We’d work with the client to prioritize which items to retain and which to reconsider, remove or swap for a lower-cost option and think of attractive design solutions.” She gives the example of the tiling in a bathroom and says she’d potentially suggest to the client that, rather than doing the whole room with expensive tiles, they choose instead to feature them in a smaller area and use nice but less expensive tiles elsewhere.
Your turn: What are the most common client budget issues you encounter and what solutions have you found? Please share your experiences in the Comments.
More for Pros on Houzz
Read more stories for pros
Browse millions of photos for inspiration
Learn about Houzz Pro software
Talk with your peers in the Houzz Pro Forum
“In our experience, clients are often unsure about budgets and want our advice,” says Jessica Spencer of My Bespoke Room. “However, this is such a ‘How long is a piece of string’ question.”
Solution: “Giving them options is the best way to put the final decision back in their hands,” Spencer says. “We try to give them a choice of pieces for each element of the design at different price points. This way, the client can choose themselves where to spend and where to save.”