Should you share your budget?
- Most customers think they are giving up their bargaining power by letting their home remodeling contractor know how much they can afford to spend. They believe the contractors will set their prices at the top end of the home remodel budget or even higher. But, there are several reasons that run counter to this line of thought.
- Knowing your home remodel budget goals won’t cause remodelers to raise or lower pricing. Instead, economics forces control pricing based on a number of far more powerful factors, including;
- The cost of the goods and services required to complete the scope of work you’ve requested. Labor costs depend on how much work is involved and the rates your contractor pays to deliver the skills required. The materials costs are pretty much the same regardless of whom you select for your remodeling project.
- Competition for your business forces home remodeling contractors to figure out the most efficient methods for completing the project. We must incorporate these methods into our estimates or risk losing your business to firms that are either more efficient or have lower cost structure.
- Demand for our services also impacts the remodeler’s pricing strategy. If our services are in high demand as a result of quality, cost effectiveness, or customer satisfaction, there is very little reason to lower prices. In contrast, apparently low priced services may reflect low demand for the home remodeling contractor’s level of service.
- Sharing your home remodel budget may have several benefits for you and for the remodeler. The biggest benefit is that you’ll avoid wasting time. Most homeowners don’t know how much remodeling projects should or could cost. But, they know what they expect the outcome to be. If these expectations are unrealistic given the project budget, it’s better to know this before weeks of effort are expended. By sharing the budget with the remodeler at the outset the following actions can be taken:
- Your remodeler can offer ideas and options that will change the scope of work enough to bring the costs in line with your budget.
- Your remodeler can identify the factors that are making your project more costly than you expected. This may allow you to reprioritize your budgeting or postpone the investment until more funds are available.
- You and your home remodeling remodeler can proceed with confidence that the proposed solution will meet your budget expectations.
- Sharing your budget has far more upside benefits than risks.
For more information please visit Home Remodeling Projects Costs in 2016.