How to help clients think about budget
When considering remodeling, one of the first questions most people ask is, “What will it cost?” At the same time, the remodeling contractor needs to know the budget available to accurately plan the scope of the project.
Craig Knott, CR, owner of Houseworks Unlimited, has been building projects in the Washington and Baltimore metro areas since 1990. In his two-plus decades of remodeling, Knott has found that homeowners tend to land in two pricing camps: those who have done their homework and have a basic idea of how much projects should cost—thanks to past experience or research—and those who have an unrealistic idea because of a lack of experience or poor information.
Since there are many variables that go into cost of a project, including scope, quality of products, workmanship, service and guarantee of work, the discussion of budget and what a project will cost can vary dramatically from contractor to contractor.
To help start the conversation, and to draw more serious and educated clientele, Knott created a pricing list on his Website that covers the average costs for typical projects. He said he first saw the idea on the Landis Construction’s Website, and the goal is to help homeowners put together a realistic budget for the project before they ever pick up the phone or meet in person.
The pricing list looks like this:
16’x 30’ Sundeck – $10-20 K
16’x 16’ Screened Porch – $20-40 K
Upgrade Existing Bath – $10-35 K
Add or Remodel 3 pc. Bath – $15-50 K
Upgrade Existing Kitchen – $30-100 K
Add or Remodel Kitchen – $35-120 K
24’x 40’ Basement or Attic (w/o plumbing) – $50-95 K
16’x 16’ Family Room Addition – $65-100 K
16’x 16’ Sunroom Addition – $75-125 K
Add Master Suite w/Bath – $80-140 K
24’x 24’ Addition above Garage w/Bath – $150-225 K
20’x 20’ Family Room w/Master Suite above – $150-225 K
Turn Rancher into Cape Code or Bungalow – $155-290 K
Turn Rancher into Colonial w/full 2nd Floor – $180-325 K
“We use this list as part of the educational process,” Knott says. “If they haven’t already been to our Website when they call, we send them to the site and encourage them to use the list as a reference before we meet so that they have some ideas.”
Knott created the list based on average prices of previous projects. “We’ve done a lot of jobs over 27 years, and even though some of the projects listed have a big range, it’s a good way to start the conversation,” he says.
He also said that the Remodeling Magazine’s Cost vs. Value report is getting closer to the real cost of projects and can be used as a tool to help educate the homeowner.
For small remodels, like a small bath or kitchen, Knott said he might discuss pricing over the phone. “If the homeowner is just looking at price, and we’re number 10 on the list, we probably won’t be a good match, in my experience,” Knott said. “We always start the conversation by qualifying them about how they heard about us.”
For larger projects, and those with multiple parts, he will always make an in-person meeting where the homeowners can share photos with him and they can discuss project goals. During those meetings, he uses the price list in combination with photos of his past projects to show examples of what the various price points represent. The large range for projects on his price list help Knott and his team talk about cost of materials, how price of materials can fluctuate, and how quality of products like decorative plumbing, appliances and surfaces can impact the total project cost.
“If you have a history of projects to work from, you can walk the client through by plugging and playing their size and shapes to develop a range for their project,” Knott said. “We have them look at rooms and give them an allowance for each area so that they can see where they can save money and where they might want to splurge. The goal of these meetings is to not lose them through this process and go to construction documents.”
The budget discussion also creates an opportunity to discuss quality of workmanship. “You really have to educate the homeowner about what the differences are between smaller operations and bigger remodeling companies that have larger overhead and why,” he added.—Tanja Kern
| 7/30/2013 12:00:00 AM