This Is How You Have a Budget Conversation With HomeownersPosted: October 1, 2017
Homeowners rarely have an accurate sense of how much their project will cost when they first speak with a remodeler. So you can imagine how important it is to get some information about the homeowner’s willingness and ability to spend before investing 20-plus hours working on designs or estimates. In theory, you’d simply ask, What is your budget? But even if the homeowner does answer, they’ll tell you what they think the project should cost, not what they are willing or able to invest.
To combat this, my remodeling clients share stories of what other homeowners have spent. These stories convey credibility that their firm has done similar projects before. The homeowners can’t protest; we are simply sharing how much someone else has invested. These examples have an effect. Even a stone-faced homeowner can be asked if she wants to invest within the range of the two stories. Just make sure the range is broad enough to cover most possibilities.
Budget Before Scope
It’s crucial that you discuss budget before the client decides on the scope of the project. Don’t share any renderings or details until after you have an idea of their spend. There’s no better way to kill an appointment than by showing options that are far beyond the homeowner’s budget.
You’ve probably seen this happen. The appointment seems to be going well when suddenly the atmosphere changes and the homeowner hints that he’s had enough.
If the prospect is particularly cagey, I recommend simply saying that people can spend anything they want these days on projects. Explain the price ranges for tile, appliances, and toilets. There is no limit to how much or how little things can cost. If the homeowner’s budget doesn’t fit the sort of projects that your company likes to do, you’re welcome to disqualify the prospect. Just don’t decide on a scope and then ballpark it right there. That old-school approach is costing you time and money. Review some previous projects before the meeting, so you’ll be armed with third-party stories.