Sirany takes a tougher approach: “If they don’t want to give me a budget, we’re going to give them one.” Using his 20 years of experience and drawing on a history of job cost numbers tracked and recorded by software, he says he has a good sense of where the project will go. “Our goal is to give a realistic budget and to hit it. We educate the client at the outset.” Giving an unrealistically low budget to get your foot in the door gets the client excited, he says, but then you deal with their disappointment — or sometimes stronger emotions — when the actual budget soars.
Educating clients can even mean telling them to wait to do a project, Strong says. “If they really don’t know the costs, I’ll meet with them. If they’re pushing the edge, I tell them they should wait and save the money to do the project [later].”
Whatever tack you choose, keep in mind something that Dahlgren has learned: “People get more upset about money than they do about anything else.” —Diane Kittower is a freelance writer based in Rockville, Md.
Saying Goodbye
If a client is absolutely determined to spend less than you know a project should cost, the only thing to say is goodbye.
When someone tells Alex Dahlgren, senior partner at Acheron Construction in Dallas, “I had a friend who had such and such done at such a price,” he responds by saying: “If you’re happy with the work done for your friends and the price, you have found your man right there.”
If a potential client thinks the price from Denver’s Classic Homeworks is too much, founder Rick Pratt says, “Sorry, those are realistic costs. I’m not sure you’ll get the product or the service you want for less.” Pratt believes that anybody who has that conversation early on is a very price-conscious customer. “We’re not looking for them,” he says.
Steve Strong, co-owner of Strong Construction in Fremont, Calif., says that he tries to get homeowners to honestly express a budget. Then, if they get bids of $58,000 to $78,000 from other remodelers and Strong comes up with a budget of, say, $75,000, “we politely back out if they scream. We’re lucky to be small and to not need that much volume. Some larger remodelers who need volume would get a salesman to tweak the price.”
Changing the Changeable
Given that people change their minds, and hidden construction defects exist, change orders are bound to happen. They’re a pain, but these three remodelers have processes in place to deal with them, making sure they don’t lose money on that extra work.
Two-pronged approach: If the requested change warrants meeting with an architect or an engineer, Lars Construction in La Mesa, Calif., asks clients to sign an order for $500 to stop the job and do the research — a policy laid out before the project starts. If the change just requires phone calls to trade contractors, the remodeler presents the costs in writing and has the client sign off. “It either deters them or they say ‘OK,’” president Jason Larson says. “We’ve researched it and had people say ‘no thanks.’ We give customers whatever they want, but we charge for the time and materials to get it done.”
Proper planning: People usually understand the problems that change orders cause because Acheron Construction explains early on how they affect the entire scheduling process, says Alex Dahlgren, senior partner of the Dallas remodeling company. “We spend a lot of time explaining about change orders from the beginning. They’re usually the result of improper planning.” When, for example, clients belatedly decide during a kitchen remodel that they want to paint the entire room, Dahlgren details the painting process: how painting the cabinets and island will add a lot of time, the draping that will need to be done, and so on. He says something like, “If my painters are due at someone else’s house in two days, we can’t do six days at your house now. You’ll have to go in at the end of schedule.”
Explain the details: The issue of time is one that Chuck Haeger is familiar with. “What do you mean it adds time?” is a refrain the project manager for S.N. Peck Builder in Chicago hears and knows how to respond to. “You have to be able to explain the trades that go into the work and the complexity of what they’re asking for,” Haeger says. “Specificity helps. [Clients] don’t understand the way we in the industry do. So if someone wants to straighten walls that were crooked, he explains that the work involves not just replastering but days of demolition, use of a Dumpster, the need for an electrician to upgrade the wiring — and he emphasizes the resulting increase in both resale value and enjoyment of the home. Offering details helps build trust, Haeger says, and that’s key.