How to Discuss Budget for a Home Renovation

When you sit down with a remodeling company to talk about your project, budget is one of the first things you’ll need to discuss. But for many homeowners, talking about their budget for a home renovation project can be tricky–even uncomfortable. As one of Rhode Island’s top remodeling companies, we’ve helped hundreds of happy clients figure out their budgets and scope. In our daily budget discussions, we interact with many homeowners who struggle with this topic. We have developed some insight and tips to get through it. So, how do you discuss your budget for a home renovation?

Our team has learned that it’s critical to be transparent with our clients about budget from the first conversation. Maybe this is your first experience working with a home remodeler, and you aren’t sure what to expect. Maybe you’ve had past experiences where you’ve felt out of the loop or taken advantage of. Or maybe you’ve gotten several quotes for the same project, and they’re all wildly different, but you’re not sure why. Keeping your cards close to your chest when discussing budget makes most people feel safe – but it can often confuse and complicate matters. In this article, we’ll go over why it’s essential to talk about budgets for home renovations early and how to best prepare for discussing budgets with your home contractor. 

Why it’s important to talk about budget early

Speaking openly about your budget early on is meant to be helpful, not exploitative. Knowing what you’re willing to spend allows your project developer–your biggest advocate in the renovation process–to ensure everyone is on the same page, preventing sticker shock and minimizing surprises. Too often, clients will conceal their budget, resulting in being shown designs that have unrealistic budgets or designs that fall short of their true priorities.

Even if you’re not exactly sure of the final scope of your project, it’s essential to know your boundaries. What is your budgetary sweet spot? What would you consider a hard stop? 

Let’s say you have a long list of things you’d like to have happen around your house, but you don’t know what’s feasible right now. Communicating your budget sweet spot and your hard stop to your project developer (PD) allows them to accurately assess and develop a realistic scope of work from your list. The PD will also communicate those numbers to the design and production teams, letting everyone involved understand what is and isn’t possible for your project. After all, a designer wouldn’t want to show an $800,000 design option when the budget is $300,000, but without real boundaries, they won’t know to hold back in the creative process. Having this information at the outset will help your renovation run smoothly and without setbacks.

How to Talk About Budget for Your Project

Understanding Scope

The budget for a home renovation project is inherently linked to the project’s scope, i.e., the extent to which a space (or spaces) will be renovated. Here are a few exercises you can do to understand the scope of your renovation and further prepare you for discussing the budget with prospective contractors–take a look!

What Problems are you Trying to Solve?

You may know exactly what’s wrong with your space and already have a wishlist of changes that will solve everything–that’s great! But when budget becomes an issue, it’s also helpful to have a list of the problems you want to be solved that can be shared with your Project Developer. Having a list handy allows the PD to suggest solutions that you may not have considered before. For instance, you may think a 500-square-foot addition to your house is the best solution to organize your home and make space for all of your things, but your PD might be able to suggest storage systems or cabinetry that could solve the same problem. The addition may cost hundreds of thousands of dollars, while the storage system may be a fraction of the cost. 

Ranking Priorities

Saving inspirational images and design ideas from home remodeling shows, design blogs, and social media is one of the most exciting parts of home remodeling and a great way to share your aesthetic style with designers. Don’t stop doing this! Once you have a scope in mind, you can start using these outlets to hone in on the elements that are most important to you. Creating a list of priorities for your project–the MUST haves versus NICE to haves–will allow the PD (and you) to identify where resources should be focused and where more affordable options can be implemented. Maybe it’s the use of natural materials that’s most important; perhaps it’s refinishing the basement, or maybe it’s that Japanese soaking tub for your primary bathroom. Whatever it is, it’s essential to know your priorities when discussing a budget. 

Do Your Research and Bring Questions

Most people who want to remodel their homes don’t know much about the process, and that’s okay. At Red House Design Build, we strive to be transparent about our processes and encourage our clients to ask questions and equip themselves with information (did you see our post about second-story additions or how much a kitchen remodel costs?). 

Not only does asking questions build trust, but it also helps us further understand where your priorities are. Having a list of questions–whether asking about construction practices, why something costs a certain amount, or even a good place to find inspiration–is always a helpful practice.

Being Ready to Talk About Budget and Level of Service

After determining the scope of your project, there are a few essential things to remember when discussing your budget. First, you should know your budget’s “sweet spot.” What’s the ideal amount you’d spend for your project? Is this number a rigid boundary? Is it okay to be a little above this number or not? Some clients may like to see options slightly exceeding the budget during the design process to get new ideas; would you also consider this? Be sure to communicate the answers to these questions to your project developer. 

Another important question to consider is – what level of service are you looking for? Do you value a high-level of craftsmanship? Do you care deeply about how an addition will enhance the curb appeal of your home? Is it more important to you to save whenever possible or invest in long-lasting finishes? Knowing what level of service you want is critical when choosing a remodeling company. Budgets for a bathroom remodel can vary greatly depending on whether you hire an independent contractor, a general contractor, or a design-build firm – but so will the final product. Learn more about the different types of remodeling companies in our next blog – What is the difference between a General Contractor and a Design-Build Firm?

Our team of experts is ready to help you develop the scope and budget of your project. If you have more questions about what your project might cost, schedule a discovery call today. This call will be the first step in learning more about your Rhode Island renovation project.