An unfortunate and often used tactic used when negotiating remodeling pricing, is a contractor will adjust the allowances to give a perceived cheaper quote. Typically the adjusted allowance is set well below what a homeowner could reasonably purchase the material for. Below is a simplified example of a bathroom remodeling quote in which a homeowner was presented a quote of $23,000.00. Upon seeing the pricing, the homeowner expressed to the contractor the need to be below $20,000.00 for the project. Instead of making adjustments to the scope of the project or lowering labor pricing, the contractor trims a little bit of money off of every allowance item. This allows the contractor to present a revised quote of $19,500.00 to the homeowner.
ORIGINAL Bathroom Remodeling Project:
$23,000.00 Remodeling Quote
REVISED Bathroom Remodeling Project:
$19,500.00 Remodeling Quote
The problem with this scenario is that it sets up a false expectation that the project can in fact come in under $20,000.00. The reality is when the homeowner goes to select the allowance materials, they will find that the new allowances are set absurdly low. Ultimately after the selections are made, the final cost of the bathroom remodeling project is closer to the original $23,000.00.
When considering a remodeling project, the most effective way to get a true cost, is to have a complete design done. This allows all the material and decisions to be pre-selected before the quote, while also giving the designer an opportunity to tailor the project to the budget set by the homeowner.