During your first meeting with a designer or contractor, they may ask you what is your budget. How to establish a budget before you are educated as to how much things costs may be difficult at first, but in my last post, How to Handle Your First Meeting with a Landscape Professional, I discussed the industry standard of offering the “free estimate” which can take the form of an actual quote, bid, proposal or simply an initial meeting where costs are discussed in ballpark figures. Most professionals who have experience with homeowners during the first meeting will want to discuss budget.

The problem is that most homeowners usually have no idea what the costs are for their desired project. One of the goals of the initial meeting is to listen to the homeowner’s wants and needs and then see if they are being realistic with a stated budget or if they are way over their head thinking they can get a Mercedes for the cost of a Kia. So the question of the budget is important so the contractor or designer can provide meaningful feedback based on your stated goals. Here are a few typical responses that most homeowners state in response to the question of budget:

  1. They will state they have no idea  what things cost (they may believe that is the purpose of a free estimate – to educate them about what things cost so that they can then arrive at a budget)
  1. They do have a budget in mind but do not reveal it assuming the company will spend the whole budget even though the project can be built for less.
  1. They say they have no budget and will spend whatever it costs (the ideal client).
  1. They will not give you a budget saying they don’t want to limit your creativity in coming up with a design.
  1. They will not state a budget, but instead ask the designer/contractor to give them a ballpark cost on the spot and usually state that they will not hold you to it.

The last response is the most difficult for the company since both parties are trying to arrive at some mutual agreement about what the budget should be. If the contractor throws out a figure that turns out to be lower than a follow up written proposal, the homeowner can use that as leverage for expecting a lower number. If the contractor throws out a much higher number, they may be labeled as expensive provided the homeowner has previously talked with other companies and received lower ballpark estimates.

If the designer or contractor does not get a very clear direction as to a budget from the homeowner, the contractor may feel they are being used for the purpose of establishing a budget. This is evident when the homeowner states they are getting several “bids”. This is a red flag for a contractor who senses that the homeowner may just be interested in the lowest price for what was desired. But if the stated wants and needs are not detailed in some kind of plan, how can the “bid” be accurate? A contractor who draws up a plan for free during the “bid” process is simply preparing a design based on what they think the homeowner wants and what they are willing to spend.

Again, why should the contractor draw up a plan with costs without a clear budget? A wise contractor may consider an unwillingness to provide a budget as a way of qualifying the prospect. A wise contractor who does not get a straight answer on the budget question will have ways to ask the question indirectly. Do not let a designer or contractor go back to their office without some kind of budget. At least agree to a range so you are not wasting each others time.