Allowance

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A dollar amount set aside in a bid for an item the customer has not chosen yet, like tile or fixtures.

An allowance lets a contractor give a firm price for the work while leaving room for choices the customer has not made. The bid says "tile allowance $900." If the customer picks tile that costs $1,300, they pay the difference; if they pick tile for $700, they get the credit.

Allowances belong on remodels and anything with finishes. The mistake is leaving them out and pricing "tile included," which means a fight when the customer picks the expensive one.

Related: Change order · Scope of work

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