Ralph has been watching HGTV and is convinced that upgrading to a chef$-$style kitchen would be a good investment. This will add marble counters, a commercial gas stove with dual$-$ovens, and custom cabinets. You estimate these upgrades will cost $$15,000,$ but everyone agrees they will add even more value to the house. Ralph & Marie know that you have a $$20,000$ risk contingency in the estimate and they hope that you can absorb this extra cost, since there is no way they can increase their $$400,000$ budget. What do you suggest that Marie and Ralph do$?$

If they are determined to make these enhancements, find somewhere else to reduce cost and stay within the total construction budget. Ralph is frustrated, saying that you are focused only on your project and not the long$-$term value.

Make the investment. These upgrades will increase the assessed value and be amortized across the mortgage. They will recover the higher cost plus a profit when they sell the house.