Is it normal for a client to misinterpret a bid before we start?

Most of the time, this kind of mix up comes down to the presentation of the full picture versus the individual pieces. You did the right thing by breaking the work into phases since that's what the client specifically requested, but the way the documentation was structured allowed him to mentally silo the costs. When he saw the $1200 for the first scope, he didn't see it as a piece of a larger pie; he saw it as the total pie. To prevent this next time, you absolutely need a 'Master Scope' or 'Total Project Overview' document that lives *above* all other documents. This should be a one-pager listing every single phase, the individual cost, and the final project total before he signs anything. The client needs to see $6200 as the anchor amount from the very beginning.

In my experience, if you break it up into 'Option A' and 'Option B' in the same document, people assume they are mutually exclusive choices. Even if you label them 'Phase 1' and 'Phase 2,' a new client will naturally try to find the biggest single line item and assume that is the total scope of the job. Your documents need to treat the individual scopes like chapters in a book that leads to the total final price, not like different choices on a menu.

As for what to do now, since he has already committed to the second scope and has started the work, continue with the same professional approach you used before. You've already offered a good faith credit, which shows integrity. Don't get stuck dwelling on the mistake because even though he was confused, he is still under your care. The goal is making sure his expectations for the remaining phases are perfectly aligned. If you want to ensure this never happens again, always use a single, comprehensive proposal that clearly defines the overall project boundaries and total investment before you get into the line item breakdowns.

Agree with the idea of anchoring the full number up front. I do something similar now after a deck job went sideways on me. Before anyone signs, I sit down and read the total out loud, then have them write the total by hand on the last page. Sounds old fashioned but it forces them to acutally register the whole amount, not just the deposit. Had zero surprise clients since I started that. Also I email the summary the same day so there is a paper trail of what was discussed in person.

Had a similar thing happen on a deck job where the guy swore I never quoted him for the railing. What saved me was I stopped work right there. Not in a rude way, just said hey, I can't keep building untill we've got something signed for the rest of it. He grumbled but signed within a day. The longer you push forward without the second scope locked in, the more it looks like you agreed to the lower number. And honestly, if he skipped reading the paperwork once, he'll do it again when the final invoice shows up.