The ceiling is not a fixed percentage, it's set by the buyer pool at that price point and what they consider a substitute.
The assumption doing the most work in your competitor's pricing is that the buyer who can spend 67k more than the comp is choosing between spec homes on that street rather than moving to a different neighborhood entirely. In most sub-$600k markets, that assumption breaks quickly. The incremental buyer is rate-sensitive and often capped by qualification limits, so the ceiling on finish premium compresses hard. In higher price bands, say $900k and above, buyers making discretionary decisions have more room to pay for differentiation, and the substitution logic weakens because the pool is smaller and less interchangeable.
The risk you did not mention is carrying cost. Ninety-four days is already meaningful. If your finish budget adds four to six weeks to your schedule and you hit a soft patch in absorption, the premium you were chasing gets consumed by financing, taxes, and insurance before you close. That's the place where a finish upgrade that pencils on paper erodes in practice.
A more durable frame than a percentage: look at what the last two or three sales on that street achieved per square foot on the finishes that were actually documented in the MLS. Agents know which line items appraisers give weight to, and which ones the market prices at cost rather than at a premium. If your market's appraisers are compressing custom cabinetry to builder-grade value in their adjustments, you will price the premium in but the buyer's lender may not finance it.
Before you commit the finish budget, it's worth a direct conversation with the listing agent on the sitting spec. They will tell you what objections they're hearing.
What price band are you building into, and is your current comp within the last 90 days or older?
