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Many of the artists listed on this site, myself included, ask for a one-third non-refundable deposit at the beginning of the project. In my case I am paid the deposit at the time the reference photos are taken. If the portrait is not accepted in the end at least I am paid a portion of the total fee.
I also talk in detail with the client about what they are looking for and, as I mentioned in the other thread, I have the client literally sign off on the reference photos I will use. If what they are asking for is something I don't feel comfortable doing I let them know that we should probably not proceed since we will both be disappointed with the results.
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