This situation is simply crying out for open communication before agreeing to it.
Spend some time talking to them to find out what they really want. Do they want an investment in hand made art, or something to toss on the bed for a few months, a bed that they may share with their pets? :shock:
If they do want a beautiful hand made quilt, then it's up to you to educate them on the amount time and effort that goes into it, and especially the anticipated price. Perhaps they would like to talk to a quilt appraiser before beginning, or get the quilt appraised when it is completed.
If you don't communicate, then simply hand them the quilt and a bill for $800 or more, they may well be shocked and angry, and rightfully so....because they simply had no idea what to expect, and you didn't tell them. And how would you feel if your quilt was appraised for, say $3,200 and you only asked for $800?
Once they understand what they are asking for, and if they decide that they truly want the hand made piece, then making the quilt will be a joyful process for all of you. If they decide they are not ready for that commitment, then you are all spared.
By the way, Libby Lehman prices her quilts, and has no trouble receiving, $400 per square foot! :thumbup: