Change Orders
"While You're Here, Could You Just..."
Those words can get expensive during construction.
Maybe you decide to move a wall, add outlets, upgrade flooring, change a window, or choose a different countertop. Sometimes the homeowner requests the change. Sometimes the contractor discovers something unexpected. Sometimes the plans simply need to be adjusted.
Changes aren't necessarily a problem.
Undocumented changes are.
A change order should tell everyone exactly what is changing, what it will cost, and how it affects the project before everyone moves forward.
1. Understand What a Change Order Is
A change order is a written modification to the original construction agreement.
It may change:
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The scope of work
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Materials or selections
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The contract price
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The construction schedule
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Responsibilities of the contractor or homeowner
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Plans or specifications
Once properly approved, the change becomes part of your construction agreement.
That's why a change order deserves more attention than a quick:
"Sure, go ahead and do it."
2. Get the Price Before You Approve the Work
One of the easiest ways to lose control of a construction budget is to approve changes without knowing what they actually cost.
Before approving a change, ask:
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What is the total additional cost or credit?
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Does that include labor and materials?
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Is contractor markup included?
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Will previously completed work need to be removed or redone?
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Does this affect another trade or part of the project?
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Will this change the construction schedule?
A $500 material upgrade can become much more than a $500 change if other work is affected.
Know the total impact before saying yes.
3. Put It in Writing
Verbal agreements are easy to remember differently.
A good change order should clearly identify:
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What is changing
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Why the change is being made
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The additional cost or credit
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Any effect on the schedule
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Any related changes to the work
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Approval by the appropriate parties
Keep the approved change order with your original contract and project records.
Your contract, plans, specifications, and approved change orders should tell the story of what you actually agreed to build.
4. Track the Running Total
One change order may not destroy your budget.
Ten of them might.
A few hundred dollars here, $2,000 there, another upgrade next month, and suddenly the final cost of the house looks very different from the original contract amount.
Keep a running total:
Original Contract Price
+ Approved Change Orders
- Change Order Credits
= Current Contract Amount
Then compare that number to your overall construction budget.
Don't wait until the end of the project to discover how much your changes cost.
5. Remember That Changes Can Affect the Schedule Too
Money isn't the only consequence of a change.
Changing materials may require new lead times. Moving plumbing can affect framing or concrete. Changing cabinets may affect countertops. Moving electrical fixtures may affect drywall.
Construction is interconnected.
A decision that seems small can affect several trades and push work further down the schedule.
Before approving a significant change, ask:
"Will this affect our completion date?"
The answer may influence whether the change is worth making.
Don't Be Afraid of Change Orders
A change order isn't automatically a sign that something has gone wrong.
Construction projects change.
The important thing is maintaining control of those changes.
Understand what you're approving. Know the cost. Understand the schedule impact. Get it in writing. Keep a copy.
And don't allow a series of seemingly small decisions to quietly consume the money you set aside for something else.
Your budget should change because you made an informed decision, not because you lost track of the decisions you made.
Construction Is Almost Finished. Don't Check Out Yet.
When the project starts looking like a home, it's tempting to relax.
Not quite yet.
Your final walkthrough is your opportunity to slow down, look closely, document unfinished or defective work, and make sure the project is truly ready for completion.