Even small changes made after work begins can have surprising effects on the budget. Here’s why.
change orders is one of the most effective things homeowners can do to control
costs during a remodel. This is especially true when you have a fixed-price
contract. The reason is that seemingly small changes can have cost impacts
beyond the remodeler’s control—costs that ultimately are borne by the customer.
talking about unscrupulous contractors who write vague specifications to create
low bids and then nickel-and-dime clients with change orders to increase
profits. We mean honest remodelers who write detailed specs, price accurately,
and manage their jobs in a professional manner.
a contract price for a complex remodel that gives the clients value for their
money and provides the remodeler with a fair profit takes a lot of time and
experience. The remodeler must plan the job down to the last detail. Deviations
from that plan after project kickoff tend to raise the budget.
usually happens at the preconstruction meeting, where the remodeler and clients
review and sign off on product and design choices. Purchase orders are then
generated and sent to subcontractors and suppliers, setting firm prices for
every part of the job. If clients request changes after this point, they are
responsible for any extra cost.
cost? That depends not only on what is being changed, but also when. For
example, suppose a major kitchen remodel includes a new door to a deck or
patio. If the clients decide later that they want a sliding door rather than a
standard door, it will cost less if they decide before or soon after
demolition. If they wait until the standard door has been installed and the
walls around it wired, insulated, and drywalled, the change is more costly.
are seemingly minor changes that have a ripple effect. These can multiply the
cost of an item to several times what it would have been as part of the
kitchen remodel also includes a nearby powder room, and the homeowners decide
they prefer a pedestal sink over the small vanity they had chosen. The
remodeler’s staff has to cancel the order for the vanity and possibly for a
granite top. If those items have already shipped, the supplier will likely
charge a restocking fee.
The pedestal must be ordered from the plumbing
supplier, taking additional time. If the hot and cold water pipes are already
in place, the plumber has to move them, and the plumbing inspector has to
inspect the change. If the wall has already been finished, the drywaller must
be called back. This minor change may throw off everyone’s schedule by a week
also requires time from the remodeler’s staff—time to complete and track
orders, to reschedule workers and subcontractors, and to update the budget.
That’s why change orders include an administrative fee.
explanation is not given to discourage important changes. Clients are entitled
to make their home their own, and most clients decide to make at least some
changes during a project. But they should do so with a clear understanding of
the costs those decisions will bring. It’s a reminder that making firm
selections up front is in the clients’ best interest.
This is an excerpt from a newsletter that is distributed to all former, current and future clients of Village Builders Inc. If you would like to receive this newsletter feel free to email me at firstname.lastname@example.org
Village Builders Inc