5 Reasons Why Change Orders Cost What They Do

Change Orders

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There are times throughout the renovation process where a homeowner will realize that what they initially decided on is no longer what they want. It might be as simple as updating the color of some paint or as complicated as completely changing the floor of a home. When these changes pop up, even a seemingly small deviation from the plan can turn into several big changes very quickly. 

“Now that these floors are being put in, I’ve realized it doesn’t look how I want it to. Can we go with something else?”

“We should be able to help you with this, but making a change does come with additional fees. Let me explain why.”

To understand the cost of change orders, it is important to realize what it means for the contractors working in your home. A little extra time or money on your end can translate to large changes for us, so let’s discuss what really goes on behind the scenes of a change order.

 

1. The When and the Why

The first step towards understanding what we do is to understand the when and the why of change orders. For change orders, the when is a moment where a homeowner makes a request that changes the scope of work. These moments occur quite a bit with homeowners, certainly more often than you would expect.

“Last night on Pinterest, I saw someone with subtle pink walls in their family room, and I am obsessed with it. Can we make this change?”

“We are so glad that you found something that makes you excited about your renovation, but this will cause delays and additional fees. Let’s take some time to get on the same page about what a change entails.”

The why behind change orders is that change orders occur because the customer wants to do something different regarding the overall design of the renovation. Any time that we deviate from the original renovation plan, it is considered a change order. Changing the cabinets in a kitchen, wanting different tile in the entryway, and asking for a change in location for items that are connected to plumbing are all examples of change orders.

What Isn’t a Change Order

Change orders can be a point of confusion for homeowners, and this is because of scheduling. People assume that when we say that a change order occurs when the schedule changes, they should take that quite literally and assume that we mean all scheduling. Since we do make clear schedules for progress on each part of a renovation, people tend to think that if something takes an extra hour, we will charge them for the added time. This is not the case. 

“I saw that you were supposed to be done with the new tile earlier today, but you guys are still working on it. Will this cost me additional hours?”

“No, this just happens sometimes!”

We will not charge for minor instances that slightly alter the schedule. That is simply a part of the job, and sometimes it does happen. It is not extreme enough to have a notable impact on our work, and it is something that we naturally account for.

What is a Change Order?

A change order occurs when something that is beyond our control is put on us for a resolution. When we say this, we mean that something has happened to our original plan and schedule because of a change that you want to see. Making any move away from the original plan comes with a significant amount of extra work on our end, and that is what we consider a change order. The amount of work—and more—is why we have these additional costs.

2. It Pushes Your Schedule

Now that we have covered what constitutes as a change order, we can talk about scheduling. Any time that we make a change at your request, it has a notable impact on our schedule. When we create the original scope of work, we plan a timeline that fits that specific scope. If we go in a different direction and alter the scope of work, we create a need for scheduling changes straight out of the gate.

“Clients book us in advance and we preserve their spot, but when one project takes longer than we accounted for, it impacts everyone.”

“Wow, I just assumed that you guys had endless teams on standby.”

“Ha! We wish!”

With renovation work, we always stack our schedules. We make a schedule for your project and put aside that time, then we schedule other customers after you. When you ask for a change that alters your schedule, you aren’t just altering your schedule. You are also altering the schedules of our other customers. This results in more work on our end, active communication with other customers, and work being created for several departments. An impact this big comes with its own cost.

3. The Time to Get and Source the Material Needed for the Project

Another area where more work is generated is is with sourcing materials. Any change will generally require that we get additional materials. Whether it means bringing in more plaster or ordering new cabinets from somewhere else in the world, a project change will require something to see it through. When this occurs, it takes more time and more work.

“The new cabinets that you have chosen will take approximately two weeks to get to us—this will be a significant delay. Let’s talk through what this means for us and for you too!”

Ordering the materials takes some work itself, but the timing is often a bigger point of concern. When a change requires that we wait to obtain new materials, it forces us off schedule again. Choosing different cabinets or sinks can influence weeks of project time. To ensure that you receive your dream renovation as soon as possible, we always make sure to move mountains when it comes to project changes. Unfortunately, this still influences our schedule and once again causes us to have to delay our other clients.

4. The Paperwork

For our entire team, one big area of delay with change orders is the paperwork. On the end of the homeowner, it likely seems very simple. Unfortunately, we can’t just make one simple change. On our end, every piece of paperwork turns into one more.

“Before we can finalize your change order, we need to handle the paperwork.”

“Okay, so that should be quick, right?”

“Actually, changing the paperwork includes several of our departments!”

The request for a change order will come in from your project manager, who will discuss the change with sales. This team will then work to address the change order, and when this is completed, new paperwork will be drawn up and sent for approval. 

“Now that we fully understand the scope of what you want to change, we can make a game plan to communicate this with our team so you receive that perfect final renovation!”

After approval is received, that same team has to go through and amend all of the paperwork to reflect this new change in order to ensure complete accuracy with our documentation. Then, when the documentation has been updated, it is distributed to the project team and everyone that is involved. This allows us to make sure that everyone is on the same page and ready to carry out the new changes to reflect that final dream renovation.

5. Redoing Work

The final reason that change orders cost what they do is based on those instances where we have to redo work. Any time that you make a change in an area where we have already worked, it generally means that we will have to go undo what we have already done and then redo it following the outline of these new changes. For us, this is a loss in a couple of ways.

“We are going to add in the new floor, but since we are already halfway done with the original flooring, it is going to take some extra time.”

“I didn’t think about that. I guess you do have to go remove what you did, prep the space, and start over—right?”

“Exactly. We are going to have as fast as we can, but this change does deviate from our original schedule”

The first cost addition for this process is the additional time that is involved when this happens. At this point, we will have already completed work. This original work was accounted for in the original schedule, but when we have to do it for a second time—or spend additional time undoing what we have already done to create a fresh slate—we ultimately have to spend more time on the same step of a project. This delay leads us to stack more time to the overall schedule. 

“The materials that we already used will need to be disposed of—and we need to get on the same page about the cost of your new flooring.”

“Is it not possible to return the original flooring?”

“That is a tricky subject. Let us explain our distributor’s return policy—and what this situation means for their warehouse.”

Even if time is on our side and we do not have to spend a significant amount of time redoing something, there will always be an additional cost for materials. The materials that we have already used cannot be used again, so we will have to add more materials to complete the project. Since materials do come with an additional cost, this will also be added on as a part of the total expense. Any time that we return unused materials, we are charged by the distributor, so these costs will also be added to the total cost.

How Change Orders Build

Change orders can escalate in cost very quickly because of the way that they build on each other. A change order that influences even one part of a project will always create additional work and additional costs, which can be a particular point of concern for both you and our team. 

“Wow, I can’t believe how much work goes into one change request.”

“We are committed to making sure that you get the right space, but yes, it does come with a lot of additional work on our end—even if it seems simple on yours.”

To fully understand the cost, consider the way that each of these individual parts creates more work for everyone involved—and how that builds over time. The cost to make a change can start out as $2000 and quickly escalate to $6500 by time we receive the new materials that you requested just based on how every single department gets impacted.

Change Orders Are a Preventable Cost

We believe that every homeowners deserves their dream home, and we work hard to prove that. This is why we allow change orders as a part of the process. Sometimes you just want something different, and the last thing that we want is for you to be unhappy with the final product. With that being said, they do come at a high cost, and they can be avoided.

“I’m going to spend so much time researching my new renovation that it will be absolutely perfect the first time around.”

“That is what we like to hear!”

In our line of work, change orders are incredibly common—but they don’t need to be. The best way to avoid this unexpected expense is to really put in the work in the discovery phase to make sure that you have designed the home of your dreams. A home renovation is a significant investment, and the more you put into it, the more you will get out of it. Taking steps to ensure that your dream home is just around the corner can really help to decrease the likelihood that you will want to make any changes. This means your entire project schedule will be smooth sailing, and that is what we like to see for every single one of our clients!

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