Construction Blogs

How to Avoid Change Orders!

Posted by: Adriana Hernandez on Wednesday, June 15, 2016

Knowing what steps to take in the pre-construction phase in order to avoid future change orders can be tricky!

There are so many elements that come from the moment you decide to remodel your home that it is hard to remember all of them when selecting and negotiating General Contractor and most likely will end up in a change order in the future. I head of a story about a contractor that made so much money with "change orders" that he bought a yacht and named it "Change Order" and the dinghy on the yacht was named "Original Contract". There are a lot of people out there who believe this to be the case for most contractors, but let me tell you that is not true! We hope after reading this you will feel more comfortable selecting and understanding a General Contractor and working with them to achieve your dream home! These are some of our tips to help avoid those nasty change orders:

1. RESIDENTIAL REMODEL                                

1.1 CHOOSE DESIGN-BUILD -  

For a residential remodel is crucial to select the design-build team and bring them on board from the very beginning of the project. It is true that most architects and General Contractors will recommend this set up for virtually every type of project but it is most important in a residential remodel because there are so many little things that get lost and forgotten at the time of defining a scope of work that it will naturally end in numerous change orders throughout the construction phase.  

1.2MORE THAN 1 QUOTE -

I recommend meeting with a few General Contractors to build your project and make a selection based on quality of work, personal compatibility with the GC and you can request a budget estimate so you can have a general idea if the project and the GC you like are within the budget you had in mind. Remodels are usually more expensive than people think. A good General Contractor will explain in detail the reasons why when he/she provides you with a budget number. After a GC has been selected then it's time to nail down a scope of work. 

1.3 DO NOT START A BIDDING WAR.

This is the most common mistake we see owners make. Let me explain why: It's OK to check pricing to make sure you are not being taken advantage of but this can be a double-edged sword. Remember you will always find someone that will do anything for less; but it's that really what you want? in this case, the most common result is either you go with the cheaper option and compromise the quality of the project and your peace of mind, or you force your original contractor to lower his price in order avoid losing the project, but in this case ( depending how much of course, a few %s should not affect it too much) the General Contractor has already lost money and the project hasn't even started. Do you think he/she will give your project the attention and time that is required that was originally intended? NO!. I guarantee you that there will be problems if this is the type of relationship you develop with your GC. Once you decide to do a project in your home you need to accept the fact that the GC needs to make money while giving you the service and quality of work that you deserve and expect.  

 Rage                    Construction Frustated

Bidding wars also result in missing items in your scope of work. In order to match another contractor's price, the "most qualified" contractor might need to price the exact scope of work in order to be compared apples to apples, but this doesn't mean it's a complete scope of work. As a General Contractor myself, I can tell you we have lost many projects because I am "more expensive", when in reality my proposal its simply a more honest representation of the true scope of work for the project based on previous experience and knowledge of what will truly be required in oder to provide a complete project. But owners, especially first timers, really want to believe that the cheaper option will work out. 

1.4 This brings us to #4 SCOPE OF WORK - 

Whether you are bidding a job or developing the scope of work with a General Contractor you've already selected, I recommend you ask a lot of questions, even if you think they are stupid (no such thing as a stupid question!) or the answer might seem obvious to you. Let me put it this way, if the question starts with "is this included?" the answer is most likely no. I will give you a quick example: you have decided you do not need to do any changes to the electrical set up of your house, but are the outlets and switch covers the color and look that you would like? are you really going to upgrade your home and leave those old, sometimes painted covers on your newly painted walls? Most likely your answer is no, and guess what? if you tell your GC you do not want any electrical changes then he might not include this item, which is not a minor task.

You can easily spend between $500-$1,000 just in materials, depending on the size of the house. The same case happens with the AC: you decide your AC does not need any improvements, but what about the diffusers / grills themselves? just like these examples, there are many small things that can easily add up and leave you with a bad taste in your mouth for a process that should be fun and enjoyable. You are upgrading your home to be a beautiful and personalized master piece that will be 100% customized for you. You need to have fun with it! 

Tips

Here are 5 tips to have in mind when developing a scope of work and budget that will for sure minimize change orders during your project

  1. Be honest with yourself! Define a maximum amount you can spend on your budget and do not deviate (adjust your scope, not your budget).
  2. If possible, select a design-build team, not separate entities that will blame each other for every little missing item/misunderstanding. 
  3. Common items missed in a remodeling scope of work are:
    • Texture of walls / ceilings: are you happy with them or do you want to change it?
    • Cover plates and electrical outlets and switches, if there is not other electrical work being done in the house. 
    • Recessed light fixtures: most people think they can live with their existing ones until they decide to paint the ceiling white and their fixtures are beige... Make sure you picture this.
    • Installation of owner purchased fixtures: you decide to buy a fancy chandelier (believe me, your GC will not predict this) and installing some of those fancy fixtures is not a simple task!
    • Do you want to change your windows for impact resistant? Have in mind that in order to receive the insurance credit for openings, all exterior doors, garage door, and skylights also need to be impact rated or have shutters (at least in Florida). 
    • A common item not included in any GC bid but is usually a part of the owner's maximum expenditure in their budget are the window coverings (shades or curtains). They can get really pricy depending of the type and brand. 
  4. It is virtually impossible for a General Contractor to predict what will be found inside the walls of an old house once construction starts. Allow for at least 10% - 15% of your overall budget as a contingency fund for problematic existing conditions and try your best not to blame the GC, it is really not his/her fault!. If you selected a good one i am sure he/she will do their best to solve the problem in the most economically way. 
  5. Depending on where you live, have a line item in your budget for permit fees. At least in Florida, permit fees can add up quickly and General Contractors will always exclude these fees, as an exact amount is impossible to calculate until the permits are all submitted and approved. Consult with your GC on how much to estimate for your budget but keep that money out of your contract with the General Contractor.  

 

 

 

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