Home Design and Construction 101 - Avoiding Change Orders 

Tips To Help You Stay Within Your Construction Budget

A home remodel is a complicated process with many layers. The typical project consists of many decisions about everything from design elements and materials, too often unforeseen issues that can arise and need to be dealt with. Here at Toulmin, we work with our clients to develop a series of documents including a "scope of work" and establish a "change order" process for addressing any changes that may happen outside the original scope of work before we sign a contract.

Planning your home improvement project is an essential step in the process. These documents allow us to define a project, establish procedures for making changes, and lead to developing a budget for your project.

In this post, we're going to examine whet's behind planning your project, define some of the terminologies, and explore ways to solidify your project's parameters to help prevent change orders to keep your project on track, and on budget.

Defining the Scope of Work

The first step of the process is to sit down with your design-build professional and begin to define your project. They will discuss your creative vision, talk to you about your must-have items, and create a wish list and options for your space.

All of these elements will contribute to the development of a formal "scope of work" document. This document outlines all of the work to be performed. It will include materials, fixtures, and finishes to be used, including elements like lighting, countertops, cabinets, flooring, etc. Everything that is designated in the scope of work will also appear in the formal contract that is signed by both parties before actual work begins.

What if Something Needs To Change?

As part of the scope of work/project contract, your design-build professional will outline the process for making changes to the original documents. The fact is, it's rare that any construction project proceeds from the original scope of work without any modifications.

Sometimes it a minor change, like the homeowner doesn't like the original cabinet hardware, so it must be reordered and switched out before they sign off on the job. Other times it may be an unforeseen issue that arises during construction. For example, when the walls in the kitchen are opened up, it's discovered that the wiring is not up to the current local building codes.

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The process of documenting and implementing any changes or deviations from the scope of work and the contract is called a "change order." The right firm will clearly outline the process for creating a change order in your agreement, including any additional costs for time.

Common Reasons We Create Change Orders

Change orders are not something to be afraid of. However, you should be mindful since too many change orders are the fastest way to blow your budget. That being said, there are often valid reasons for creating a change order.

Typically, change orders fall into one of four categories:

• Homeowner Generated

Often for many homeowners, it can be challenging to make an educated decision on a design element from a small sample, for example, a backsplash tile or 6-inch countertop sample. It's also not uncommon for the homeowner to change their mind about a product, like wanting to switch from maple to cherry cabinets. Sometimes they'll request an alteration like adding an additional window or will add extra work, like refreshing the first-floor powder room to their kitchen remodeling.

• Contractor-Generated

Sometimes the contractor may have an "after the fact" constructive suggestion, like swapping the marble countertop for marble pattern quartz to save money for a necessary upgrade, which leads us to reason three...

• Unforeseen Circumstances

Often a good contractor will warn a homeowner about potential problems but can't confirm anything until demolition begins, for example, mold behind a damp wall. This is especially true in older homes. Typically these issues must be corrected before work can proceed. In addition to mold, other potential problems include asbestos, carpenter ant damage, old wiring, rotted subfloor, etc. Any of these issues will need to be addressed to pass inspection.

• Inspector Generated

This is the fourth reason for many change orders. More than one job has been stopped due to additional work being needed to meet local building codes. Codes are constantly changing, and these types of change orders are the most difficult to anticipate. These types of change orders typically involve bringing old homes up to code.

Change orders can often add to the cost of your project. However, that's not always the case. Some change orders can actually result in lower costs, for example choosing a less expensive product. Some firms will require a change order for things like changing a paint color – which can result in no change in the budget.

Careful Planning is the Key

An excellent design-build professional will work closely with you from the earliest stages of your project. You need to define your creative vision and your functional needs from the beginning of your relationship.

A professional will ask you questions about your lifestyle, your family routines, and your functional needs to gain a deeper understanding of your project. The more time spent fleshing out ideas with your designer at this stage in the project before you finalize your contract, the less likely that you'll need to implement change orders.

When you receive your contract, make sure to compare it with the scope of work issued by your contractor. Both documents should clearly outline all of the included products, materials, fixtures, finishes, and services that your contractor will provide. It should also outline what is expected of you, for example, timely, scheduled payments, preparing the space by removing and safely storing personal items, being available to accept deliveries, etc.

If you do not see something in your contract that you thought would be included in the scope of work, ask about it! Thoroughly approaching the planning of your project with your designer and contractor is the best way to avoid costly change orders!

If you'd like to learn more or are planning a home remodeling project and you live in the West Central Alabama area, give the design experts at Toulmin Kitchen & Bath a call at (205) 366- 0807. Let us help you plan and achieve your creative vision for your home!