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Change orders

How do you deal with change orders? When building a custom house there are many details to stay on top of. All builders have their ways of managing the little things as they pop up. The process can be quite overwhelming at times, and can even lead to big troubles  and extra costs if not managed correctly.

Here is a simple for instance that happened to me last summer. The client wanted the master bedroom door to swing the the left as viewed from the hallway. No problem. My policy is to have the clients go through the freshly framed up house with my head carpenter and mark out, on the floor, which way they want all doors to swing. I tell them to put a lot of thought into this as they will be living with it for years. I also let them know that door swing can effect furniture placement, light switch and receptacle placement, central vacuum connection placement, etc. Many of the other trades that are effected will be completed before the actual door is hung.

My client marked the swing on the floor. Now we have them mark where they want swithces and plug receptacles. Great. Are you sure? Now sign here. We inform them that to change things there is a cost. Here is a breakdown of what it would cost. Nope. They are good with the setup as marked. Electrical is done. Central vac is plumbed and wired. Door guys show up. Door is in. Now we are waiting for drywall hangers and the trim to be finished. Client comes by to check. She hates it. She wants the door to swing to the right.

Luckily we have it all in writing. We can change it but we must also review the placement of the other trades, or stuff to the client. We will have her mark it again, put it all on paper, and then redo the whole door and surrounding trades work.

The client was given a change order form in advance that spells out how much any changes will cost. Besides paying the cost of the trades involved, at X markup, she must also pay a change order fee, a damage fee (for any materials damaged in the removal process), a materials fee, and time management fee ( while we must rearrange schedules of other trades). If an inspector is involved, and we get to pay for that, we pass the along the cost to her. Simple.

How do you handle change orders? Any ideas that I may have missed?

Comment balloon 2 commentsKevin Robinson • November 29 2009 09:58AM


Sounds to me like you have it covered. As long as it is spelled out, in writing, and agreed to, just as you described.

Posted by Janna Scharf, Coeur d'Alene Idaho Real Estate Expert (Keller Williams Realty Coeur d'Alene) about 10 years ago

Kevin - Most customers have no idea what is involved in making changes; that's why they often question the "high fees" for making changes. Sounds as if you're covering the bases as good as possible.

Posted by John Mulkey, Housing Guru ( about 10 years ago