This weekend we were talking to someone that just said, bid low and make up the difference with change orders. Well, this made my blood boil. So many times I see builders presenting low bids and really question “How can they do that?” Only to know in the back of my mind, they will be hitting the customer up with more money. There are legitimate change orders too. But some are not used properly.
A legitimate change order can be a simple customer request to add or deviate from the original plans or specifications. This can be a minimal charge or a higher amount depending on the change or addition. Most of the times, you will have to pay for the change order as it happens, and sometimes at the end of the job. Just depends on your project ant the agreement between you and your contractor.
Those that are not a good practice, in the beginning stages of the job, the contractor bid appears to be a lot less than other bids you received. If you don’t ask for details, you will not be comparing apples to apples. Let’s take for instance, in your mind, you did not mention that you wanted a Real fireplace verses a kit in your home. One builder might ask the question and know how to bid the fireplace correct. Where as the other builder might just give you a quote with a fireplace kit. The real fireplace will cost more. At this point, you might get a change order from the builder, stating you did not say that and they can not build one at the cost he quoted. Now on the other hand, some builder might throw the change in if it is not too much.
Another Change order during construction can come when the customer decides they now want to change the flooring to travertine verses laminate. This will be more money for the flooring upgrade. So you will need to pay the difference.
If some of the specifications and materials are not clear or precise, the builder can often use this to their advantage to charge more. Change orders can actually even cost you anywhere from 15% - 50% more depending on the point of change. Plus, the trouble the builder goes through with this change. If the change was due to a builder error, you should have no penalty fees.
So before you commit to a builder, always make sure you have the specifications defined, plans in hand, contract signed, and questioned answered on the change orders, budget items, schedules and more.
If you are shopping builders, layout the same plan, ideas, and more to each of the builders. This will allow you to compare apples to apples. If things are too far off, ask the builder to define his quote in details. Chances are if they are too far off, something is not included. Make sure you ask a lot of questions. Always get the bids in writing. Always sign that contract. It’s better to have something to fall back on verses nothing. When you check the references, ask them how many change orders they got hit with. Remember, if the change order was a change by the customer, that one don’t count. Only the change orders by the builder regarding what they did not include in their estimate.
For ALL Your Real Estate and Building needs or questions, call Debbie at (713)818-6658 or (830) 833-4249 / debbie@vallonerealestate.net .
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