How can you avoid (or at least significantly reduce) change-order charges?
Plan, Plan, Plan the details during the design stage. If you’re building a custom or semi-custom home, thorough construction planning will take longer than the construction process. Be patient and don’t allow yourself to be rushed. I know you’ll be anxious to break ground, but an insufficient construction planning process will turn what should be a fun experience into a nightmare.
Chose an architect who offers 3-D design. Some people can “walk through” a home in their head by looking at two-dimensional plans. If you’re not one of them (and many people aren’t), take advantage of 3-D design software. This amazing technology will allow you to walk through your home while it’s still on paper. And it’s much less expensive to make corrections, changes, and/or additions to paper than to brick, mortar, or drywall.
Select your construction allowance items before signing the contract. You need to make these selections anyway, so why not go through the process when it’s to your financial advantage. Here’s why:
Builders are usually in a competitive situation when vying for your business, so many tend to keep construction allowances on the low side. Unfortunately, such estimates rarely represent the real world.
I’ve spoken with many homeowners who went with the lowest bidder but ended up paying more for their home than the highest bidder’s estimate. Don’t put yourself in this situation. Establish a more accurate bottom line by making your selections before signing the contract.
No matter how accurate the builder would like to be with allowance figures, he/she has no idea what you’re going to select. You wouldn’t let the builder choose for you esthetically—why let him/her choose for you financially.
You can avoid many construction delays caused by last-minute or late selections and/or back ordered products.
I’ve witnessed instances where the homeowners were called out of town due to a family emergency during the construction of their home. Because they were unable to make the next round of selections, the entire project came to a screeching halt and their move-in date was delayed several months. Because construction exceeded the maximum date of their construction loan, they incurred a higher interest rate. If they’d made their selections in the beginning, the project could have continued on schedule, and they’d have saved thousands of dollars in interest over the life of the loan.
Make sure your builder is on board with how you want to do business. Talk with potential builders, explaining how you’d like to avoid as many contractor change orders as possible by detailed upfront planning and by making your selections prior to signing the contract. Many builders will be thrilled with the prospect of fewer change orders. If you find a builder with strong objections, it may be that he/she relies heavily on construction change orders as a profit center. A builder with this business model will not be a good fit for your project.
A tool designed to help you plan the details in the beginning of your project. The Difference is in the Details: The Homeowner’s Planning Guide for Building a Functional Home is a unique, photograph-filled e-reference guide created specifically to help homeowners and professionals alike thoroughly plan a building project. The Table of Contents gives you a good overview of the wealth of tips, reminders, ideas, and building lessons depicted in this detailed e-tool.
Visit www.differenceinthedetails.com for more information, a link to the Table of Contents, and/or to purchase and download your copy.
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As many people who are reading this know, there are generally two classes or types of options selections. 1) There are the decorative materials (lighting, tiles, carpet), but even before that there are the 2) structural options, where your choices may involve moving walls or even changing roof-lines. For those larger changes, some architects and designers (e.g. “design-build” firms) are using online tools for digital design collaboration that can digitally “pre-build” a structure – right down to the position of specific joist hangers – using web-based, real-time 3D BIM (building information management) virtual environments. One such tool, SAPPHIRE™ Viewer from MiTek is experiencing rising adoption among builder, architects, and engineers, and they use Viewer to link the component manufacturer, or “CM,” (the “truss shops” that make roof trusses, floor trusses, and wall panel systems) with your builder. With this kind of pre-build capability, you can make structural options changes and still know that what you have specified is even buildable! My recommendation (as a widely published writer on residential building) is to bring your component manufacturer in early, before you even break ground. The CM can pre-design a 3D model of the structure…and share the viewable model to resolve complex framing details. This can cut “change orders” dramatically and potentially save a great deal of money that would otherwise be wasted.