One of the things that makes home remodeling shows so popular is the drama that inevitably unfolds. An expensive problem is discovered hiding under the floorboards or within the walls. The project budget doesn’t have room to address the issue, but the contractor can’t leave the situation unresolved. What will they do?
These scenarios aren’t isolated to home repair shows. If you’ve done much research before beginning your home remodeling project, you have probably encountered a horror story or two involving surprise discoveries that required additional work. While unforeseen issues can arise on any home remodeling project, they don’t have to be a crisis.
As with any major undertaking, a home renovation carries certain risks and potential setbacks. Being prepared for them ahead of time can make the difference between a frustrating project and a rewarding experience with your contractor. At the center of it is knowing up-front how the contractor handles change orders.
What Is a Change Order?
A change order, or additional work authorization, is an agreement to do any additional work that falls outside of the original project scope. Additional work can be a small change, such as installing different cabinets, or it can be an extensive repair of an unforeseen structural problem. In either case, the scope of the project has changed and needs to be authorized by the homeowner.
For homeowners, the most frustrating additional work authorizations occur when a problem is uncovered during demolition. The builder begins every project anticipating the potential issues that are likely to be encountered. However, they may discover underlying issues that couldn’t have been foreseen.
There is always a moment of discovery after demolition, when you see what’s behind the walls, or above the ceiling, or under the floorboards. They may discover anything from mold, to bad wiring, to structural issues.
An additional work authorization is simply a form that describes what the issue is, how much it will cost, and how long it will extend the schedule. Your contractor should document it clearly, discuss it with you in detail, and put it on the project record. This serves as a supplemental agreement to the primary contract.
How Do Contractors Handle Change Orders?
Some contractors use a contingency fund to address change orders. We don’t do that, because a contingency fund requires you to pay up-front for an issue that may not exist. And if an issue does arise, the contingency fund may not cover the repair. In that case, the contractor would have to come to you a second time to ask for more money.
Giraffe Design Build takes a different approach. If we suspect there will be additional work, we’ll discuss this possibility with you before we begin the project so that you understand the potential issues that could arise during the course of construction. We realize the importance of consistent communication with you, and we continually update you throughout the entire project.
We will also make recommendations for setting aside additional funds. We don’t want to charge for something on the front end that may not happen, so we communicate all of the possibilities and contingencies before construction begins.
If an issue arises during demolition, we address it with you at that time. This way, you aren’t surprised, and you don’t have to put down additional money up-front that may not be needed.
What If Your Renovation Needs an Additional Work Authorization?
Before you hire a builder, be sure that you know their process for addressing additional work. Some crews will do the work, then bill it after the fact. Homeowners are surprised to learn about the additional cost, and it can create messy problems.
At Giraffe, we promise to get your approval whenever possible, before we tackle an issue. We understand the importance of knowing the situation as soon as possible, so you have fewer surprises.
Best Practices Before Hiring a Contractor
Before you hire a contractor, it’s important to understand how they handle additional work authorizations, and to know what to expect from them. Don’t be shy about asking good questions, and take your time reviewing the contract. Start with these best practices.
Educate yourself on the pros and cons of hiring a contractor. Talk to friends, family and neighbors who have done home remodel projects. Ask how their home remodel contractor handled change orders. What worked well, and what didn’t work well?
Set expectations with the contractors you talk to, before you hire. Don’t hesitate to explain if you have little to no room in your budget for unplanned changes. Also make sure the contractor knows how much (and what kind of) communication you want if something unexpected arises during the project.
Review the contract
Change orders should be spelled out clearly in the contract. The defined scope of work will state exactly what’s included, what isn’t included, what you will need to provide, and what the contractor may discover. These are the types of items that may instigate a change order or additional work.
The contract should explain the entire discovery process, and include a list of potential changes that often occur in projects like yours.
Review payment terms
Some homeowners run out of money before the project is done, because the budget for such a large project can be difficult to manage effectively. As a result, each contractor will have their own payment terms for additional work.
These payment terms are often very different from the primary contract. Some builders will ask for 100 percent of the costs up front, while others will charge 50 percent up front and the balance upon completion. A few will charge the entire amount at the end of the project.
Be aware of the expectations before the project begins. Consider which billing approach will be a better fit for you than the others, and hire a contractor who can work within that.
Change Orders Can Be a Positive Experience
Additional work authorization can be a point of contention, but it doesn’t have to be. It can be a positive event that makes your home renovation project truly special. You may not always recognize it in the moment, but something small may make a big difference that takes the renovation to the next level.
At Giraffe, we do our best to anticipate every potential issue on the front end. When an unforeseeable situation arises, you have our pledge to do our best to walk with you through it. Our dedication to designing and building spaces that intentionally support the way you live is matched only by our commitment to customer service and bringing you real value and joy.
Call us today to start a conversation about your dream renovations.new home construction