What Change Orders Are
A change order is a modification to the original contract scope, signed by both the homeowner and contractor before additional work proceeds. It specifies:
- What is changing (added, removed, or modified work)
- Why the change is needed (discovery, homeowner request)
- The cost impact (increase or decrease to contract price)
- The schedule impact (days added or removed from the timeline)
A signed change order is the mechanism that keeps remodels on budget. Without one, costs are verbal and unenforceable. Any contractor who proceeds with out-of-scope work without a signed change order — or presents a bill for unauthorized work at the end — is operating outside professional standards.
The Most Common Causes of Budget Overruns
- Hidden conditions during demolition: Water damage, mold, rotted framing, outdated electrical, plumbing that doesn't meet code. These are genuinely unpredictable and legitimate change orders. Experienced contractors factor a contingency for older homes.
- Homeowner scope changes: "While you're in there, can you also..." These are the most controllable cause of budget overruns. Every addition or change mid-project costs more than the same work planned from the start.
- Allowance busting: Contracts often include "allowances" for items like tile, fixtures, or appliances. If you select items costing more than the allowance, you pay the difference. Vague or low allowances are a significant source of surprises.
- Late material changes: Changing your tile selection after the order is placed may involve restocking fees, replacement lead times, and labor to re-price the work.
How to Minimize Surprises
- Make all decisions before signing: Select every fixture, tile, and finish before the contract is signed. Decisions made in haste during construction cost more.
- Ask for detailed allowances: If the contract includes allowances, ask what they were based on and whether they're realistic for your selections. Get specific line items, not vague totals.
- Include a contingency: Budget 10-20% over the contract price for contingencies, especially in older homes. If you don't use it, great.
- Get any change in writing before it starts: No matter how small — a different tile pattern, an added outlet, a changed fixture — get a signed change order first.
- Pre-demolition inspection: For critical areas, ask the contractor to do a limited pre-demo inspection before finalizing the contract — checking for obvious issues behind accessible areas.
Frequently Asked Questions
What is a change order?
A formal document modifying the construction contract — describing the change, reason, cost impact, and schedule impact. Signed by both parties before work proceeds.
What causes the most unexpected costs?
Hidden conditions discovered during demolition, homeowner-initiated scope changes, allowances that don't match selections, and material changes mid-project.
Can I negotiate change order prices?
Yes. Ask for itemized breakdowns, compare to market rates, and be prepared to discuss scope additions that were within the contractor's reasonable anticipation.
Find Remodeling Help in Your City
RemodelerSource is an educational resource. Contract terms and change order procedures vary. Always have a written, signed contract before work begins and signed change orders before any out-of-scope work proceeds.