3 Tips for Keeping The Cost of Change Orders Down

    There's a photo that every homebuilder has seen and chuckled at. The photos shows two boats, a small dinghy and an enormous yacht, side by side. The name of the small boat is "building contract" and the name of the yacht is "change order."

    Why is that so funny to a builder? Because the change order is where the money is. Why? Honestly, it's because change orders are so difficult to execute properly with all the changes in plans, specifications, purchase orders, etc. There are many hours involved in coordinating with contractors, making phone calls to suppliers, and meeting with clients and field supervisors.

    The builder better make good money doing the change orders or he will go broke.

    So how do you as the building client keep from spending all your hard-earned money on change orders? 

    The answer to keeping home building change order costs down is simple, right?

    The answer is one of those simple-to-understand but difficult-to-execute things. Invest the time up front to get the house plan exactly the way you want it, and then make all of your material and fixture selections before the builder begins construction.

    It's a lot of work, but the payoff is huge.

    #1. The Details Matter

    Work with the builder to create a detailed set of house plans and a painfully detailed set of specifications so you both know every detail of construction down to the doorknobs. If you've thought through and listed all those details at the very beginning, your builder should be able to give you an exact price (not an estimate) of what it will cost to build that house.

    If your builder works on a cost-plus basis, he'll resist giving you a fixed price. It's up to you whether to take the risk of cost-plus, as the cost of the house could go up dramatically.

    #2. Make Your Style Choices Early

    Make all of your color selections for paint, flooring, countertops, brick, etc. while the builder is doing all his prep work, such as getting permits and surveying the location. Think through your choices carefully. If the builder doesn't offer decorating services, consider hiring a decorator you trust to help you make selections.

    Go into the selections process with the mindset that whatever you choose will be final and will be installed tomorrow. That will help you resist the temptation to change things later.

    #3. Don't Second Guess Yourself

    Once you've made your selections, relax and look forward to your home being built. Don't watch HGTV and start thinking about all kinds of stuff you didn't know you needed. If you're going to look for ideas, do it before you design your home. Set a deadline for incorporating new ideas and stick to it.

    Believe in your choices and don't second guess yourself! Remember that the perfect house has never been built, and it never will be. Your house will be awesome.

    Don't compare it to what you see on TV or what your friends might have. Comparison only makes you resent the blessings of others, and it robs you of the joy of blessings in your own life.

    If you invest time and money up front to think through all the details and then stick with your choices, the payoff will be huge. Your hard-earned money will buy a lot more house when it's planned in advance than it will if you're stuck paying for expensive change orders because you didn't plan well in the beginning.

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