Change Orders, Is My Home Builder Ripping Me Off?

Change Orders, Is My Home Builder Ripping Me Off?

Most Homeowners are under the impression that Builders love Change Orders! In fact, people say, that's where the Builders make all their money!

Frankly, that's far from the truth. With Custom Home Building, Change Orders slow up the construction process and lead to disagreements with the Homeowners. Imagine, the Builder has the next two weeks tightly scheduled and you tell him you've changed your mind regarding those upgraded windows and the lead time for delivery is 4 weeks. The entire building process on your home just came to a screeching halt and the Builders cash flow projection just flew out the window as the bank draws will now be delayed.

Besides, the trades have all pulled off the job and are now working for another Builder across town. Your Builder has no idea when he can get them back working on your home. Just the rumor of a change order on your job can encourage the workman to pull off and work somewhere else. After all, they need to feed their family's and know they won't be getting paid until their work is complete and who knows when that's going to be now that things are changing.

The cost of a Change Order for a home under construction is difficult for the Builder to calculated as a modification can have multiple consequences way beyond the item that's changing. 

No matter what the cost of the Change Order, the homeowner usually feels that it sounds like too much! After all, who wants to hear their home is now going to cost a lot more! 

In reality, Builders actually end up loosing money on changes as they normally have ramifications to other cost items that even the Builder doesn't foresee. He's quoted the Owners a set about for the modification and now he has to tell them the Change Order is twice as much. You can just imagine how well that's going to go over!

Production builder change orders are an entirely different ballgame! Perhaps, this is where Builders got the rip off reputation. Upgrades and change orders for production builders are definitely profit centers. In fact, they are huge money makers for them. When I worked for a production build I saw mark ups well over 100%!

Custom building and production building is like night and day.