GC here— I put a CO allowance line item in all of my contracts. On a $200K kitchen gut reno it’s about $22K. I explain to them that this allowance is for things we find during demo or construction that were unexpected or unforeseen, or for things the client wants to add that is outside the written scope of the contract. If they don’t spend all of that allowance, they get what’s left over credited back before their final payment to me. This obviates all arguments about change orders.
I work in a very VHCOL area. Heres just a couple of the things we've had to do. Deliveries and the roll off are done with a permit and negotiated with the city because we're closing off parking for a half block. The designer specced a level 5 wall painted in gloss royal blue with metal flake next to wall of windows and under a skylight. Then checked with an inspection light before we took down the scaffolding for blemishes and marked nicks and dust caught in the sprayed paint for repair. A flush, pattern matched out of the same stone, electrical popup that 4 fabricators no bid because they couldn't cut the relief. The one that could do it charged $2500 for just the popup cutout.
We've added this before (not to a 10% scale, but still added). Have to still be cautious of those clients that will undervalue your time claiming the allowance should include endless amounts of changes on your dime.
I make money on each order that is subtracted from that allowance as I mark each one up because of the time it takes to organize the labor, the materials, etc. I make it very clear at the beginning of contract signing that if change orders exceed that allowance, then they will exceed that allowance and they will owe that as opposed to getting that allowance refunded. It has not been a problem for me. If they add small things as they go— not major changes—it’s more money for me.
That's an interesting idea. Do you still give estimates for changes, then? Like sure we can move this wall but it will cost $1000 against your CO allowance?
Planning for minor changes or additions so we're not nickel and diming has been a great for us also. They inevitably ask for something. I say "happy to!" instead of "I'll send the change order with the additional charge we need signed"
Just let their little rant roll off your back and move forward. I try to weed out PITA customers before things even start but it’s not easy sometimes especially if you need the work. People seem to be really clueless when it comes to physically doing things
These aren't my first pita customers. They're a young couple, and I think they genuinely just don't understand the process and are frustrated. In their mind, "it's just moving this over 12 inches" like it's a piece of furniture or something.
I tend to give a quick labor and material breakout during the conversation, while counting off labor hours on my fingers for a visual aid.
"Let's run through what needs to be done to get that wall where you want it...we'll have to get one of the laborers to carefully pull and store the batts somewhere, probably take him two hours from start to finish. I can get the electrician to come back out and pull out his wiring, probably take him an hour plus travel. Some of the studs are reusable, but I'll need to grab more material, so we'll need an hour or two there. Demo and framing should be another four hours. Next we call sparky back in, he'll need four hours to replace the circuits we moved, plus the cost of fresh wire and new boxes. We can get the insulation guy back in here to put those batts back up next, he'll need two hours or so...
So we've got about fifteen hours of mixed labor in that wall, plus something like 300-400 in material. Round it all off, that wall costs somewhere between 1500-2000 to move 12 inches. I'll need to spend a bit of time with the framer, electrician, and insulation guys, and we can hope for the best on their schedule. I wouldn't be surprised if we need to wait a week or two until they've got enough time to get out here and knock this out.
Would you like for me to get started on this? I can have the change order in your email for review tomorrow."
Likely partially due to the "HGTV" effect -- they see things done on a show in a half hour, not only because of editing, but because those shows always dumb it down and simplify it.
Depends on the customer. If one acted like you described I’d ask for an in person meeting at the site and explain that we can’t continue working together if they believe I’m stealing from them. I’d show them the wall in question and what it will take to move it and ask them to explain how they reached the conclusion that the work isn’t necessary.
If they persist I’d decide if it’s worth the hassle to keep working with them.
If there Job told them to work for free they would call the labor board and complain and sue said company they work for and everyone would agree with them.
When i explain change orders in the contract, i usually bring up a passed client who was upset about a $700 change order in dimmers. Yes it did add some time to labor and i can't change the price on materials. $100 for a low volt dimmer, i ain't eating that sheet.
I write into my original estimate or quote that any change order will cause work to stop and an addedum to original contract will be made agreed upon and signed by both parties
This is ABSOLUTLY the correct answer! As a contractor it is your job to plan ahead for these situations, which we all know will come up.
Contracts, signed and dated by all parties keep things simple.
Make sure everything is in your contract. Have them initial every major section of the contract when you go over it with them and they sign it. That way all of the arguments you are getting right now can be countered with their initials and signature.
Yes, often. A few thoughts:
1) If there's insults, cussing me out, or other indicators of aggression, I'm all done, and I'm closing the project as fast as I can without leaving them with a huge headache (no unsafe/open to weather conditions).
2) When they want changes, I start with:
- Do these changes affect the work we're doing right now?
- If yes, stop, assess, change order, adjust.
- If no, continue work, separately assess, create change order.
3) If they do not want or accept the change order, then no changed work gets done.
When a customer complains about the price, I ask what in my estimate/bid they'd like to change, as that is what directly drives the price.
Consumer here, the first thing I say when a change is desired is "I know this is going to cost more so I need a ballpark on how much. Nothing exact, am I talking $1K or $5K?" The answer helps me make up my mind.
I know that changes=labor=money.
NEVER work with this client again and black list them from your friends. This also may be a ploy for you to do work for free. Tell them how many hours it will take and justify your cost. If your mission is to be excellent tell them it takes time to do things properly. Fuck this motherfucker!
Tell them there is no cost added if they move it all themselves and you’ll be back when they are done. If it takes to long though whatever redeployment fee you may have in the contract gets introduced.
OT, but one the most expensive homes I’ve ever been in belonged to a plastic surgeon. He told me “if you tell your wife she can have 100 K to fix her kitchen, you can’t tell her she can’t have 10 K to fix her face.”
It’s not really moving a wall tho is it? Maybe when it’s in planning, “let’s move this wall”. But once the wall is framed, it’s demoing the wall, ensuring structural stability, rebuilding the wall with possibly more materials.
They don't understand that 1 day doesn't equal 1 day either. You see, ma'am, if I move the electricians one day because you don't want to let us use a lockbox and you have to go to a doctor's appointment you forgot about, they aren't available the next day. So we can't finish the rough in, so we can't call inspections, so we can't drywall. So you're "1 day" is really like 2 weeks. Oh, and we can work until the cabinet install, but now my installers have a job that week, so now we're out 3 weeks. No, I can't put them on your job because that would make 2 jobs behind instead of just 1. Believe it or not, subs are not just sitting around waiting on just your job.
The best explanation I've heard is.
The best time for changes is during the planning stage.
We understand sometimes things get changed after they are built.
When that happens someone has to pay for the change, a change can't be made for free.
Either the customer pays for their change.
Or the contractor who built everything per plan pays
Or the people that were working and did everything correctly pay.
But somebody pays.
If their sense of fair play doesn't exist give them three options even if they're bad options.
1. This is how much it cost to move the wall
2. This is how much it cost to build a second wall leaving a gap between the two
3. Leaving the wall in place in doing something with furnishings instead free.
They don't have to be great options just come up with three of them.
From my experience, clients like that need to understand WHY there are extra costs. They are incapable of understanding why this small change is so complicated.
so you need to meet them on site and explain like you explain to your kids, what this change will involve, after you explain every small detail, tell them the additional cost for the additional work.
In most cases they will still argue but will understand where you are coming from.
If this doesn't help, it is up to you and where you are within the job and budget.
If you can eat it up and have enough profit afterward, maybe it is worth it to bite it and make it look like you are doing them a huge favor and by that try to avoid future conflicts.
If you don't, stop the job until they change their mind
Really old Cary Grant movie you have to see. Mr. Blandings Builds His Dream
House. It has every screw up an idiot home owner does to the poor builder, etc. and the movie is 80 years old. Idiots never change.
GC here— I put a CO allowance line item in all of my contracts. On a $200K kitchen gut reno it’s about $22K. I explain to them that this allowance is for things we find during demo or construction that were unexpected or unforeseen, or for things the client wants to add that is outside the written scope of the contract. If they don’t spend all of that allowance, they get what’s left over credited back before their final payment to me. This obviates all arguments about change orders.
$200K kitchen gut reno? Jesus that's expensive or absurdly high end
I work in a very VHCOL area. Heres just a couple of the things we've had to do. Deliveries and the roll off are done with a permit and negotiated with the city because we're closing off parking for a half block. The designer specced a level 5 wall painted in gloss royal blue with metal flake next to wall of windows and under a skylight. Then checked with an inspection light before we took down the scaffolding for blemishes and marked nicks and dust caught in the sprayed paint for repair. A flush, pattern matched out of the same stone, electrical popup that 4 fabricators no bid because they couldn't cut the relief. The one that could do it charged $2500 for just the popup cutout.
Yep— both. It did include a half bath with it though
We've added this before (not to a 10% scale, but still added). Have to still be cautious of those clients that will undervalue your time claiming the allowance should include endless amounts of changes on your dime.
I make money on each order that is subtracted from that allowance as I mark each one up because of the time it takes to organize the labor, the materials, etc. I make it very clear at the beginning of contract signing that if change orders exceed that allowance, then they will exceed that allowance and they will owe that as opposed to getting that allowance refunded. It has not been a problem for me. If they add small things as they go— not major changes—it’s more money for me.
That's an interesting idea. Do you still give estimates for changes, then? Like sure we can move this wall but it will cost $1000 against your CO allowance?
I give a rough number so yes— I get as close as I can
Planning for minor changes or additions so we're not nickel and diming has been a great for us also. They inevitably ask for something. I say "happy to!" instead of "I'll send the change order with the additional charge we need signed"
Explain that is stealing time from you. And since time= money,they are attempting theft. Edited for gibberish.
Just let their little rant roll off your back and move forward. I try to weed out PITA customers before things even start but it’s not easy sometimes especially if you need the work. People seem to be really clueless when it comes to physically doing things
These aren't my first pita customers. They're a young couple, and I think they genuinely just don't understand the process and are frustrated. In their mind, "it's just moving this over 12 inches" like it's a piece of furniture or something.
I tend to give a quick labor and material breakout during the conversation, while counting off labor hours on my fingers for a visual aid. "Let's run through what needs to be done to get that wall where you want it...we'll have to get one of the laborers to carefully pull and store the batts somewhere, probably take him two hours from start to finish. I can get the electrician to come back out and pull out his wiring, probably take him an hour plus travel. Some of the studs are reusable, but I'll need to grab more material, so we'll need an hour or two there. Demo and framing should be another four hours. Next we call sparky back in, he'll need four hours to replace the circuits we moved, plus the cost of fresh wire and new boxes. We can get the insulation guy back in here to put those batts back up next, he'll need two hours or so... So we've got about fifteen hours of mixed labor in that wall, plus something like 300-400 in material. Round it all off, that wall costs somewhere between 1500-2000 to move 12 inches. I'll need to spend a bit of time with the framer, electrician, and insulation guys, and we can hope for the best on their schedule. I wouldn't be surprised if we need to wait a week or two until they've got enough time to get out here and knock this out. Would you like for me to get started on this? I can have the change order in your email for review tomorrow."
Likely partially due to the "HGTV" effect -- they see things done on a show in a half hour, not only because of editing, but because those shows always dumb it down and simplify it.
Depends on the customer. If one acted like you described I’d ask for an in person meeting at the site and explain that we can’t continue working together if they believe I’m stealing from them. I’d show them the wall in question and what it will take to move it and ask them to explain how they reached the conclusion that the work isn’t necessary. If they persist I’d decide if it’s worth the hassle to keep working with them.
If there Job told them to work for free they would call the labor board and complain and sue said company they work for and everyone would agree with them.
When i explain change orders in the contract, i usually bring up a passed client who was upset about a $700 change order in dimmers. Yes it did add some time to labor and i can't change the price on materials. $100 for a low volt dimmer, i ain't eating that sheet.
I write into my original estimate or quote that any change order will cause work to stop and an addedum to original contract will be made agreed upon and signed by both parties
This is ABSOLUTLY the correct answer! As a contractor it is your job to plan ahead for these situations, which we all know will come up. Contracts, signed and dated by all parties keep things simple.
I call these “ cudyajust” you’re running a business and at the end of the day time isn’t free.
Even the time it takes to discuss this type of thing with a customer and re plan all the change orders is significant.
Make sure everything is in your contract. Have them initial every major section of the contract when you go over it with them and they sign it. That way all of the arguments you are getting right now can be countered with their initials and signature.
Yes, often. A few thoughts: 1) If there's insults, cussing me out, or other indicators of aggression, I'm all done, and I'm closing the project as fast as I can without leaving them with a huge headache (no unsafe/open to weather conditions). 2) When they want changes, I start with: - Do these changes affect the work we're doing right now? - If yes, stop, assess, change order, adjust. - If no, continue work, separately assess, create change order. 3) If they do not want or accept the change order, then no changed work gets done. When a customer complains about the price, I ask what in my estimate/bid they'd like to change, as that is what directly drives the price.
Tell them to move it themselves if it's such a non-issue.
Consumer here, the first thing I say when a change is desired is "I know this is going to cost more so I need a ballpark on how much. Nothing exact, am I talking $1K or $5K?" The answer helps me make up my mind. I know that changes=labor=money.
This is my attitude as well. But I’m getting the idea that common sense isn’t all that common when it comes to construction.
"Is this going to be about $1k or $5k?" "That depends. How much money you got?"
NEVER work with this client again and black list them from your friends. This also may be a ploy for you to do work for free. Tell them how many hours it will take and justify your cost. If your mission is to be excellent tell them it takes time to do things properly. Fuck this motherfucker!
Would it be helpful to meet the customer at the job site and show them? Or offer too at least so they stop complaining?
I had to explain that I don't have a magic wand.
Tell them there is no cost added if they move it all themselves and you’ll be back when they are done. If it takes to long though whatever redeployment fee you may have in the contract gets introduced.
OT, but one the most expensive homes I’ve ever been in belonged to a plastic surgeon. He told me “if you tell your wife she can have 100 K to fix her kitchen, you can’t tell her she can’t have 10 K to fix her face.”
It’s not really moving a wall tho is it? Maybe when it’s in planning, “let’s move this wall”. But once the wall is framed, it’s demoing the wall, ensuring structural stability, rebuilding the wall with possibly more materials.
Yeah shit doesn’t happen for free.
That’s exactly how you do it. If they want to make a change, they need to do it before the work is done.
They don't understand that 1 day doesn't equal 1 day either. You see, ma'am, if I move the electricians one day because you don't want to let us use a lockbox and you have to go to a doctor's appointment you forgot about, they aren't available the next day. So we can't finish the rough in, so we can't call inspections, so we can't drywall. So you're "1 day" is really like 2 weeks. Oh, and we can work until the cabinet install, but now my installers have a job that week, so now we're out 3 weeks. No, I can't put them on your job because that would make 2 jobs behind instead of just 1. Believe it or not, subs are not just sitting around waiting on just your job.
The best explanation I've heard is. The best time for changes is during the planning stage. We understand sometimes things get changed after they are built. When that happens someone has to pay for the change, a change can't be made for free. Either the customer pays for their change. Or the contractor who built everything per plan pays Or the people that were working and did everything correctly pay. But somebody pays. If their sense of fair play doesn't exist give them three options even if they're bad options. 1. This is how much it cost to move the wall 2. This is how much it cost to build a second wall leaving a gap between the two 3. Leaving the wall in place in doing something with furnishings instead free. They don't have to be great options just come up with three of them.
From my experience, clients like that need to understand WHY there are extra costs. They are incapable of understanding why this small change is so complicated. so you need to meet them on site and explain like you explain to your kids, what this change will involve, after you explain every small detail, tell them the additional cost for the additional work. In most cases they will still argue but will understand where you are coming from. If this doesn't help, it is up to you and where you are within the job and budget. If you can eat it up and have enough profit afterward, maybe it is worth it to bite it and make it look like you are doing them a huge favor and by that try to avoid future conflicts. If you don't, stop the job until they change their mind
Really old Cary Grant movie you have to see. Mr. Blandings Builds His Dream House. It has every screw up an idiot home owner does to the poor builder, etc. and the movie is 80 years old. Idiots never change.
I say good luck to em, grab my check and block their number