Minimizing Change Orders by Being Upfront

NAHB Remodelers
Published

Remodelers know that change orders are a necessary evil of helping clients transform their home into their dream home. And in today’s market, rising costs and lingering supply-chain disruptions can make projects more complicated.

Matt Emmons, CGR, president of Emmons Construction in Tulsa, Okla., says communicating with clients early and often is the key to taking care of business and keeping clients happy.

And internal communication is equally important to Emmons, who says he works closely with the designer, architect and the rest of the project team to carefully detail the scope of work before going to contract.

"I try to head off the change orders, by laying out the scope of work and choosing materials before work begins," he said. "We include a clause in our contracts that says if change of work requires a change in price (for labor or materials), it must be written out and signed by both parties before being performed."

Getting advice from fellow NAHB Remodelers has been a big help for a small-business owner like Emmons, who has been a member of the HBA of Greater Tulsa and its Remodelers Council for the past seven years. Having a small staff, he looks for any opportunity to minimize the potential of extra paperwork.

"I'm the only one in the office, so I've got to write up all the paperwork," he said. "When we do have to do change orders, I use a standard form where I can just plug the details in and go. I also have a contingency number built into my contracts, so we can skip the paperwork for small changes."

Matt Emmons Tulsa Remodeler of the Year

Emmons (center) was honored by the HBA of Greater Tulsa as the 2021 Remodeler of the Year. The HBA's CEO Jeff Smith (left) and its 2021 president Jeff Starkweather (right) presented him with the award.

In the last few years, volatility in the price and availability of materials has led to remodelers, including Emmons, to add escalation clauses to contracts. He used the sample from NAHB and made a few modifications.

Emmons makes it a point to review prices with his clients both verbally and in writing to ensure everyone is on the same page. “For the most part, clients have been very understanding; it’s a crazy world right now with crazy prices.”

In addition to pricing changes, the supply chain disruption has impacted the availability of materials, which can cause delays.

Emmons recommends remodelers set the expectations before the project begins. “We order materials, such as tile, hardware, plumbing fixtures and electrical fixtures to make sure we have it in hand before starting the demo,” he said. “We make sure the selections they choose are available, and if not, we help them make a different selection.”

If a client has their heart set on something, Emmons recommends making it crystal clear to the client how the delay will impact the project. “Now more than ever, it’s important to be upfront with clients,” he said.

NAHB offers a wealth of user-friendly resources for remodelers and HBAs as they look to promote National Home Remodeling Month in May. Customizable press releases, articles and public service announcements are all available in a consolidated tool kit. Visit nahb.org/remodelingmonth for more information, tips and resources.

National Home Remodeling Month is sponsored by:

Westlake Royal Building Products

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe

Latest from NAHBNow

Regulations

Jun 18, 2024

Treasury Announces Crackdown on Certain Partnership Transactions

The Department of Treasury and Internal Revenue Service announced a crackdown — and new disclosure requirements — on “basis shifting” transactions used by partnerships that share common ownership. The Biden administration estimates this move could generate an additional $50 billion in tax revenue over the next decade.

Regulations

Jun 18, 2024

Treasury Releases Final Rules for Energy Tax Credit Prevailing Wage, Apprenticeship Bonuses

The Inflation Reduction Act modified and extended many energy tax incentives used in residential construction, including requiring taxpayers to meet prevailing wage and/or apprenticeship requirements in order to claim the full value of the tax credit. The Treasury Department and Internal Revenue Service (IRS) have now released final regulations on these labor requirements.

Awards

Jun 18, 2024

NAHB Recognizes Exemplary State and Local Association Programs

NAHB recognizes HBAs who have delivered top-notch service and deployed successful programs within the past year with the Association Excellence Awards.

View all

Latest Economic News

Economics

Jun 18, 2024

U.S. Households Real Estate Asset Value Rises to Start 2024

The market value of household real estate assets rose from $44.90 trillion to $45.84 trillion in the first quarter of 2024 according to the most recent release of U.S. Federal Reserve Z.1 Financial Accounts. Over the year, household real estate assets were 7.75% higher.

Economics

Jun 18, 2024

Single-Family Permits Holding Steady in April 2024

Over the first four months of 2024, the total number of single-family permits issued year-to-date (YTD) nationwide reached 336,124. On a year-over-year (YoY) basis, this is an increase of 25.3% over the April 2023 level of 268,205.

Economics

Jun 17, 2024

Hispanics Comprise 31% of the Construction Workforce

Diversifying the construction labor force is a key strategic goal given the ongoing skilled labor shortage. The latest labor force statistics from the 2022 American Community Survey show that Non-Hispanic White people account for the majority of workers in the construction industry (57.5%). However, Hispanics make up close to one-third of the construction labor force (31.1%), followed by Black people (5.1%), and Asian people (1.8%).

Economics

Jun 14, 2024

NAHB Builders Report 22% All-Cash Sales in 2024

Up to this point in 2024, the median builder has sold 22% of its homes to buyers who used all cash to pay for them (i.e., did not take out a mortgage), according to a recent NAHB survey. The survey took the form of a special question appended to the instrument used to collect data for the May NAHB/Wells Fargo Housing Market Index.