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Archive for June, 2011

Managing Change

Saturday, June 25th, 2011

When we’re on the job site, we want to make the most progress possible on our clients’ new home. Building is a dynamic and exciting process; one that we try to make trouble free and easy to understand. Once we get going, things happen quickly, so we work with our clients to make decisions well ahead of time to help ensure they get their home on time, on budget, as promised.

Before the first scoop of dirt is moved, we collaborate with our home owners to make most of the big decisions, but that is rarely the end of the process. Once we’re underway, owners often think of a few things they’d like to change. Such changes may range from a change in bathroom cabinets, a different floor pattern or material in the kitchen, or just adding an extra light switch or two.

We document such requests, called “change orders,” to make sure that all parties have a clear understanding of the scope and cost of the change. It is important for the homeowner to understand how change orders affect the building process. When owner and builder communicate well, the impact of change orders on construction schedule and budget can be minimized.

A change order made after construction begins always has a cost attached. The cost may be the time and labor it takes to make the change or it may be the price of additional materials or products required — sometimes both.

The timing of a change order has a big impact on such costs. Typically, the later in the building process, the more expensive the change order. Some changes, of course, are simply impossible or truly cost prohibitive, such as altering the foundation or adding a basement once we’ve started building a home’s structural frame.

We respect our clients’ desires to get exactly the house they want. We know that some finishes (or even floor plans) may be hard to visualize until they’re actually installed or built. Changes will happen! For that reason, we’ve become more sophisticated and systematic about managing change orders. Our process not only ensures good communication and provides assurances between everyone involved, but also helps us maintain the building schedule and minimize additional costs.

The change order process: The most effective change order processes follow a general pattern that creates a paper trail and provides reliable cost information up front, including:

  • Centralization. Your change order requests are managed by one person, typically your selections coordinator, to help ensure effective communication between everyone involved. This includes specialty trade contractors, suppliers, our job site managers, and, of course, our customer. We discourage owners from making special requests directly to a trade contractor, as this is a quick route to misunderstandings and disrupted schedules.
  • Documentation. Customer requests are transferred to an electronic or paper-based change order form that initiates a paper trail and helps ensure greater accuracy and communication.
  • Terms. We anticipate many of the changes our homebuyers make. We have a good idea of the cost and time most changes require. As a result, we can often communicate the terms quickly so that owners can make an informed decision in plenty of time to make the change or decide against it.
  • Confirmation. It’s important to everyone involved that no change occurs without a client signature. Clients must approve the cost and terms, as well as the style, finish, or other details about the change. In addition, clients must be aware of how the change may affect their move-in date or other aspects of the construction schedule.
  • Inspection. We may request a client to visit the new home’s job site when the alteration is being made so they can see it happen, ask any questions and insure satisfaction.
  • Payment. Costs for change orders may be billed separately, usually as soon as the change has been made and completed to a client’s satisfaction. Sometimes we ask for a percentage of the cost or full payment up front before making the alteration, depending on the type of request.

By using a dedicated, document-based change order system, our clients are assured that any changes they consider — whether minor or extreme — are taken care of in a timely fashion without confusion, miscommunication or unnecessary costs.