Change Orders 101: How to Avoid Costly Surprises

What Are Change Orders in Construction?

Change orders in construction are written documents that change the agreed scope, price, and/or schedule of your build. A change order typically includes:

• What is being changed (the exact scope change)
• The cost difference (added cost or credit)
• The schedule impact (if any)
• Signatures/approval before the work proceeds

Think of change orders as guardrails: they prevent “handshake changes” that later create confusion, billing disputes, or delays.

Why Change Orders Happen (The Most Common Triggers)

Most change orders fall into a few predictable categories.

1) Owner-Requested Scope Changes

Examples:

• “Let’s add a door to the patio.”
• “Can we move this wall?”
• “We want more recessed lighting.”

These are normal, but timing matters. The later the change, the more likely it affects schedule and budget.

2) Design Selection Changes

Examples:

• Switching flooring after ordering
• Changing cabinet layout after rough plumbing/electrical
• Upgrading countertops after templating

3) Allowances and Upgrades

• If your contract includes allowances, your final cost depends on what you select.
• If you choose items above the allowance, that creates an upgrade cost.
• If you choose items below the allowance, you may receive a credit (depending on contract terms).

4) Site-Driven Changes (Especially on the Gulf Coast)

Some changes aren’t preference-based—they’re site-based.

Examples:

• Additional grading or drainage work
• Utility extensions farther than expected
• Unforeseen soil conditions

These vary by property and jurisdiction. A site evaluation helps reduce surprises, but not every variable can be known on day one.

Mini Table: Types of Change Orders and How to Prevent Them

Type of Change Order	Common Example	Best Prevention
Scope changes	Adding a room, moving walls	Lock the plan before permits and framing
Selection changes	Switching flooring/cabinets late	Make selections early; confirm lead times
Allowance overages	Picking higher-end fixtures	Track allowances and running totals
Site conditions	Extra drainage or fill	Site visit + early feasibility review

The Real Cost of “Small” Changes

A change might look minor on paper, but it can trigger a cascade:

• Rework (remove/redo installed items)
• Trade rescheduling (electrician returns later = schedule shift)
• Material delays (new order lead time)
• Extra coordination and inspections (requirements vary by jurisdiction)

Example: Moving a sink location can affect plumbing, cabinetry, countertops, and sometimes electrical—so it’s rarely “just one change.”

How to Minimize Change Orders (Without Feeling Boxed In)

1) Finalize the Plan Before Permits and Framing

The cheapest time to change something is on paper. Once permits are pulled or framing starts, changes can require redraws and re-approvals (requirements vary by jurisdiction).

Practical tip: Walk through your plan room-by-room and imagine daily routines—where shoes go, where backpacks land, where trash gets taken out, where groceries enter.

2) Make Selections Early—Especially Long-Lead Items

Certain choices can drive schedule:

• Cabinets
• Windows/doors
• Specialty lighting
• Tile and specialty flooring
• Certain countertop materials

If you decide late, you may either delay the build or have to pick a substitute.

3) Understand Allowances Like a Pro

Allowances are not “free upgrades.” They’re placeholders for selection categories where final pricing depends on what you choose.

Do this:

• Ask what’s included vs. allowance-based
• Request examples within the allowance range
• Track a running total as you select finishes

4) Set a Simple “Change Rule” for Your Family

A rule keeps emotions from driving expensive decisions:

• “We only change something if it improves function, not just looks.”
• “We bundle changes and submit once per week.”
• “No changes after drywall unless it’s critical.”

5) Treat the Site Like a Budget Line Item

On the Gulf Coast, drainage and access can matter as much as finish selections. If you’re building on your land, ask early about:

• Grading and water flow
• Culverts/drive access
• Utility distances and extension costs

Checklist: Before You Approve a Change Order

Use this anytime you’re considering a change.

Change Order Approval Checklist:

• What exactly is changing? (Written description + drawings if needed)
• Is this a scope change, allowance overage, or upgrade?
• What is the total cost impact (materials + labor + tax/fees if applicable)?
• Does it affect any other systems (plumbing, electrical, HVAC, cabinets, counters)?
• What is the schedule impact (days/weeks), if any?
• Does this require rework or re-inspection (varies by jurisdiction)?
• Are we changing something that’s already ordered or installed?
• Did we compare it to our allowance or budget target?
• Do we understand the “domino effect” of this change?
• Is it worth it for long-term function and resale value?

Communication Tips That Prevent Surprise Costs

A lot of change order frustration comes from unclear communication. These habits help:

• Put decisions in writing (even simple “approved” messages).
• Ask for pricing before approving work.
• Request a running change order log (so you always know your total).
• Clarify who approves changes (one decision-maker prevents confusion).
• Ask what deadline applies to your decision (especially before rough-ins and drywall).

Key Takeaways

• Change orders in construction are formal, written approvals that change scope, budget, and/or schedule.
• The best prevention is early planning: lock the plan and make selections before ordering and rough-ins.
• Allowances can create surprises if you don’t track them—treat allowances like a budget line item.
• Small changes can trigger larger costs through rework, trade rescheduling, and lead times.
• Gulf Coast sites can introduce necessary scope changes (drainage, utilities, access), so a strong site review matters.

FAQ: Change Orders in Construction

Are change orders normal in custom home building?

Yes. They’re common, especially when homeowners change selections or scope. The goal is to minimize them and keep them documented.

Do change orders always increase the price?

Not always. Some changes can result in a credit, but it depends on your contract terms and what has already been ordered or installed.

When are changes the most expensive?

After rough-ins, drywall, or after materials are ordered/installed. Late changes often require rework and schedule shifts.

What’s the difference between an allowance and an upgrade?

An allowance is a set budget amount in your contract for a category. An upgrade is choosing items above what’s included or above the allowance amount.

Can change orders delay my build?

Yes. Changes can affect trade schedules, material lead times, and inspections (requirements vary by jurisdiction).

How can I track my budget with multiple change orders?

Ask for a running change order log and keep a simple total of approvals so you always know where your budget stands.

What site issues most often cause change orders on the Gulf Coast?

Drainage/grading needs, utility extension distances, and access/driveway work are common variables—but every property is different.

What should I do if I’m unsure about a change?

Pause. Ask for pricing, schedule impact, and whether it affects other systems. If it’s not improving function, consider waiting.