Renovation Budget Planning: Change Orders

There will always be surprise costs during a renovation once floors and walls are open

Budget planning is one of the most important parts of a renovation, at least for most of us! Costs can easily get out of control. Even if you get your contractor quote set and finishes all spec-ed, many renovators go into it trying to guess what might come up during the process. Will there be surprises hiding behind the walls or under the floors? Or will you have a change of heart in the design? Or what about adding things to the scope of the project? How much should you plan for and where are the common expenses?

We always recommend planning for all of these categories. Unexpected expenses are coming and chances are that no matter how strong your resolve to not make design changes or add additional scope of work, most people do. You’ll become very familiar with the term: Change Order.

A common additional cost in older homes is replacing or sistering joists cut by plumbers

Common Surprise Expenses

Once the walls are open, the joists are exposed, the wiring is in view, and the plumbing can be seen. You can expect something will need to be unexpectedly repaired.

Most renovations don’t include replacing floor joists in their bathroom renovation, but here in Brooklyn we don’t remember a bathroom floor that didn’t need joist repair or replacement. In a 100+ year old building no doubt it has gone through many renovations over the years. Plumbers are notorious for chopping straight through joists to run pipes, weakening the much needed structural features and causing sagging in the floor. If your building has multiple bathrooms it will compound the expenses.

Some renovators buy a property and on visual inspection the electrical might appear updated, only to open the walls and see it connected to ancient wires. In fact, depending on how big your renovation is most electricians will want to replace everything to pass inspection.

Termite damage, moisture issues, plaster repair…etc there is a lot of opportunity for unexpected expenses. You’ll want to go in with a budget ready to go. It will make finding them a little less stressful.

Most renovators change design choices during the course of renovation

Design Changes

No matter how much you think you won’t want to make changes in your design choices, you can bet that you will. There are things you can do to avoid it. Make sure you look at all of your finishes and design choices together. Gather samples and take them over to your space to view them in the exact location. If you can’t get a physical sample (or even if you can), put together a lookbook with photos of the finishes all on one page. It will give you a great idea how everything will go together. You’ll reduce the chance that something might not be right once it’s onsite and installed.

Once things are built and finishes are in place it’s inevitable that a few things might not be what you expected. Your reasoning might be that this is your chance to get it right and you’d rather spend the extra money now to not have to redo it later.

Adding Scope of Work

Once your renovation starts you’re going to be very aware of all things designed around you. At a restaurant you might love the tile or lighting, or you might see a reclaimed wood floor in a magazine that catches your eye. You might stay at a hotel that has an indoor/outdoor patio with a large glass slider that you now must have. Most renovations increase scope of work during the project. So it’s best to give yourself a bit of room to work in some of these changes.

Example of a spreadsheet we use with estimated costs, quoted costs, and added change order costs

How Much to Plan for?

Change orders are going to happen. If you go into your renovation with no room for them in your budget, you can bet you’ll be going over. We recommend planning a contingency for change orders of 15% of your renovation budget. You’ll want that available for those unexpected expenses, and if you don’t need it you’ll be able include some of your design and scope of work changes! When your contractor issues a change order expense you’ll know what to expect.

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