A Guaranteed Contract Price
Hidden costs and spontaneous up-charges have become commonplace in the remodeling industry. Homeowners all but expect the bad news of “this is going to cost extra”.
Worse, many contractors throw out a low estimate knowing once they’ve got the job, they can charge for anything and everything. Sometimes the extra costs are legitimate: dry rot, bad wiring, old plumbing, etc. There are some things any contractor can’t know until the demolition has begun. But on the other hand, some bad-apple contractors will push as far as they can to get the most money out of every job.
So how do you, as a homeowner, protect yourself from over-paying when you decide to remodel your home?
Get a Fixed Contract Price in Writing
You should start with getting a fixed price from your contractor. This price should be in writing in the service contract you and the contractor sign before starting any work. BEWARE: some contracts will state in the “fine print” that the cost shown is only an estimate and prices may change without notice. If you see this clause, run for the hills. It is almost a certain thing that you’ll pay more than the original estimate.
One of the many benefits of the Design Build Process that we use here at North Light Builders is that you know up-front, before a hammer is ever pulled from a tool belt, what the entire project will cost. Our service contract states that price clearly, with WA state tax broken out so you know what you are paying us and what we are paying the state on your behalf. The price written down on the contract is not our “estimate” of what things might cost. It is a hard number that we as your contractor are contractually bound to.
But what happens if we find something unexpected?
Change Orders for Any Changes to the Work.
That Means a Fixed Price That Changes ONLY with Your Approval
The fact of remodeling, especially in older homes, is that unforeseen problems crop up. Often this takes the form of dry-rot (or water damage), bad or insufficient wiring, or degraded plumbing. These issues should come up during demolition and rough-in. When they do, your contractor should notify you as soon as they know the scope of the issue and how to address it. What you should expect at this point is something called a Change Order.A Change Order is an addendum to the service contract. It has a few critical parts to look for: a description of the work to be done, any affect the new work will have on the production schedule, a cost for the new work, and a signature line. Before any new work is done by the contractor, you should have the opportunity to review the changes and sign the Change Order.
This means that the only thing that alter the original contract price is YOUR signature. And keep in mind that Changes can be for more or less than the original price. If the contractor knew there was some existing water damage and it turned out to be much less than anticipated, you would receive a Change Order with a credit towards the contract price.
At North Light Builders we use a Fixed Contract Price for every project we take on. We honor that price no matter what. When unexpected things happen we examine the issue, figure out an attack plan, and present it to our customers. Upon the customer’s approval and with their signature, we then move forward to address whatever the issue may be. Our customers and our crews all know: No Change Order, No Change.
That way every one of our customers is able to rely 100% on the contract price given them up front, before any work begins.