@millworkman

Thanks!

In our contract.. no mention at all .. even my broker said doesn’t think there is fee.. but Only builder saying it.. what should i do..?

If you wish to continue with this builder, you need to get a written copy of his change request policy. Without that, you can't argue about any future surprise fees. If you don't wish to continue with this builder, you may be able to buy yourself out of the contract. But if you want to do that, get some good legal advice from a lawyer who specializes in residential construction contracts.

@Jennifer K

Thank you!

If i ask to Builder for change request policy .. he have to give me right?

It should have been spelled out in your contract. Usually, he shouldn't be able to just start charging you a change order fee if he didn't include it in the contract.

What type of contract?

Who owns the lot/land?

@chispa

thanks for your advise

the builder owns the lot

we just brough a new construction house.. and signed purchase agreement

we have agent who helped us buy this house.. sho should i ask her?

Did you have a construction lawyer look over the contract before you signed it?

@cpartist no we didn’t ..

we had only our real estate agent..

You need to decide if this is a hill you wish to die on. On we talking about 5 changes or 20? If you successfully argue against paying the change order fee he will still get his money, believe me, you will pay it one way or another.

@millworkman

yes we are ok to pay

maybe one time changing fee for all the change..

the problem is ..he is asking every single material upgrade as well…

in Kitchen i need to pay each 250$ or 500$ for upgrade counter top $(of course we pay different material fee), sink style change $, cabinet design change$.. same time bathroom upgrade ( each 250$ for everything..)

that’s why i dont understand too much

"the problem is ..he is asking every single material upgrade as well…"

Unfortunately it is typical, most tract or developer type builders charge that on EVERY change. Again if you argue and get him to drop the change order fee he will just raise the price on EVERY change to offset the cost, and probably double it just because.

Lio K:

You're failing to see the additional risk and subsequent monetary loss your requests place upon the builder. He deserves to be compensated for that. You're lucky it's not 2% with a $250.00 minimum.

@millworkman @Joseph Corlett, LLC

thanks for your answers

I don’t have any change policy from him.. even in this case .. he is right to charge every single things?

i just want to make it clear

if i have to.. i will

If the change order procedure is not clearly spelled out in the contract you do not owe him the change order fee. However you WILL Pay the fee one way or another. He will just add it into the cost he tells you for the change, plus the PITA charge...................

It is difficult to comment on a contract that I haven't seen, however, the builder doesn't necessarily have to reveal the change order fee in the contract. Production builds have a lot in common with manufacturers, in a very real sense they are constructing a finished product that you have agreed to buy on completion. Which is similar in many ways to buying a car.

They offer a home for sale with certain specifications and you agree to buy that home with those specifications. They may not need to reveal a change order procedure in the contract, because your contract is for the purchase of a particular home with particular specifications. Since that home is fully specified there doesn't need to be details on changes in the original contract. Any changes that you decide on are modifications of the original contract and they can largely charge whatever they want so long as you have the right to refuse. They can even charge you a fee for investigating a change that you later refuse if they notify you in advance.

This is not to say that your builder's contract and your state's statutes allow your particular builder to do this. However, it certainly can be done and often is.

@cpartist no we didn’t ..

we had only our real estate agent..

This is why it's always a good idea when spending 6 figures of your hard earned money to have your contract vetted by a construction lawyer so everything is clear from the start. The real estate agent gets paid from the builder so who do you think they want to protect?

Are these actually Change Orders? And what part of the construction timeline are they occurring?

For example "in Kitchen i need to pay each 250$ or 500$ for upgrade counter top $(of course we pay different material fee), if you have allowances, and you merely picked a more expensive countertop, there should not be a Change Order fee.

However, if say the "sink style change" was from a single to a double rather than just a selection of material from an allowance, that is more plumbing and a Change Order fee would be appropriate.

@cpartist

actually we have our real estate agen from our Company who introduced and builder has his own real estate agent..

in this case .. change something?

@3onthetree

actually when we take more expensive countertops.. he is asking 250$ fee as well as change fee .. we pay more for materials and then additional 250$ or 500$ .. that that’s why we are thiking it’s way too much… adding one more sink in bathroom he is charge1400$ ( sink valeur100$ then rest of money goes to plumbing and fee etc…)

@cpartist

actually we have our real estate agen from our Company who introduced and builder has his own real estate agent..

in this case .. change something?

And when does your agent get paid? When you pay the builder. So again, as nice as he/she is, what's his/her bottom line? To have you sign your contract with the builder so he/she can get his/her commission.

If these amounts bother you without having an understanding of the build process and your contract, pay a construction lawyer $800 for a couple hours to review and help you understand the process, allowances, change orders, delays, draw schedules, etc. per your contract. Or continue as the Builder is charging.

@3onthetree

thank you even we already sign it our contract

nothing is clear on this contract for changing fee.. if we hire construction lawyer ..do you think we can save some extra$ ?

Hiring a lawyer is seldom a way to save money. But it's an excellent way to inform yourself of your rights and obligations. Since you don't seem to know what those are, hiring a lawyer would be a good investment.

You are unlikely to save money on the upgrades you want to make by consulting any attorney. A better understanding of the process might change what upgrades you decide are important enough to pay for, that is likely the only benefit.

You have a purchase agreement and not a construction agreement. You have agreed to buy an existing home after it exists, that is similar to any other purchase of an existing home. You could agree to buy my current house and then ask how much would it be for me to remove my bathtub and install a walk-in shower, to which I could give you any price.

A construction attorney may be able to help or may not, as production contracts are not their specialization. A real estate attorney who is familiar with new builds may be a better option.

---

Certainly there is a benefit to fully understanding the contract before you sign it. If you are thinking of breaching a consultation may also be a good idea. However, the marginal benefit of having an attorney review the contract depends on the builder. You typically have little to no leverage to modify a production builder's contract. The larger the builder, the less leverage you have.

In my opinion, start with your realtor and see if they can communicate your concerns. Their broker likely has some insight on your issue and may be able to advise you on your next step. If they are no help see if you can find an attorney referral.

I personally wouldnt get an attorney. I don’t think you can win this. Just a two hour attorney time is 3 change orders. Bringing an atty on will be cost prohibitive and make the build stressful and contentious with the builder. Personally, I would pay the change orders.

@bry911

oh thank you so much..

yes i will contact to realtor then we wil see.. i really appreciate for your help!

i learn a lots. hopefully.. it will be done nicely

thanks

There are a few things to parse here.

First, it sounds like you are buying a production/tract home. If you signed a PA on an empty lot, there is typically a design center process that you go through where you make selections. Those selections determine the final price of the home. After those selections, your choices in the home design are generally over. It sounds like you either didn't do this process or you didn't do it well.

In our case (and as is typical), any change we made after the design center selections were finalized incurred a $250 fee (plus any material change cost). We were told this explicitly, but we also had a lot of meetings and conversations with the builder's agent prior to signing, so we were aware of how the process worked. We also had to pay for reviewing changes to the overall layout of the home. They didn't allow many, but we did request a change in length of the island, which was approved (consequently we paid the change fee and the additional counter & cabinet materials cost). We requested a few other changes, most of which were rejected.

If you signed a PA on an in-construction spec home, all of the design selections have already been made and possibly purchased (counters, lighting etc.). The actual house layout has also been set (# of sinks). So by making changes to those things, you are causing them to reconfigure their process, get new quotes from subs, buy more material, etc.

This is the difference between a custom build and a production build. If you are not happy with the selections in your current home, you could see if you could choose a different lot and make the design center selections yourselves (and add any available upgrades). But the builder will likely keep your initial payment.

@anj_p

oh thank you!

yes we don’t have too much .. we need to keep it if we don’t want to lose our deposit and time..

just agent from builder told us that we just need to pay different material price and now they are asking change additionally… that that’s why it‘s way to strange..

@Lio K that's actually not strange; it's pretty standard. They already had something picked out; if you want to change it they charge you the delta in material costs and charge you a flat fee for their time/change process. The $250 is most certainly weighted in their favor, but people have to process that change, get it in the books and make sure the change is followed through. That costs the builder time, which is not free.

Just to give you a hint of how production builders worked: I had to BEG for our builder not to install wire closet shelving in our house (we wanted to do our own closet systems after close). It nearly took an act of congress. They didn't want to NOT install it because if it got missed and the closets got installed, they would have to pay to have them removed and patch the walls. We weren't asking for money back, either...just not to have them installed.

The process is incredibly streamlined, and any change throws a wrench in that. It may seem like a small thing to change TO YOU, but for a production builder to screw with their process is a big deal TO THEM.

@anj_p

yes you are right for this point and it’s not we don’t want to pay him for change fee

so .. you mean that it’s normal to pay island cabine style chang, kitchen cabinet size extension, change sink style, upgrade contertop from Grantie to Quartz , bathroom cabinet style change, bathroom countertop material change..

each change we need to pay 250$ or 500$?

thanks

If you already have a signed contract with the materials you are now wanting to change already spelled out in the contract, then all I can do is echo what everyone else already told you - it's not an unusual fee.

I had a new home built for me close to 10 years ago now. That builder way back then charged a $250 change order fee after the contract was signed.

Once you sign the contract, they start ordering stuff. They're making plans to get materials to build your house. It only seems fair that you compensate them if you change your mind after the contract was signed.

@Ally De

no

even before we signed it

agent told us that all the materials we can change what ever we want then we just need to pay the different price..

that’s why we chose this house actually..

"each change we need to pay 250$ or 500$?"

Technically if you were to change the cabinet pulls from brass to chrome that is a change order and you would pay the fee. Paperwork, billing, purchasing and making sure the paperwork gets updated so the right item in the right finish gets installed the first time. As mentioned earlier the builder builds the same home with the same items over and over, anything that makes them take two steps back and have think you will pay for one way or another.

@Lio K Yes, each change has a fee. Ours were all $250 but every builder is different and it sounds like your builder has different fees for different changes. If you were planning on changing everything in the build, your own agent should have advised you to do a build yourselves instead of changing everything in the builder's in-process house. Any realtor who has dealt with a tract/production home would know about these fees. I'm sorry you were surprised by them but they are pretty much universal.

$800.00 would pay for 3 changes.