Short answer. Change orders are written modifications to the original contract that adjust scope, schedule, or price. Both parties must sign before work begins. Plan 5 to 15 percent of project cost in change orders on a healthy job. Verbal changes are not enforceable in California.
The three kinds of change orders
1. Owner-requested
Homeowner decides to change something mid-project: upgrade tile, move a wall, add a window. These are the most common and the easiest to manage. Always optional.
2. Hidden condition
Demolition reveals something not visible during bidding: water damage, knob-and-tube wiring, asbestos, slab cracks. Often unavoidable. Usually involves added scope to maintain code compliance or warranty.
3. Code or permit driven
Plan check or inspector requires changes during construction. Often a smaller cost but always required. Examples: additional egress window, smoke alarm count increase, structural hardware upgrades.
Anatomy of a proper change order
- Project name and contract number.
- Change order sequence number (CO 1, CO 2, etc).
- Date and scheduled effective date.
- Description of change in detail.
- Reason for change (owner request, hidden condition, code requirement).
- Cost (line items: labor, material, permits, markup).
- Schedule impact (added or subtracted days).
- Updated contract total.
- Updated contract completion date.
- Signatures of both parties.
Typical change order costs
| Change | Typical cost |
|---|---|
| Move a non-load-bearing wall | $2,500 to $6,000 |
| Add a window (no header change) | $2,000 to $4,500 |
| Upgrade tile from $5/sq ft to $15/sq ft (bathroom) | $1,500 to $3,000 |
| Repair hidden water damage to subfloor (10 sq ft) | $1,800 to $4,000 |
| Knob-and-tube wiring replacement (per room) | $3,000 to $7,000 |
| Foundation crack repair (10 linear ft) | $2,500 to $6,000 |
| Asbestos abatement (small area) | $3,500 to $9,000 |
How to keep change orders in control
- Finalize selections before construction starts (cabinets, tile, fixtures, paint, hardware).
- Walk the site thoroughly with the contractor before contract.
- Include a contingency in the budget (15 to 20 percent of construction cost).
- Define the change order markup percentage in the original contract.
- Require written and signed change orders before any work proceeds.
- Review the change order log weekly with the contractor.
- Decline owner-requested changes that fall outside the original vision unless the budget supports them.
Red flags on change orders
- Contractor proceeds with work and presents the change order after the fact.
- Change orders without itemized labor and material costs.
- Vague descriptions (e.g., "additional work as discussed").
- Repeated change orders for the same root issue.
- Markup over 25 percent on labor and material.
- Schedule impact not addressed.
For contractor selection, read how to choose a general contractor. For interview prep, see 22 questions to ask a general contractor. For full project planning, see whole house remodel checklist.
