The Change Order Problem That Costs Contractors Thousands

One of the most common ways contractors lose money isn't from a bad bid or a slow job — it's from scope changes that never get documented.

A homeowner asks for something extra. You do it. Then at the end of the job, they either forget they asked for it, claim it was always part of the original scope, or simply refuse to pay for the additional work.

This situation plays out constantly in residential construction, and it's almost always preventable.

Most contractors skip formal change orders for a few understandable reasons:

The problem is that small changes add up. A few hundred dollars here and there across a project can easily become thousands — and without documentation, you have no way to collect.

A change order doesn't have to be complicated. It just needs to be written and signed before the work starts. At minimum, include:

Without a signed change order, you're in a difficult position if the homeowner disputes the charge. It becomes your word against theirs — and courts and arbitrators generally look for written documentation.

If you're dealing with a change order dispute right now, getting legal guidance early can help you understand your options before the situation escalates.

Build change orders into your process from the start. Tell homeowners upfront that any changes to the original scope will require a signed change order before work begins. Most reasonable homeowners will respect that — and the ones who push back are often the ones who would have caused problems later anyway.