Reality Check on Change Order Prices

9 years ago

last modified: 9 years ago

I recently signed a contract for our kitchen renovation and am already getting into change orders. So far the prices seem to be slightly high, but not unreasonable to me. I thought I would draw on the accumulated wisdom of this forum though, to see what others think.

To start, we're using full-inset cherry cabinets from Candlelight Cabinetry with a special glaze added over the finish, and level 2 granite countertops. Our original island plans called for a 21" sink base and 21" cabinet on one side of the island, and a 42" cabinet on the other side. It turned out though that the sink we chose requires a 24" base for an undermount installation, and, since we had enough space, I asked our contractor to make the island 6" longer using 2 24" cabinets on the sink side, and a 48" cabinet on the other side. The additional cost for this comes to about $550 pre-tax. Since our contract calls for a 20% markup on materials (10% overhead & 10% profit), this would imply that our contractors cost for the change would be about $460.

Meanwhile we're installing a hood liner with a cabinet over it. I noticed that the hood shown on the drawing was a bit shallow, and discovered that it used a specially-made Modernaire liner that's 20 5/8" deep. I requested an upgrade to MA's deepest liner (22 1/2" which I know is still too shallow, but it's the best I could do without getting into a custom order situation) and also asked that the roof fan be upgraded from 1,200 to 1,500 cfm. The pre-tax and pre-markup prices for these changes came to about $165 for the liner, $200 for the deeper cabinet and $195 for the fan.

In any event, before getting into any other changes, I'd appreciate hearing any opinions that others might have on this pricing.

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Comments (5)

User
9 years ago
Way cheap.
sjhockeyfan325
9 years ago
The additional cost for this comes to about $550 pre-tax. Since our contract calls for a 20% markup on materials (10% overhead & 10% profit), this would imply that our contractors cost for the change would be about $460.

I don't understand the math.
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greasetrap
Original Author
9 years ago
last modified: 9 years ago
The contractor is charging me $582 for the cabinet changes on the island which includes sales tax. Sales tax where I live is 6.35%, so pre-tax price is $547.25 (582 / 1.0635). Our contract calls for him to charge me a 20% markup on materials, so his price would be $456.04 (547.25 / 1.2). So if the cabinet company is charging him $456 for the cabinet changes, then he would add on $91 for his markup and $35 sales tax to get to the $582 he's charging me. I rounded to the nearest $10 in the prices I gave, as I thought this would be close enough.

I've already agreed to the 20% markup (although I'd certainly appreciate any comments as to whether this is reasonable or not) and there's nothing I can do about sales taxes. So my question is whether $456 wholesale/$547 retail is reasonable additional cost to swap out two 21" and one 42" high-end cabinets for two 24" and one 48" cabinets of the same quality (I've assumed there probably aren't any additional costs for labor or the countertop).

It seems reasonable to me but, as I don't know much about these things, I'd appreciate hearing other opinions.
PRO
Joseph Corlett, LLC
9 years ago
None of these changes are the contractor's fault. He deserves to be paid for and profit from the additional expense these changes cost him. His rates are completely fair.
greasetrap
Original Author
9 years ago
Joe, I never said that the changes were the contractor's fault or that he shouldn't be compensated for them. In fact, I explicitly agreed to a 20% markup on the direct cost of any changes. My situation is that the contractor is also the designer. I've been talking to him since last October and he came up with a very nice design. He's a very busy guy though, and it would take a couple of months for him to incorporate changes I requested into subsequent redesigns, and invariably he missed some of them. In addition, I wasn't allowed to actually take a copy of the design home with me until I signed a contract and made a deposit, so I was never able to look at things in detail until last week.

It got to the point where we needed to either sign a contract or walk away. I was pretty uncomfortable signing a contract knowing that I would need to make a substantial number of changes, but the contractor has a sterling reputation and seems pretty above board about everything, so I took a chance and signed the agreement.

As I said previously, I think the prices he quoted for the changes are reasonable once you back out sales tax and his markup. I have no idea what high-end cabinets go for though, so I was just asking if more knowledgeable people (like yourself) could let me know if the increase is reasonable. As Ronald Reagan said, "Trust but verify".

Reality Check on Change Order Prices

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sjhockeyfan325

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Reality Check on Change Order Prices

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sjhockeyfan325

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greasetrapOriginal Author

Joseph Corlett, LLC

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greasetrap
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