Avoid These Top 5 Homebuilding Change Order Mistakes

In today’s volatile market, with fluctuating materials, tight labor, and sky-high buyer expectations, precise control over your homebuilding change order process isn't just an option. It's the critical difference between solid profit and painful losses. 

We’ve identified the five most common change order mistakes that cost builders dearly, and we'll show you exactly how to fix them this month. 

The mistake: Approving changes without a complete financial picture—overlooking the hidden costs of materials, labor, subs, and critical schedule adjustments. 

Why it's deadly: Your job costs are fragmented across disparate systems: an Excel sheet here, an email chain there, an outdated spreadsheet everywhere. This fragmentation leads to builders risking a massive 10-20% margin erosion from unaccounted change orders—that's thousands of dollars per project. For cost-plus builders, it breeds client distrust. For production builders, it silently decimates your bottom line. 

The fix: Implement a connected solution. Tools like MarkSystems or BuildTools instantly link every change to your budget, vendor purchase orders, and project schedule in real time. When a client requests a change, you'll know its exact impact on dollars and days, on the spot. 

Your action step this month: Pick one recently finished job and audit all its change orders. Verify if every change had its true cost captured in your budget and properly billed. If not, you've pinpointed a critical process breakdown. 

The mistake: Relying on verbal approvals, casual texts, or quick nods during a site walk. 

Why it's deadly: You don't want to slow down a fast-moving job, or you assume the client is fully aligned. But when the invoice arrives, memory fades, and suddenly that "go ahead" text is forgotten. Without documented approval, you lose all leverage. Change orders transform into contentious arguments instead of clear revenue. This escalates into payment delays, strained relationships, and jeopardized referrals. 

The fix: Establish a bulletproof, repeatable client approval process that is digital, time-stamped, and permanently documented. Platforms like BuildTools empower clients to approve change orders with a single click, storing that undeniable record directly within the system for easy future reference. 

Your action step this month: Create a simple, digital change order template. Whether it’s within your project management software or a shareable PDF with a signature line, lock in this crucial process now before your next "friendly" handshake goes sideways. 

The mistake: A change is approved in the office, but the critical information never reaches the job site. Crews continue building to old plans, leading to costly demo, rework, and wasted time. 

Why it's deadly: Disconnected tools like emails, texts, spreadsheets, or even paper binders create information silos. Field crews either lack access to the latest updates, or the vital details are buried where they'll never be seen. This miscommunication cripples schedules, devours labor hours, and results in expensive rework. It also erodes trust with subs, trades, and ultimately, your clients. 

The fix: Ensure your field teams receive automatic, instant updates the moment a change order is approved. Platforms like MarkSystems and BuildTools offer shared schedules and daily logs that sync seamlessly across all devices, ensuring everyone is always on the same page. 

Your action step this month: Ask your lead super how they typically receive change order updates. If their answer involves paper or email, it's a clear signal to tighten up your communication process. 

The mistake: Tracking change orders with a mix of paper forms, emails, spreadsheets, and slack messages. Each one lives in a different place, managed by a different person. 

Why it's deadly: Your process may have started small and grown organically into a cobbled together system. But as your project volume expands, these cracks widen, and crucial details inevitably slip through. Manual change order processes lead to missed updates, billing errors, and costly delays. You end up wasting valuable time chasing paperwork instead of actively managing builds. 

The fix: Consolidate everything into one unified system that seamlessly connects the client, the crew, the budget, and the schedule. This integration ensures that a single change order automatically flows through every part of the build process, from approval to execution. 

Your action step this month: Sit down with your team and calculate how many systems or individuals are involved in handling a single change order from start to finish. If the answer is more than two, you have a significant efficiency problem worth solving. 

The mistake: The casual “it’s just a small change, we’ll cover it.” This seemingly minor oversight, multiplied across 10 jobs, suddenly translates into tens of thousands in lost revenue. 

Why it's deadly: Builders often hesitate to “nickel and dime” clients or risk slowing down a job, so minor changes go untracked and unbilled. But those “little” changes consume labor, materials, and introduce unforeseen risks. Once you establish a precedent of letting things slide, it becomes incredibly difficult to rein in. 

The fix: Implement a strict, company wide policy: Every change gets formally logged and reviewed. This applies whether it’s a $50 alteration or a $5,000 upgrade. Even if you ultimately choose not to charge, you'll have a clear, indisputable paper trail. 

Your action step this month: Pull a 60 day report of all work completed outside the original scope. Estimate the total value of any work that wasn't formally tracked or billed. Use this eye opening figure as your baseline for holding the line moving forward. 

Change orders aren’t the enemy. When managed correctly, they are opportunities to strengthen client relationships, protect your profits, and boost efficiency. 

Whether you're building five homes a year or 500, your process must safeguard your margins, prevent confusion, and keep your clients happy. That's precisely where BuildTools (for custom builders) and MarkSystems (for production builders) excel. 

With these tools, you can: 

• See the exact cost impact of change orders, instantly. 
• Get fast, clear, documented approvals from clients. 
• Update your field crews in real time, eliminating rework. 
• Cut admin time and eliminate billing delays. 
• And confidently protect your margins on every single job.