How much will it really cost to renovate in NYC? Tips for avoiding change orders to stay on budget
Renovating in New York City is often expensive, complicated, and time-consuming. One thing it shouldn’t be—even in New York—is hair-raising. But being handed a costly change order (or several) in the middle of your project can evoke precisely that feeling.
“Imagine buying something for $50,000 and, after paying $35,000 of it, the total price goes up to $75,000, and you have no choice but to pay for it all. That’s basically how change orders work in the home renovation arena. It’s absurd,” says Aaron Popowsky, CEO and founder of Gallery Kitchen & Bath, a 42-employee, seven-year-old, design-and-build renovation company based in New York City.
Remodeling TV shows certainly don’t help.
“Having a contractor remove a wall, ‘unexpectedly’ discovering plumbing behind it, and then increasing the price and timeline may make for great prime-time drama, but it’s way less exciting in real life,” says Popowsky. “If you’re dealing with a reputable contractor, you shouldn’t expect change orders. At Gallery Kitchen & Bath, we take that a step further. We guarantee a change order-free process unless you decide to adjust your plans.”
Are change orders intentional?
You can usually trace a change order to one or two factors.
“Unfortunately, there are contractors who intentionally omit certain elements of a renovation from their proposals to provide a lower initial price. It’s not rare, and this could be the source of a change order in the middle of a project,” says Popowsky.
It’s more common, however, for contractors to simply miss things when scoping a project, if they don’t do it thoroughly. It’s not intentional, but when things they missed at the outset come up later, it still stinks. Either way, you’re stuck with a change order if you want your project to be completed.
“Any good, experienced contractor should spend the time necessary to scope your project, understand its variables, and tell you about them before you ever sign a contract,” says Popowsky, whose design-and-build firm specializes in full-service luxury renovations in Manhattan, Brooklyn, and parts of Queens.
How to avoid the wrong kind of change orders
One of the most common renovation tips is to add at least a 10 percent cushion in a renovation budget just for change orders.
“That’s all well and good—as long as that money is reserved for extras you decide you want along the way—rather than addressing an ‘unexpected’ condition that could have been foreseen at the budgeting stage,” says Popowsky. “If you decide mid-project that you want a marble countertop or custom cabinet, your 10 percent cushion will be well-spent.”
Here’s how to protect yourself from unnecessary change orders.
1. Work with a turn-key contracting firm
Avoiding change orders means incorporating every aspect of your project into the initial proposal. Your project doesn’t have to be unpredictable, especially if multiple experts analyze it first.
“A full-service, design-and-build firm like ours can account for everything your project entails—architectural drafting, design, demolition, construction, and finishes—from the start,” says Popowsky.
2. Consult your building’s alteration agreement
If you’re renovating a co-op or condo, make your contractor aware of all the work your board’s alteration agreement imposes. Do you need a waterproof membrane in the kitchen or bathroom? Do you need new plumbing installed to the risers?
“Your contractor should include those in the proposal,” says Popowsky. “Ask how the contractor plans to meet the requirements and how much each element will cost.
3. Review your finishes and fixtures
When you receive your estimate, carefully look over the allowances for your finishes and fixtures, especially if you’re expecting luxury.
“If a contractor lowballs your initial estimate, this might be where an expensive change order materializes along the way,” says Popowsky. “Emphasize your goal of including high-quality finishes, and if the costs seem low, ask how the contractor plans to keep them that way.”
4. Take into account permits and third-party services
Renovations involve more than just a design and a construction crew. They require permits, filing fees, architects, and permit expeditors.
“Ask a potential contractor whether those services are included in the initial proposal and whether they’re in-house or outsourced,” says Popowsky. “You don’t want to be hit with surprise fees or delays from a third party. Our team at Gallery Kitchen & Bath includes all of those services—we take care of everything about your renovation from start to finish.”
5. Consider what ancillary work your project could trigger
Often, the work you want to do requires other work to be done first. This factor is easily overlooked, causing change orders down the line.
“A good contractor will identify these needs upfront,” says Popowsky. “If you want to remove a wall, for example, that could trigger electrical rerouting, channeling walls, and refinishing them with skim-coat. Some firms might only price the wall removal, leading to a big surprise when the other costs crop up later.”
Case study: The Gallery Kitchen & Bath change order-free renovation
“A recent client of ours wanted to buy a seven-figure Manhattan apartment. The place needed a lot of work, and the customer had to know how much it would cost before committing to buy it,” says Popowsky.
“We approached the project as we do every project,” says Popowsky. “The introductory phone call lasted about 45 minutes, giving us time to truly understand the client’s goals while giving the client an opportunity to ask any questions.
“After that, we visited the site and spent more than an hour assessing the apartment’s condition and the scope of the renovation. During this visit, we also reviewed the board’s alteration agreement, including riser diagrams to determine the extent of work required. This level of detail is vital to avoiding unknowns and change orders.”
Next, Gallery Kitchen & Bath met off-site with the client for more than two hours to determine what level of finishes the client wanted, to discuss the layout options, to explain cost implications, and more.
“Once we nailed down the range, we got granular with the details and provided a proposal that we could guarantee wouldn’t change,” says Popowsky.
The proposal’s total cost wound up being a bit higher than what the client’s broker suggested it might be, so the client took that into account when structuring the purchase offer. Ultimately, the sellers accepted the offer, the client purchased the apartment, and Gallery performed the renovation for the exact price quoted upfront.
“There’s no magic secret to our proposal process. We’re simply willing to invest significant time and effort into prospective clients before we even know for sure whether we’ll be hired. Any contractor worth its salt should do the same,” says Popowsky.
Interested in a change order-free renovation? Contact Gallery to set up a consultation today.
Aaron Popowsky is CEO and founder of Gallery Kitchen & Bath, an award-winning, full-service design and build firm. Gallery KBNY specializes in the interior renovation of apartments, brownstones, and town-homes in Manhattan, Brooklyn, and parts of Queens. The team strives tirelessly to couple excellent craftsmanship with matching service and communication.