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How Change Orders Work in Custom Home Construction
Change orders add up to 8–14% of total contract value on a typical custom home build. On a $600,000 project, that’s $48,000–$84,000 in adjustments you didn’t originally budget for. Most of them are predictable — and the ones that aren’t are handled very differently depending on your contractor.
Understanding how change orders are supposed to work — and what your rights are under Oregon law — is one of the most useful things you can do before construction starts.
What a Change Order Actually Is
A change order is a formal, written amendment to your construction contract. It documents a change to the agreed scope of work, adjusts the contract price accordingly, and may extend the project timeline.
Change orders fall into three categories:
- Additive change orders increase the contract price
- Deductive change orders decrease the contract price
- No-cost change orders swap one item for another of equal value
Every change order, regardless of type, should be documented before the work begins.
Oregon Law on Construction Changes
Oregon has specific requirements around contract modifications that most homeowners don’t know about until a dispute arises.
Under ORS 701.305, any change to a residential construction contract that increases the price by $2,000 or more must be in writing before the work is performed. Extra work authorized verbally is not legally enforceable under Oregon law. The Oregon CCB (Construction Contractors Board) enforces this requirement and handles disputes when it’s violated.
In practice, good contractors document change orders below that threshold as well. Written documentation protects both parties regardless of the dollar amount.
What Should Be in a Change Order
A properly written change order includes:
Description of the change
specific enough that both parties understand exactly what work is changing
Impact on contract price
the dollar amount, broken down by labor and materials if available
Impact on timeline
how many days the change adds or removes from the schedule
Signatures
contractor and owner, dated before work begins
Vague language is a red flag. “Additional electrical work per discussion” is not a change order. “Add two 20-amp circuits to the primary bedroom per plan revision dated [date]” is.
What Triggers Change Orders (and How to Reduce Them)
Change orders come from two sources: owner decisions and field conditions.
Owner decisions are the more controllable category. Mid-project design changes, material upgrades, and scope additions all generate change orders. The way to reduce these is to spend more time on design and scope definition before construction starts. A design revision costs $500–$2,000. The same revision executed during framing costs $5,000–$20,000.
Field conditions are less controllable but not entirely unpredictable. Oregon’s wet winters and the clay soils in the Willamette Valley mean that drainage, waterproofing, and foundation conditions are areas where unexpected findings are more common than in drier climates. Flagging these during planning is far cheaper than addressing them mid-pour.
How to Handle a Change Order You Weren’t Expecting
Before signing an unexpected change order:
- Ask for a written description of the field condition that triggered it
- Ask for photos or drawings if applicable
- Confirm whether the change affects the timeline and by how much
- Compare the price to independent estimates if the amount is significant
Pressure to approve on the spot before work is stopped is a warning sign.
What Transparent Change Order Handling Looks Like
Integra Built has handled change orders the same way since 2010: every change is discussed, documented, and approved in writing before it affects the job site. Our clients know the price before work begins, not after. Oregon CCB #234-156. Questions about how we handle scope and contract changes?
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