Change Order Red Flags Homeowners Should Never Ignore
The most common red flags in scope, pricing, and markup that can lead to overpayment.
Change orders are normal in construction. Overpayment usually happens when documentation quality drops.
Scope red flags
- New work is described in one broad sentence.
- No clear tie to the base contract scope.
- "Allowance" language appears without quantity assumptions.
Pricing red flags
- Large lump sums with no labor/material split.
- Unit price increases without explanation.
- Significant rounding or "miscellaneous" buckets.
Markup red flags
- Multiple markup layers across contractor and subcontractor totals.
- OH&P applied to permit fees and other pass-through costs without explanation.
- Management fee, supervision fee, and full OH&P all stacked.
Evidence red flags
- No receipts for major materials.
- No labor-hour assumptions for labor-heavy trades.
- No schedule rationale when acceleration pricing is claimed.
What to do when you see red flags
Ask for a revised change order with line-item structure and markup logic shown on each subtotal. Keep tone neutral and decision-focused:
"I want to approve this quickly. Please break out labor, materials, and markup by line so we can align on the basis."
That request alone often resolves most pricing ambiguity.