Cost Plus vs Fixed Cost Building Contract

Published April 11, 2016.
Est. Reading: 1 minute

Cost Plus vs Fixed Cost Building Contract

There are two types of contracts used by Sunset Homes, Calgary infill home builder, one is a Cost Plus Contract and the other is a Fixed Cost Contract. Both have advantages and disadvantages.

In the Fixed Cost option, the price of the build is decided on before construction commences.  The client has limited flexibility to make changes once construction starts, as under this contract they are given a limited allowance on all the selections of the build. If the client does decide to add any extras over and above the allowance, a change order is required, and we all know how expensive those can be. Additionally, if the builder is able to come in under budget, the client will not see those savings.

In the Cost Plus option, all the costs incurred on labour and material are shown to the client and we, as your Calgary Home Builder, get a Builders Percentage. This is the fairest for both parties. With this type of contract, the client has the flexibility to be able to make changes to the build during construction without the need of a specific change order process, and also has the opportunity to take advantage of any cost savings we are able to make during the building process.

We at Sunset Homes, Calgary Inner-City Builder, recommend a cost plus contract where you can see all the real costs of your newly built home. If cost-effectiveness for a custom home is a priority for you, don’t hesitate on contacting Calgary’s premium inner-city builder, Sunset Homes.


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