As you shop for a new home to build on your lot, you may come across builders in Houston, San Antonio or Austin who offer incremental cost breakdowns or cost-plus contracts. As a turn key, full-service custom home builder, Design Tech Homes prefers to conduct business with a fixed cost contract. So what’s the difference?
A cost-plus contract means the builder or contractor agrees to supply labor and materials for an allowance amount, plus any future variations in cost on top of that. This type of agreement leaves the price open to circumstances encountered by the builder. Smaller builders and contractors prefer this type of bidding because it relieves them of sticking to a set price. They may not be as accurate in their initial bid because any extras will be passed directly to you. Therefore, a cost-plus is the riskiest type of contract to sign. You may be handed a bill for far more than the cost of what you agreed to initially. If you sign this type of agreement, you have to hope that no unforeseen circumstances are encountered by the contractor.
The more favorable contract is one with a fixed cost. This means the contractor will supply all labor and materials for "x" amount of dollars. If the builder misses something that results in additional cost or anything it ends up costing more than projected, the builder has to absorb the cost. This puts responsibility on the builder to be thorough and it protects you from being hit with unanticipated costs as a homeowner. There'll be no complaints that you were charged thousands of dollars more because "something was missed" or simply wound up costing more than anticipated.
As a fixed-cost builder, Design Tech Homes believes this to be the logical approach for consumers as the alternative is building a home with an “open check book..” We feel it is important to provide our homeowners with the best experience possible from the time they walk through the doors of our information center to the moment they walk through the doors of their newly completed home. In our experience, less risk, less stress, and less cost leads to happier, more satisfied Homeowners.
