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December 7, 2017 ashbyadmin

Which Type of Building Contract is Right for You?

When embarking on the journey of custom home construction near Georgetown, Texas, choosing the right building contract is a crucial decision that will impact the entire process. There are many decisions that must be made when you are approaching the idea of custom home construction. One of those decisions is whether you will use a cost-plus contract or a fixed-price contract. What is the difference between the two and how will it affect your custom home? Lets understand the difference between a cost-plus contract and a fixed-price contract which is essential to ensure a successful and transparent construction experience.

What is a Cost-Plus Contract?

A cost-plus contract takes into account the actual cost of constructing the home and adds a builder’s fee. With this type of contract, you will be responsible for paying the actual costs of materials and labor, along with the builder’s fee, as the project progresses. Cost-plus contracts provide flexibility, allowing adjustments to the project scope and specifications throughout the construction phase. However, it is important to note that the final cost may exceed initial expectations, making budget management more challenging.

What is a Fixed-Price Contract?

In contrast, a fixed-price contract provides a predetermined total cost for the project before construction begins. All costs are considered upfront, and the contract provides a clear scope of work and understanding of the expenses involved. This type of contract eliminates unexpected costs and ensures that your project stays within a predefined allowance. Choosing a fixed-price contract provides peace of mind, allowing you to focus on the project itself without worrying about budget surprises.

Ultimately, the choice between a cost-plus contract and a fixed-price contract depends on your preferences and priorities. It is important to have an open discussion with your builder to assess your needs, budget, and expectations before making a decision.

We at Ashby Signature Homes, specialize in Custom Home Construction in Texas and can guide you through the contract selection process. Contact our experienced team at 512-876-9008 to discuss your project and make an informed choice that suits your specific requirements.

Remember, choosing the right building contract is a critical step in ensuring a smooth and successful custom home construction journey in Georgetown, Texas. Make an informed decision and partner with professionals who prioritize your vision and budget.

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