Is a Cost-Plus or Fixed-Price Building Contract Better?

When you are getting your home built by a Custom Home Builder in Salt Lake City, you want to be sure that you are hiring the best like Harvest Homes. This ensures that your home will be built just the way you want it and the project will move forth in a seamless manner. Even if you are dealing with a very reliable builder, it’s still important that you be closely involved in the project from start to finish.

The Payment Terms

In addition to all the other things that you have to pay attention to, you will also have to understand how the payment terms work and you can choose between a fixed price or a cost plus contract. In the latter, the actual cost of building your home will be taken into account and there will be a fee added as the Custom Home Builder in Salt Lake City’s overhead and management. This particular fee could either be a flat fee / a percentage of the total costs.

The Accurate Cost Estimate

It’s true that neither you nor the builder will know what the exact bottom line of the building costs until the house has been built and the accounting costs are completed soon after closing.  A credible Custom Home Builder in Salt Lake City will always give you a very accurate cost estimate. They are able do this on account of the experience and expertise they have in the field.  However, it’s important to understand that it’s an estimate till the point the final accounting is done.

About a Cost Plus Contract

In a cost plus contract, you will pay actual costs for all material and labor plus the fee of the Custom Home Builder. This type of contract is suitable when larger custom homes are being built and homeowners know what their actual costs are, on an ongoing basis. It provides the chance of identifying problems & finding solutions that benefit the homeowner. The final cost will be dependent on the actual choices you make.

Opt For the Best

Both cost-plus and fixed-price contracts are very successfully used in custom home building and you can decide the one that works best for you. The important thing is that you deal with a credible builder, who will handle the project responsibly, honestly and maintain good communication and transparency at all times. For a reputed and dependable Custom Home Builder in Salt Lake City, call Harvest Homes on (801) 301-9137. Alternatively, contact us via email.