Cost Plus Construction Pricing

Cost plus construction pricing  is generally the least expensive way to build a new home.  In cost-plus construction, we build a home for actual builder cost plus a percentage as our management fee. This is basically an “open book” process where the customer has access to every piece of information we have in terms of estimates, costs, invoices, etc…

The customer will see every invoice, every projection,  and every cost that is used to build their house without any mark up for the builder.  The customer gets “contractor” pricing.  Then, Panterra Homes charges a fee for overhead and profit.

Cost-plus is not for every project and it is not for every customer.  We would like to speak with you in further detail concerning this approach.  In addition, we can refer you to past cost-plus customers so you can see how well it worked for them.

Sometimes called a cost reimbursement contract, the cost-plus contract is a legal agreement that allows a contractor to be paid in full for all expenses allowed by the terms of the contract, up to a set limit that is defined in the terms and conditions. In addition, the contractor may also receive additional compensation that will ensure that a profit is made on the job. There are several variations on this type of contract in common use today.

The provisions of the cost-plus contract are different from those associated with the fixed-price contract. With the latter, the contractor commits to only charging a specific amount for the job covered by the terms and conditions outlined in the agreement. Should the actual expenses exceed the costs associated with fulfilling the obligation made in the agreement, the contractor cannot pass those costs on to the client. Instead, the contractor must absorb those costs, which may result in a net loss on the project.