What is the difference between cost plus and fixed price new home contracts?
There are two basic ways to price a home. One is cost plus. The alternative is fixed price. Cost Plus With this scenario the builder tracks the actual cost and then adds his markup (typically 15% to 20%). Cost plus contracts are easier for builders because there is no estimating to do nor is there any incentive to save the home buyer any money with competitive shopping. Although there is no incentive for a builder to save money with cost plus, please be assured Willis Sinclair Homes will do everything possible to build you the best possible home for the best possible price no matter how we bid it. We give competitive bids just like our fixed price homes and pass the savings on to our customers. Fixed Price A fixed price contract is basically a contract that states the builder will build your home for a pre-agreed upon price. It provides allowances for items that might vary such as appliances, carpets, cabinets, et cetera. If you go over or under on your allowances, the fixed price is a
