Cost plus VS Fixed Price Contracting
A lot of people are confused between the difference of cost plus and Fixed price contracting. In this video I go through the pros and cons, Also I recommend what’s better for you.
Hi my name is Daniel Simone and today I am here talk to you about the difference between Cost Plus and Fixed Price contracting. The main difference between cost plus and fixed price is the budget. Cost plus contract have no set spending limits. The builder will purchase the materials and the labour, and will be reimbursed, plus a fee. Fixed Price sets a specific dollar amount for the project. So, what’s best for you? Let’s see.
If you are on a budget, and need to know everything upfront on what you are getting for what price, then fixed price contract would be the way to go. When using fixed price, this will help the job move a lot quicker as everything would have been picked before construction even starts.
Now on Cost Plus on the other hand you may be able to get a guaranteed maximum cost. As these type of contract[s] are generally used for custom homes, it will come down to what you as the owner to decide to what to have in your home. Where the price can get a bit out of control, things like internal finishes. If they are not picked before when sticking to a budget, to your surprise they can very easily start creeping up in price.
My advise would be when you can, get a fixed price. Great! I hope that was helpful! If you know anyone that would find these helpful please like and share and then in the comments below. I would love to hear your thoughts on this topic. Thanks for watching bye for now.