When deciding to build a new home, there are a lot of things to consider, including the pricing strategy you want to proceed with. Most home builders will offer clients the option between a fixed price and cost plus contract. Deciding which one is right for you can add to the stress of home building, so at Gibson Contracting our team works with every client to assist them with this decision so that it becomes one more flawless step in the construction of your new home.
Fixed Price Contract
For clients that have a set budget and can prioritize their home options, a fixed price contract is the best option. With that being said, all things aren't equal when choosing a contractor. At Gibson, we don't compromise the integrity of a home to present a lower bid than competitors. We present our fixed price contracts with the Gibson standard of using superior materials and installation methods.
The most significant advantage of a fixed price model is that it allows the homeowner to know in advance what the house will cost. You will be aware of the total cost before the project even begins and not have to worry about market price fluctuations.
The main disadvantage of the fixed price model is that it typically requires clients to prioritize their home desires and possibly make concessions to keep within their set budget.
Cost Plus Contract
Cost plus contracts, are often used for extremely custom homes with a lot of upgrades and unknowns. With a cost plus contract, Gibson doesn't simply give a rough estimate of what we think it will cost to build your house; we pride ourselves on creating a realistic budget that would fluctuate based on changes by the client or market.
The most significant advantage of a cost-plus model is that it makes building your home a very open process where the you review all bills associated with the construction of your home. This would include invoices for materials and subcontractors.
The main disadvantage, is also an advantage of the cost plus model. Should market pricing increase for any construction material, the client would be responsible for paying the increase. However, with that being said, the client will also receive any cost savings if the price decreases.
Still unsure of which contract would work best for the construction of your new home? Contact us at 250-469-9704 or firstname.lastname@example.org and we will be happy to answer any questions.
Based in Kelowna, BC, Gibson Contracting is an award-winning custom home construction and renovation company that works closely with discerning clients to deliver exceptional results. If you're planning to build your new home in Kelowna, Lake Country, Vernon, West Kelowna, or anywhere else in the Okanagan, make sure to contact Gibson Contracting.
PO Box 22106 Capri Centre