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Why You Should Choose a Fixed-Priced Home Builder

What Is a Fixed-Price Builder

When it comes time to build your next home, there will be no shortage of decisions to make. Budget, home fixtures, and home styles are among the most common considerations when starting the building process. But in this article, I’m going to discuss something a little less common, the benefits of choosing a fixed price builder over the traditional cost-plus builder.

Let’s take a look.

A fixed priced builder is simply a builder who agrees to build your home for an agreed-upon price. In contrast, a cost-plus builder charges a set percentage, usually 15%, over the cost of building your home. So what are the reasons homeowners choose to use fixed-price contractors?

How Important Is Your Time?

Many homeowners are just way too busy to manage the amount of paperwork involved with cost-plus contractors. Weekly and often daily invoices and bills associated with hourly laborers and building materials need your constant attention.

In contrast, the fixed-priced builder shoulders the responsibility of all the administrative tasks, supervising the progress of your job, and making sure the project comes in on time at the agreed-upon price.

How can you minimize risk?

A fixed-price builder takes all of the risks when agreeing to build your house; risks like going over budget due to sloppy estimating and the rising cost of building materials are just a few things that can leave you paying more if you choose a cost-plus contractor.

For instance, over the last few months, the cost of lumber and other building materials have increased dramatically – nearly double in some cases, leaving some homeowners paying on average $16,000 more for their home, according to the National Association of Home Builders.

Is it a conflict of interest?

It’s not difficult to see the conflict of interest when you hire a cost-plus contractor that can make more money when the cost of labor and goods increase. There is a minimal incentive for cost-plus builders to finish the job on time or keep the project under budget.

In some extreme cases, builders use a low initial estimate to encourage homeowners to enter into a contract knowing that the project will be more involved and cost more money.

Learn More About Tomorrow's Homes

Regardless of what type of builder you choose, Tomorrow’s Homes wants to help make sure you have all the information you need to make an informed decision. Please contact us with any questions you may have about our process or stop by our office and speak to one of our experts.

Article By Chase Crumley
December 4, 2020