HouseChalkCost-Plus Contract
A cost-plus contract is an agreement where the homeowner pays the actual cost of materials and labor, plus a fixed percentage or fee for the builder's overhead and profit.
Why it matters
It offers transparency because you see every receipt. However, it shifts the risk of budget overruns entirely onto you.
Where people get this wrong
A cost-plus contract requires enormous trust and a very organized builder. If the builder is inefficient or materials spike, your total cost can skyrocket with no ceiling.
Real-world example
Lumber ends up costing $10,000 more than estimated. In a cost-plus contract, you pay that extra $10,000, plus the builder's margin (e.g., 20%) on top of it.
Where this hits your build
This comes up early, before construction starts. It affects your contract, your budget, or both. Misunderstanding it can cost you money or leverage.
Most people do not just struggle with terms. They struggle with the decisions tied to them.
See how HouseChalk helps with the decisions behind terms like this