Perhaps the most important part of your remodeling job is the contract. It will outline expectations for both you and your contractor, and of course, the contract states a price on the work to be completed. But you might be surrpised to learn that there are actually two very different ways of writing contracts for construction jobs: Lump sum contracts and cost-plus contracts. You need to understand the difference, so that you can avoid any surprises – especially with regard to the final price!
Lump sum contracts are essentially what they sound like. In exchange for a stated lump sum of money, your remodeling job will be performed as described in the contract. These types of contracts are popular with homeowners, because you can be certain of the final price of the work (assuming no unforeseen complications occur). If you need to stay within a certain budget, a lump sum contract is usually the way to go.
Of course, there can be down sides of a lump sum contract. It will become difficult to change the scope of the project once it is underway, at least not without adding expenses to the final bill. And some homeowners prefer to have more control over all of the fine details of the work, such as the price of materials.
A cost-plus contract states that the remodeling job will be completed for the cost of materials plus a fee or markup (often stated as a percentage) to the contractor. These types of contracts allow you to be more fluid with design decisions throughout the course of the project (assuming you accept the cost of additional materials). However, the final cost can sometimes vary wildly with these types of contracts, because bids from subcontractors and prices of materials can often fluctuate unpredictably. This is especially worth mentioning right now, as supply clain shortages have wreaked havoc with the cost of many materials!
Give us a call to discuss your remodeling project, and we can offer you a clear and detailed quote on the work. As always, we are happy to answer any questions you might have about home construction.