Hi all,
We about to build and have found what we believe to be a good builder. He is proposing a 'cost plus contract' and his fee is 20% of the cost, is this high? As we have a couple of tradies in the family that are going to charge us next to nothing we thought there would be an advantage using this method seeing the builder said he would not charge 20% on them.
Would love any comments, thoughts

Thanks

Depends how transparent they'll be on costs.

Our builder has a stated margin in their contract, but based on the costs we're being charged for some of the upgrades, its obviously much higher than what they state.

So the higher the cost, the more he makes... where's the incentive to reduce cost? I would be going for fixed cost with rise and fall. These days commercial builds often have a fixed cost plus a share of any cost saved - for obvious reasons.

Ed

I was told only on the weekend to NEVER EVER do Cost Plus..... this is by HomeBase Expo seminar I attended. You will be forking out heaps of money....do you really want to pay for your builders coffee?

Well it seems it may not be a great idea unless the builder can give some kind of guarantee of a maximum price.

Thanks for the comments