Custom Home Building Contracts

The 'Good old days' when construction agreements were made on a handshake
are long gone. Todays homes are bigger, more complex, and much more
expensive. The contract you use to govern the construction of your 'Dream
Home' may very well decide whether it turns into a nightmare.

At Graf Homes we are happy to work with the type of contract which best suits
your comfort level. We believe that a contract should protect both parties.
Additionally, we believe that a well written contract promotes communication
and fosters trust between Builder and client.

One popular option you may wish to pursue can be part of any type of contract.
It is called a Design-Build contract. In this type of agreement your builder also
provides in-house design to produce a package covering everything from
concept to completion. Often, you will realize considerable savings in time and
money by using both services from under one roof.

There are two main categories of prime construction contracts; "Lump Sum"
and "Time and Materials." Within these two, however, there are a myriad of
variations.

1. Lump Sum
You pay a set price for the house as negotiated and described in your
contract documents which include the actual plans, your agreement,
and any other addendums you may have. That price incorporates the
builder's profit and overhead and all costs associated with the
construction. Discounts, rebates, etc. accrue to the builder as do any
other cost savings in the project. On the other hand, the builder is
obligated to pay for cost increases. The prime advantage in this type of
contract is security. The prime disadvantage is inflexibility;
specifications must be completely detailed to obtain accurate bidding.

2. T & M (Time and Materials)
You pay the actual costs of construction plus an agreed upon fee to
the builder to manage, supervise and take responsibility for the project.
This fee is usually a percentage of the total construction cost. The
prime advantage to Cost plus contracts is flexibility. In Park City,
where Custom homes are common, owners have a good idea what
they want and like to be involved in the process.