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The 'Good old days' when construction agreements were made on a handshake are long gone. Today, homes are bigger and 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 LifeStyle Builders we are happy to work with the type of contract which bests 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. |