Cost-plus contract

In a cost-plus contract, the price is not fixed up front. You pay for the real cost of labor and materials, plus the builder's markup. It gives you a view of costs, but the final total can move.

The National Association of Home Builders describes cost plus as an estimate based on time and labor, plus a percentage markup on material. Because the total can change, many owners also set an allowance for selections and track each change order. Compare it with a fixed-price contract. See the cost to build a custom home in Tampa for published figures.