CONTRACTS!!!!!

When building a custom home, one of the most critical decisions homeowners face is selecting the right contract structure. At Ozark Crafted Homes, we utilize both Cost-Plus Contracts and Guaranteed Maximum Price (GMP) Contracts depending on the project’s specific needs. Each method has distinct advantages, and understanding their differences can help homeowners make informed decisions about their build.

What is a Cost-Plus Contract?

A Cost-Plus Contract is a flexible agreement where the homeowner pays for the actual cost of construction plus a predetermined percentage or fixed fee to the builder for their management services. This type of contract is often used in projects where the full scope is not completely defined at the outset, allowing for flexibility as the design evolves.

Benefits of a Cost-Plus Contract:

• Greater transparency in pricing and material costs
• Flexibility to make changes during the project
• Suitable for complex or custom builds where final costs may be difficult to predict upfront

Considerations:

• Costs may fluctuate, making final expenses less predictable
• Requires a high level of trust and collaboration between homeowner and builder
• Requires detailed tracking and documentation of expenses

What is a GMP Contract?

A Guaranteed Maximum Price (GMP) Contract is an agreement where the builder sets a maximum cost for the project, including materials, labor, and contractor fees. If the actual costs exceed the agreed-upon GMP, the builder is responsible for covering the difference unless specific adjustments are outlined in the contract.

Benefits of a GMP Contract:

• Provides cost certainty and budget control
• Reduces financial risk for homeowners
• Encourages efficiency and cost-saving measures from the builder

Considerations:

• Less flexibility for changes once the contract is established
• The builder may include contingencies in the estimate to account for potential overruns
• Requires a well-defined project scope before signing the agreement

Which Contract is Right for Your Project?

At Ozark Crafted Homes, we are well-versed in both Cost-Plus and GMP contracts and choose the best approach based on each project’s unique circumstances.

• If a client wants the freedom to adjust designs, material choices, or project scope as construction progresses, a Cost-Plus Contract may be the best fit.
• If a client prefers a firm budget and cost predictability, a GMP Contract may be the ideal option.

Our goal is to create a transparent and stress-free building experience for our clients, ensuring that the chosen contract structure aligns with their priorities and vision. Whether you're looking for flexibility or cost certainty, we tailor our approach to best suit your project.

Have questions about which contract type is right for your custom home? Contact Ozark Crafted Homes today, and let’s discuss the best path forward for your dream home!