Common Cents Remodeling; Fixed price contract ? Is it meeting your complete project needs

Unlike Monopoly, pricing a remodeling project in Frederick, Maryland is no game it’s serious business  It is imperative that project participants know the factors to consider in choosing between these pricing approaches and to understand the advantages and disadvantages to each.  Firm price, cost-plus and time -material contracts for construction projects offer different protections and incentives for both owners and contractors.

As we have discussed in past blogs,  pricing a remodel is difficult to master part art, part science. An economic depression can throw more than a wrench into the works. The current economic condition has forced great strains on the construction market. Every project and every industry participant has felt the impact. In this environment, it is critical for home owners and contractors to understand how the adverse economic climate may impact the legal rights and duties that apply to a construction project.

There is a on going debate surrounding the relative qualities of time and materials billing vs. fixed-price contracts. In most respects, I think it's no contest, fixed pricing wins hands down for lots of reasons. It holds the potential for known margins for the contractor. It provides a strong incentive to clients and remodelers alike to buy right. Make sure to review the scope of the project in detail.

You should consider,  time and material contracts tend to be to open ended with very little protection for the consumer. In most cases, It gives the project management issues to the consumer, that would defeat the purpose of a contractor to mentor your project.

Last but not least,  the cost-plus contract is a option for contractors that have more  time at the desk than in the field . This type of contracting is time-consuming to administrate, but allows for 100% on job costing. At the very least, a cost-plus contract forces you to look at actual costs, invoice by invoice, while the  job is still under way. Every time there is a statement for a payment, you have an opportunity to compare actual progress with both your budget and your schedule. Usually, due to the office time and additional management time the overhead cost to the contractor gets passed to consumer at a much higher rate. Plus you still have a unpredictable final project price.

It is safe to say the fixed price contract offers max protection for the contractor and consumer. Discuss these options with your local contractor or give me a call I would love to discuss these with you.

Key Tip: As I mentioned in the past blog “ Common Cents Remodeling: Is this guy for real or a problem waiting to happening  )selecting your contractor is paramount to the success of your project. Trust in your remodeling professional.

Jim W.

(240) 315 5785

Frederick, Maryland