Understanding Cost-Plus Construction Pricing: Is It Right for You?
Most Builders Don't Want You to Understand Pricing
There's a reason most builders give you a single number without breaking it down. The less you know, the more they can mark up.
Traditional Fixed-Bid Pricing
How it works: Builder gives you one price for the whole project.
The hidden truth: That price includes 20-40% markup on materials and labor. You'll never know the actual costs.
The risk: Builders are incentivized to cut corners or hit you with change orders to protect their profit margin.
Cost-Plus Pricing Explained
How it works: You pay actual costs (materials + labor) plus a fixed percentage fee.
At Plymouth Builders, we use cost-plus-15%. You see every invoice. Every lumber delivery, every subcontractor bill, every light fixture. Our 15% covers overhead, project management, and profit.
Real Example
$500K Home Comparison:
Traditional Builder:
Quote: $625,000 (includes hidden 25% markup)
You never see actual costs
Plymouth Builders Cost-Plus:
Actual costs: $500,000
Our 15% fee: $75,000
Total: $575,000
You see every dollar
Your savings: $50,000
Pros of Cost-Plus
See where every dollar goes
No incentive for us to cut corners
Fair pricing on changes
Aligned incentives (your success = our success)
Cons of Cost-Plus
Less cost certainty upfront
Requires trust in your builder
You bear cost overrun risk (though rare with good estimates)
When Cost-Plus Makes Sense
Custom homes with many decisions
Projects with potential unknowns
Clients who value transparency
Experience transparent pricing. Contact Plymouth Builders for a free consultation.
