Cost-plus construction means you pay the actual eligible costs of building your home, plus an agreed builder’s fee. At Abbie Creek Construction, we believe this is an equitable way to build: the financial arrangement reflects the work and materials your home actually requires, with the builder’s compensation clearly identified.
For a custom home, that approach provides visibility into where your investment goes and flexibility to make thoughtful decisions about the home you want. It also requires a clear understanding that a carefully prepared budget is an estimate, rather than a fixed final price.
How the pricing works
The Cost of the Work includes eligible project expenses defined in your agreement, such as subcontractor work, materials, equipment, permits and delivery. We apply the agreed builder’s fee to those costs. Unless agreed otherwise in writing, the fee also applies to added work and owner-purchased items incorporated into the project.
For example, if your home requires 100 two-by-fours, the actual cost of those materials becomes a project expense, and the agreed fee applies. We do not add an undisclosed increase to the material price. If eligible construction costs come in below the estimate, you receive the benefit; if they come in above it, the actual costs determine the charge. With a percentage fee, the fee also changes with the costs to which it applies.
What the builder’s fee pays for
The builder’s fee compensates ACC for construction management, coordination, experience, business overhead and profit. Project-specific expenses, such as insurance, temporary facilities and debris removal, are separately budgeted and billed as the agreement provides. Review both the project costs and the fee to understand the complete investment.
A detailed budget with some firm prices
We develop your Working Construction Budget from completed plans and specifications, subcontractor and supplier quotes, material takeoffs and reasonable estimates for remaining items. The more clearly your home and selections are defined, the more useful that budget becomes.
A cost-plus project can include fixed-price subcontractor bids. When a subcontractor commits to a defined scope at an agreed price, we expect that commitment to be honored. Changes to the scope or items excluded from the bid can still affect the cost. Firm prices for individual portions of the work do not make the entire home a fixed-price project.
Why the final cost can change
Material prices, actual quantities, site conditions and labor requirements can differ from what was anticipated. Selections and additions can also change the total. An allowance is a planning amount for something not fully established when the budget is prepared; the final product and its complete installation determine the actual cost.
Even a thorough budget can miss a necessary item or underestimate its cost. Under cost-plus construction, legitimate costs of completing the agreed work remain project costs even when they were not fully captured in the estimate. An ordinary cost difference within the existing scope does not automatically require a separate change order.
A difference between an estimate and an actual cost is not the same as incorrectly performed work. We take responsibility for correcting mistakes on ACC’s part and work with responsible subcontractors or suppliers to address their work. Your agreement establishes how project costs and corrective work are handled.
How we approach your investment
Our interest is in completing your home well and preserving the relationship long after construction. We seek appropriate material pricing, pay subcontractors fairly for dependable work, and consider cost alongside workmanship, reliability, and the needs of the project.
The lowest quote is not always the best value. A well-built custom home depends on capable people and suitable materials. Our role is to help you understand those choices and spend deliberately on the quality and features that matter to you.
What cost visibility looks like
ACC generally bills monthly with itemized cost categories corresponding to the construction budget. Reasonable supporting cost documentation is available on request, and you can ask us to review a specific charge. This helps you understand actual spending and how the builder’s fee is applied. Billing and any additional reporting arrangements are established in your agreement.
Before construction, review the scope, allowances, assumptions and owner responsibilities with us. Discuss your financial comfort level and leave room for uncertainty. Make selections on time and consider the complete installed cost. Route requested scope changes through ACC for written approval before affected work proceeds when reasonably practicable. A formal change order is used when ACC, you or your lender requires one.
Deciding whether cost plus fits you
Cost-plus works best when you value cost visibility, a collaborative relationship and the ability to make informed choices as your home develops. It also requires comfort with a final price that can vary. If a fixed contractual price is essential to your decision, that is important to establish before moving forward. ACC builds custom homes on a cost-plus basis.
Planning a home with Abbie Creek Construction? Start with our project inquiry form and share your property location, design ideas, and priorities.
This page introduces our approach. Your signed agreement and incorporated project documents establish the scope, terms, responsibilities, and warranty coverage for your home.
