Fixed-Cost vs. Cost-Plus: What Every Homeowner Should Know

Building a custom home or pool is one of life’s biggest investments—and one of the most exciting. But for many homeowners, what starts as a dream can quickly turn into stress when budgets spiral and timelines drag on. The truth is, much of that stress comes down to a simple but critical choice: the pricing model your builder uses.

In this article, we’ll break down the two main approaches—fixed-cost pricing and cost-plus pricing—and explain why the difference matters more than most people realize.

What Is Fixed-Cost Pricing in Homebuilding?

Fixed-cost pricing means the total price for your home or pool is agreed upon upfront. Once the design and scope of work are finalized, the number is locked in.

With this model, your builder assumes the responsibility of managing subcontractors, sourcing materials, and keeping everything within budget. You know the cost of your project from the beginning, which allows you to plan confidently without worrying about unexpected bills along the way.

For homeowners, especially in the luxury market, fixed-cost pricing delivers something invaluable: certainty.

What Is Cost-Plus Pricing?

Cost-plus pricing works differently. In this model, the homeowner pays for the actual cost of labor and materials, plus an additional percentage or fee for the builder.

At first, it may sound fair—after all, you’re covering the “real” costs. But here’s the problem: those costs are rarely predictable. Prices for materials can change, subcontractors can go over budget, and delays can stretch timelines. Each time that happens, the final price increases.

In other words, the more your project costs, the more your builder earns. That misalignment often leaves homeowners exposed to cost overruns and uncertainty.

Fixed-Cost vs. Cost-Plus: The Key Differences

Budget Predictability

• Fixed-Cost: You know the total cost before construction begins. (See examples in our portfolio)

• Cost-Plus: The final price can change throughout the project.

Risk & Accountability

• Fixed-Cost: The builder carries more financial risk, which incentivizes efficiency.

• Cost-Plus: The risk shifts to the homeowner, who absorbs cost increases.

Timeline Efficiency

• Fixed-Cost: The builder benefits from finishing on schedule (or ahead).

• Cost-Plus: Delays may actually increase the builder’s fee.

Transparency

Both models can be transparent, but fixed-cost naturally motivates the builder to manage details on your behalf. With cost-plus, every decision is a pass-through to the client.

Which Pricing Model Protects Homeowners?

For homeowners, especially those building luxury homes or pools, the answer is clear: fixed-cost pricing offers stronger protection.

You gain confidence in your budget, you avoid the stress of endless change orders, and you know your builder is incentivized to deliver efficiently without cutting corners.

When you’re investing in a property that’s meant to last for generations, peace of mind is just as important as the craftsmanship itself.

Why Right Angle Construction Uses Fixed-Cost Pricing

At Right Angle Construction, we’ve seen firsthand how frustrating cost overruns can be for homeowners. That’s why our founder, Brian Mauldin, developed a fixed-cost model built on craftsmanship, integrity, and efficiency.

By setting the budget upfront, we give our clients financial clarity. By carrying the risk ourselves, we ensure accountability. And by managing the process at every level, we make the experience as seamless as possible.

It’s the same philosophy Brian applies in every aspect of life: do the job with care, do it with honesty, and do it right the first time.

Final Thoughts

Choosing the right builder is about more than just design—it’s about trust. And trust starts with clarity.

Fixed-cost pricing delivers the certainty and accountability homeowners deserve. Before you begin your custom home or pool project, ask your builder which model they use—and think about what that means for your investment.

At Right Angle Construction, we’d be honored to help bring your vision to life. Contact us today to start the conversation.