Fixed price
You agree one price for a defined scope. The builder carries the risk of costs going up, so the number usually includes some cushion. Changes you make cost extra through change orders.
Local example: Focal Point Homes says it builds on fixed-price contracts. Sekas Homes says its contracts have no price escalation clauses.
Good for: buyers who want certainty and have made most of their decisions up front.
Cost-plus
You pay the actual cost of labor and materials plus the builder’s fee (a percentage or a fixed amount). You see the real invoices, and you keep any savings, but you also carry the risk of overruns.
Local examples: New Urban Homes uses cost-plus contracts with a fee agreed up front and shows costs at every draw. Alair Homes Falls Church uses open-book, cost-plus pricing.
Good for: buyers who want transparency and flexibility to make choices as the house goes up.
Guaranteed maximum price (GMP)
A hybrid: the builder works on a cost basis but caps the total. Ask who keeps savings if the job comes in under the cap.
Local example: AZA Builders prices under a guaranteed-maximum contract.
Questions to ask whichever model you choose
- What is included in the scope, and what are allowances?
- How are change orders priced and approved?
- How are material price increases handled after signing?
- How often will I see a budget update?
