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Fixed-Price vs Cost-Plus Contracts: What You Must Know

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Not all contracts are created equal. When building a new home, one of the biggest—and most financially impactful—decisions you’ll make is choosing between a fixed-price or cost-plus contract. The structure of your agreement directly affects your budget, stress levels, and your ability to plan for the future.

Fixed-price contracts, like those offered by Raulston Family Homes, are exactly what they sound like: a total cost is agreed upon before construction begins. Everything from site works and materials to inclusions and labour is clearly detailed in your contract. This means that unless you make changes, the price stays the same—no surprises halfway through the build.

This contract type is ideal for first-time home builders, investors, and families who want to manage risk and avoid financial blowouts. You’ll know what’s included upfront—no vague allowances or grey areas. Raulston’s Inclusions Book is a great example of how we make every detail transparent, right down to the tapware and tiles.

Cost-plus contracts, by contrast, involve the builder charging the actual cost of materials and labour, plus an agreed-upon margin (typically a percentage). While this approach offers some flexibility—particularly on architecturally complex builds—it carries significantly more risk for the homeowner. If the price of timber, steel, or labour increases during construction, you pay the difference. The builder is protected—but your budget is not.

Cost-plus contracts are better suited to clients with experience managing budgets or builds, and even then, they require close monitoring. Without strict boundaries and experienced oversight, costs can escalate quickly and unexpectedly.

At Raulston Family Homes, we believe your peace of mind should be part of the package. That’s why we offer fully transparent, fixed-price contracts with no hidden fees and no inflated post-contract costs.

Start with our Plans Book
See exactly what’s included upfront
Download the 7 Things You Must Know Before Building Checklist

When it comes to building your home, clarity beats guesswork every time. Choose certainty. Choose Raulston.

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Troy Raulston

Troy is a dedicated builder and business owner whose journey began in his school’s woodworking room, where he honed his craft during every lunch hour. What started as a passion for creating timber furniture grew into a lifelong career, fueled by his profound skill and vision. Now, Troy is shaping his future by building not only furniture but a thriving business.

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