Page 9 - Build New or Buy or Renovate Existing Home
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Not Exceed Maximum Price contracts are very similar to a Cost Plus Fee contract, but the difference
is that there is a maximum price value that GC promises not to exceed. This contract method is
primarily used under similar circumstances as the Cost Plus contract, but the owner has capped
their total upside financial exposure.

Design Build Contract

This contract is entered into with either the Architect or General Contractor and the Owner. The
Principle Lead of the Design Build contract, the Architect or GC, will then enter into agreements
with supporting Design Team members. This contracting method is used to create a collaborating
effort between the principle members supporting construction and the design of a common project.
It usually saves time and money by promoting accountability of the principles and gives the owner
greater control over the design process and budget impacts. It creates continuity, accountability
and an open, honest flow of communication between all parties.


The General Contractor will usually provide General Liability Insurance and Builders Risk
Insurance on both major remodeling projects and custom home projects. The homeowner should
be prepared to provide Property Liability Insurance throughout the construction process. It is best
to explain to your insurance agent that you will be conducting a construction project on your
property. He may suggest additional Riders or an all-encompassing Umbrella Plan for the duration
of the project.

Construction Phase

The construction phase is where you begin to see your dreams physically materialize. Although
after the lengthy home plan design, you are likely to become very anxious about completing the
project. It is best to pace yourself and work out an effective communication method and meeting
schedule with your GC. It is also a good practice to walk the project on a regular basis to view the
progress and discuss any concerns. It is worth mentioning that the GC is as motivated as you to
completing the home. The faster he completes the home, the sooner he receives his money.

A third party Inspector can be valuable during this phase. They can be a second pair of eyes on the
project and act in the interest of the Design Team when unexpected issues arise. The greatest asset
the Inspector offers the owner is the added confidence and peace of mind of having another expert
on hand. Inspectors can reduce the owner’s anxiety concerning elements of construction that they
may not understand or construction practices which cause them to be overly concerned. Of course,
this expense is another layer of assurance built into the total project cost.      


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