'Cost plus 12' on a builder contract, twelve percent of what

@juniper yes, that's the core of it. Fixed price puts the overrun risk on him, cost plus puts it on you. Which is why the definition of "cost" is the whole contract. I'd want a written schedule of what lands in cost and what lands in fee, line by line, including supervision, dumpsters, portable toilet, temporary power, and his truck.

The business card part would stop me cold, honestly. Not because 12 is wrong, because there's no document.

Three things you actually need before the 19 days run out, and none of them require you to trust this guy.

First, a real scope. A plan set and a finish specification. Cost plus with vague finishes is how you get quartz priced as granite and then an invoice for quartz. Write down cabinet grade, window brand, flooring, roof material, HVAC tonnage. Without that no builder can bid and no builder can be held to anything.

Second, the definition of cost. Get it in writing that general conditions items are named individually and assigned to either the cost pile or the fee. In my experience the fight is never about the percentage, it's about supervision and warranty labor.

Third, an estimate of total, even if it's a range. "We'll know when we know" is a real thing builders say in a market where material prices move, and lumber and steel have been genuinely unpredictable. It is also unfinanceable. Your construction lender is going to require a fixed budget with line items to set the draw schedule, so the bank will force this conversation whether or not you do.

On the lot: 62k against 385 to 410 comps sounds workable at first glance, but you cannot know until somebody prices the house. If you can't get a number in 19 days, ask the seller for an extension and offer to pay for it. Vacant land sellers often take that. Losing 500 on an extension is cheaper than committing to a build you cannot price.

@thicket the point about the lender forcing the budget is what got me. I assumed the bank would just lend against the appraisal. They want the line items?

@ember they want the line items because they release money in draws against completed work. No line items, no way to verify a draw. Every construction lender I've reviewed documents for wanted a schedule of values before closing, but terms vary and you should get yours in writing from your own lender rather than assuming mine applies.

Ask him for three references where he did cost plus and ask those people what the final number was versus the first estimate. That single call has told me more than any contract review.

I'd push back a little on the pile-on. Cost plus with a builder you trust is normal on custom work. The problem here isn't the structure, it's that @rigging doesn't know this person yet and there's no scope. Fixed price from a stranger with no scope is just as bad, he'll pad it 20 percent and you'll never see where.

The lot is the part I'd slow down on. 62k, and what did you confirm about it? Perc test or sewer availability, water, power distance, whether the setbacks let you actually fit 1,900 square feet single story on the buildable area. I have watched people spend a year on a lot that could hold a house half the size they drew. That's a survey and a zoning call, both cheap, both doable inside 19 days.

@orchard sewer is in the street, that much I checked. Setbacks I have not looked at. Adding that today.

@orchard that's the one I'd have missed entirely. Filing it.

Running your numbers rough: lot 62, say build at 165 a foot on 1,900 gets you 313, so 375 plus soft costs, closing, and carry. Against 385 to 410 that's very thin. At 145 a foot it's a different deal. So the only number that matters right now is the per foot, and you don't have it. Everything else is decoration until you do.

@tally that's the right frame. And I'd add carry. Twelve months at whatever the construction rate is on 300k of draws is not a rounding error, and interest on a spec build gets paid out of your margin, not out of nothing.

Extend the lot, price the plan with two other builders, and don't sign anything written on a card. Nineteen days is enough for the extension conversation and one real bid if you start today.