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Real Estate Glossary

Cost Plus Contract

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Written by Luis Escobar

In this contract, the contractor is reimbursed for all costs related to construction on top of a prearranged percentage of costs covering the contractor’s profit and overhead. This is the kind of contract utilized when the scope of work is vague. However, it would require additional owner supervision as the contractor is less incentivized to exercise cost control.

In this contract, the contractor is reimbursed for all costs related to construction on top of a prearranged percentage of costs covering the contractor’s profit and overhead. This is the kind of contract utilized when the scope of work is vague. However, it would require additional owner supervision as the contractor is less incentivized to exercise cost control.

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Luis Escobar

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