Fixed-Price vs Cost-Plus Renovation Contracts: Which Is Right for Your Metro Vancouver Home?

Sep 25

2 min read

Fixed-Price vs Cost-Plus:

A fixed-price contract sets one total price for a clearly defined scope of work, while a cost-plus contract bills the actual cost of labour and materials plus a fee or markup. Fixed-price usually suits well-defined projects such as a bathroom or kitchen, and cost-plus can suit projects with unknowns, such as older homes.

What is a fixed-price renovation contract?

The contractor quotes a total price for a written scope. If the price of materials or labour rises during the project, the contractor absorbs it, unless you change the scope. The trade-off is that the scope must be detailed up front, so drawings and material selections should be finalized before signing.

What is a cost-plus renovation contract?

You pay the actual documented costs plus an agreed fee, either a percentage or a fixed amount. You get flexibility and transparency, but the final total is less predictable, so ask for a target budget and regular cost reports.

Fixed-price vs cost-plus at a glance

	Fixed-price	Cost-plus
Final price	Set before work starts	Known only at completion
Best for	Defined scope (bathroom, kitchen)	Unclear scope, hidden conditions
Your budget risk	Lower, if scope doesn't change	Higher, unless capped or tracked
Changes	Priced through change orders	Absorbed into actual costs
Up-front planning needed	High	Lower

Which is better for a bathroom or kitchen renovation?

For most bathroom and kitchen projects with finalized selections, fixed-price gives the most certainty. The main exception is a home where walls or floors may hide problems, which is common in older houses.

What should be in writing either way?

A detailed scope of work and the material specifications
Allowances for items you haven't chosen yet, and what happens if you exceed them
How change orders are priced and approved
A payment schedule tied to completed milestones rather than large up-front payments
Who applies for permits, and the warranty terms