You wouldn’t buy something without knowing the price — right? That’s why most products, including typical new homes, are sold at an exact fixed price (FP). With FP homes, the builder has already determined their costs and has a strong incentive to control them.
But custom homes and remodeling projects are a different story. Builders can’t predict every resource and material cost upfront, so they often use a Cost‑Plus‑Fee (CPF) contract. Under this structure, the builder provides an estimate and agrees to a lower profit percentage. In return, you—the owner—agree to pay for all actual project costs, no matter how high they climb.
Florida’s Inverted Market: A Perfect Storm for Overruns
In a typical market, CPF deals can work. But Florida is not a typical market. It’s “inverted”: there’s more construction work than available labor and materials; material costs are rising; labor shortages persist—and then came Hurricane Ian. These forces weaken the competitive dynamics that usually help control costs. Even fixed‑price jobs are vulnerable to overruns. But with CPF, the risk shifts entirely to you. You’re now exposed to all cost escalations and delays in a market designed to exploit those vulnerabilities.
That’s the injury. The insult? You’ve left the fox to guard the henhouse—a builder who isn’t contractually obligated to control costs and who actually earns more as your project gets more expensive.
Why Builders Act Like Foxes (Even the Good Ones)
The fox doesn’t raid the henhouse out of malice—he does it because it’s the easiest way to get hens. Similarly, most builders aren’t trying to take advantage of owners. But when faced with supply‑chain issues, labor shortages, and scheduling chaos, cutting into your budget and timeline can become their path of least resistance.
Even if you like and trust your builder, assurance is not insurance. A builder will always, ultimately, prioritize their own interests. So who’s really in your corner?
The Owner’s Representative Advantage
That’s where Owner’s Representatives come in. They work with your team—but solely for you. An Owner’s Rep ensures that cost, schedule, and quality stay on track.
With 25+ years of local experience, Naples Custom Home Cost Consulting (NCHCC) offers project management and Owner’s Rep services designed for Southwest Florida’s unique market. We keep builders accountable without undermining their work and look for opportunities to create equity by adding value to your home.
Bottom Line: Don’t Leave Your Investment Unprotected
With CPF contracts, you’re buying something without knowing the final cost. Ask yourself:
• Are you truly on budget and on schedule?
• Is your project being managed as well as it could be?
• Are you protected from unnecessary delays and overruns?
The honest answer: probably not.
Protect your investment. Gain peace of mind. Let Naples Custom Home Cost Consulting do the “knowing” for you.
