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Fixed Price vs. Cost-Plus Contracts: Which One is Right for Your Renovation Project?
When embarking on a renovation project, one of the most important decisions you’ll make is the type of contract you enter into with your contractor. At Eagleview Construction, we often receive questions from clients about the difference between a fixed-price contract and a cost-plus contract. It’s an important topic, and while we openly admit our bias toward the fixed-price model, we believe in offering an honest and transparent overview so you can make the best choice for your project.
In this post, we’ll dive into the definitions of both contract types, weigh the pros and cons of each, and explain why we’ve chosen the fixed-price approach as our preferred method. By understanding the differences, you can make an informed decision that aligns with your expectations and budget.

What is a Fixed-Price Contract?
A fixed-price contract, also known as a lump-sum contract, is an agreement where the contractor commits to completing the project for a predetermined, set price. This contract type outlines the scope of work, timeline, and total cost from the beginning, and the contractor is responsible for delivering the project within these parameters. Changes in project scope or unforeseen circumstances that require adjustments are explicitly outlined in the contract.
Key Characteristics of Fixed-Price Contracts:
- Predictability: You know the total project cost upfront, making it easier to plan your budget without surprises.
- Defined Scope: The scope of work is clearly outlined and agreed upon before the project begins, leaving less room for ambiguity.
- Risk Transfer: The contractor bears the risk of cost overruns, as they are obligated to complete the project within the agreed price.
What is a Cost-Plus Contract?
- Flexibility: The project scope can be adjusted more easily, accommodating changes or unforeseen conditions as they arise.
- Transparency: Clients receive detailed breakdowns of the actual costs, providing visibility into exactly what they are paying for.
- Variable Costs: The final project cost is determined by the actual expenses, which can make budgeting less predictable.

Comparing Budget and Risk
The primary differences between fixed-price and cost-plus contracts boil down to budget and risk
- Budget: A fixed-price contract provides certainty. The price agreed upon at the beginning of the project is the price at the end, barring any significant changes. Conversely, a cost-plus contract bases billing on actual costs, which can lead to price fluctuations and budget uncertainty.
- Risk: With a fixed-price contract, the contractor assumes most of the risk, as they must manage costs to protect their profit margin. In a cost-plus contract, the risk shifts to the client, who is responsible for covering the actual expenses, even if they exceed initial estimates.
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Pros and Cons of Fixed-Price Contracts
Advantages
- Predictable Budget: Fixed-price contracts provide a clear, upfront cost, simplifying financial planning and offering peace of mind.
- Risk Transfer: The contractor assumes the risk of any cost overruns, protecting the client from unexpected expenses.
- Incentive for Efficiency: Contractors have a strong motivation to complete the project efficiently and on schedule to maintain profitability.
Disadvantages
- Higher Initial “Price”: The estimate may appear higher than Cost-Plus estimates because the contractor must account for potential risks upfront.
- More Upfront Effort: Defining the project scope requires significant time and detail during the planning phase.
- Less Flexibility: Changes or additional work requests are managed individually, which can feel rigid.
Pros and Cons of Cost-Plus Contracts
Advantages
- Flexibility: The project can easily accommodate changes, making it easier to address unforeseen issues or client requests.
- Transparency: Clients receive detailed breakdowns of the costs, providing clarity on where their money is going.
- Lower Initial Estimates: Cost-plus proposals often appear lower initially, as they are based on best-case pricing rather than a conservative, risk-adjusted figure.
Disadvantages
- Budget Uncertainty: The final cost isn’t known until the project is complete, which can lead to unexpected financial stress with cost overruns.
- Limited Incentive for Efficiency: Since the contractor is reimbursed for actual costs, there may be less motivation to control spending or complete the project quickly.
- Strained Relationships: While transparency is a pro, it can also be a con if clients feel overwhelmed by the details, start questioning the accuracy of the costs or if the contractor does provide all the information in a timely manner.
Why Eagleview Construction Chooses Fixed-Price Contracts
From the start, we at Eagleview Construction decided to operate with fixed-price contracts, and here’s why.
- Client Peace of Mind: We believe that our clients deserve cost certainty. With a fixed price, you know what you’re paying before the project begins, which makes budgeting simpler and less stressful.
- Incentive for Efficiency: We are committed to delivering on time and within budget. Fixed-price contracts put the onus on us to perform efficiently, ensuring we stay motivated to manage the project effectively from start to finish.
- Clear Expectations: Fixed pricing requires a robust planning process. By defining the scope, timeline, and budget upfront, we eliminate ambiguity and align our vision with yours. This way, everyone knows what to expect, and the project can move forward smoothly.
Which Option is Best for You?
Ultimately, the choice between fixed-price and cost-plus contracts comes down to your comfort level, risk tolerance, and project goals. Both types of contracts have their merits, and there are excellent contractors who successfully use each model. However, it’s important to understand the arrangement you are entering and to align your expectations accordingly.
If you value budget certainty, prefer a streamlined process, and appreciate a contractor who is motivated to deliver efficiently, then a fixed-price contract may be the best fit for you. If you prioritize flexibility and want the ability to make changes throughout the project without predefined limitations, a cost-plus contract could be more suitable.
Our Commitment to Transparency and Quality
At Eagleview Construction, we chose the fixed-price model because we believe it offers the best experience for our clients. It provides clarity, reduces stress, and ensures that we are held accountable for delivering on our commitments. By investing time in planning and defining the project scope from the outset, we can deliver high-quality renovations that meet our clients’ needs and exceed their expectations.
If you’re considering a renovation project and want the peace of mind that comes with a fixed-price approach, we’d love to hear from you. Contact Eagleview Construction today to discuss your vision and learn how we can help bring it to life — on time, on budget, and to the highest standards of quality.

Why Canada’s Recent Interest Rate Drop Makes Now the Ideal Time to Tap into Your Home’s Equity for Renovations
As of the recent October 2024 announcement, the Bank of Canada has lowered its benchmark interest rate to 3.75%, marking a significant shift in the financial landscape. For homeowners, this creates an ideal opportunity to reconsider how they manage their mortgage and home equity. Specifically, if you’ve been contemplating home renovations or improvements, now is the time to act. Here's why.
1. Access to Cheaper Borrowing
The primary reason this rate cut is such a game changer is simple: lower borrowing costs. When the Bank of Canada reduces its interest rates, it leads to lower interest rates across various borrowing options, including home equity lines of credit (HELOCs) and mortgage refinancing. Pulling equity from your mortgage to finance home renovations is now cheaper, allowing you to borrow more affordably than at any time in recent months.
With a reduced interest rate, the cost of borrowing drops significantly, meaning you can take out a larger loan or access more equity for your home improvement plans without facing exorbitant interest charges. For major projects—like a kitchen overhaul, adding a bathroom, or building an extension—this can make all the difference in the world.

2. Increased Equity Due to Rising Home Values
Over the past few years, the real estate market in the Ontario has experienced significant appreciation, particularly in key markets like Kitchener-Waterloo, Guelph, Cambridge and the surrounding Tri-City regions. Many homeowners are sitting on much more equity than they realize due to the rising value of their properties. This gives you the financial leverage to unlock that equity and reinvest it in your home.
Renovating while your home is worth more not only improves your quality of life but also increases your property’s market value, creating a smart long-term investment. By tapping into your home’s equity at today’s low rates, you can effectively use this equity to enhance the value of your property—setting yourself up for even greater appreciation in the future.
3. Protection Against Rising Interest Rates in the Future
While the recent drop to 3.75% feels like a financial break, it’s also worth noting that interest rates are historically unpredictable. Inflationary pressures, global economic conditions, and monetary policy changes could lead to rate hikes in the coming months or years. By locking in a home equity loan or refinancing now, you can take advantage of the current low-rate environment before rates potentially rise again.
Renovating now, while interest rates are low, ensures that you’re borrowing under the most favorable conditions. If rates were to increase in the future, you’d be paying much higher costs for the same home improvement projects. By acting now, you can lock in the benefits of lower rates and avoid potential future financial strain.

4. Boosting Home Value Before Selling
Even if you aren’t planning on staying in your home long-term, now is an ideal time to consider pulling equity for home improvements. Renovations like kitchen remodels, bathroom upgrades, or energy-efficient improvements can significantly increase your home’s resale value.
With the Tri-City regions housing market showing signs of stabilization, enhancing your home’s appeal through smart renovations can make a big difference when it comes time to sell. Buyers are more willing to pay a premium for homes that are move-in ready and updated with modern features. By investing in upgrades now while borrowing is cheaper, you’re putting yourself in a better position to get top dollar when it’s time to sell.

5. Renovating for Comfort and Sustainability
Beyond the financial reasons, home renovations are a great way to enhance your quality of life. Whether it’s modernizing outdated rooms, improving energy efficiency, or creating more space for a growing family, renovations can make your home more functional, comfortable, and suited to your needs.
With sustainability being top of mind for many Canadians, now is a perfect time to invest in energy-efficient renovations, such as better insulation, solar panels, or upgrading to energy-efficient windows. Not only do these improvements lower your energy bills, but they also add value to your home—something future buyers will likely appreciate. And with borrowing rates down, financing these upgrades has never been more affordable.

6. Flexible Financing Options
Lower interest rates typically bring about more favorable terms on home equity loans and HELOCs. This rate cut is likely to encourage lenders to offer flexible financing options, meaning you could have greater choice in how you access your home’s equity. Whether you opt for a fixed-rate or variable-rate loan, today’s low-rate environment allows for more predictability and control over your finances.
With more affordable monthly payments, you can execute home renovations without straining your budget, allowing you to prioritize your project without the stress of unmanageable costs.
Wrap Up
The Bank of Canada’s recent interest rate drop to 3.75% represents a golden opportunity for Tri-City homeowners. Whether you’re looking to enhance your living space, increase your home’s resale value, or make sustainable improvements, now is the ideal time to pull equity from your mortgage. With lower borrowing costs, more home equity to tap into, and the potential for rising rates down the road, acting now allows you to take full advantage of this financial window.
Your home is one of your most valuable assets—by investing in renovations at a time when borrowing is affordable, you can increase its value and enjoy the benefits for years to come.
Next Steps
For more information, or to discuss your home renovation plans, please reach out to us to schedule a no charge consultation, where we will walk you through all of the steps involved and create a plan with you to achieve the vision you have for your home.
Eagleview Construction
Office: 226-756-1487
Cell: 416-529-3755
Emal: chris@eagleviewconstruction.com
Web: www.eagleviewconstruction.com

Winner: 2024 Record Readers' Choice in 10 Categories!
The votes are in, and we couldn’t be more thrilled to share the fantastic news with you! Eagleview Construction has been once again recognized in the top three of the Waterloo Region Readers’ Choice awards. We are proud to announce that we have achieved the following awards:
- Diamond Awards:
- Best Home Improvement Centre / Services
- Best Home Builder
- Best Construction Company / Services
- Best Building Contractor / Consultant to Iain K
- Platinum Awards:
- Best Bathroom Design / Renovation
- Best General Contracting Services
- Best Home Renovation Company
- Best Kitchen Design / Renovations
- Best Interior Designer / Decorator to Jackie Artinian
- Gold Award:
- Best Interior Designer / Decorator to Brenna Granger
- Best Interior Designer / Decorator to Brenna Granger

A special shoutout goes to our talented designers for their individual recognition. Your creativity and passion shine through in every project, and this achievement is a testament to your hard work and dedication. We are incredibly proud to have you on our team!

At Eagleview Construction, we strive to create beautiful, functional spaces that enhance your lifestyle. Whether you’re looking to renovate your kitchen, transform your bathroom, or build an addition on your forever home, our team is here to bring your vision to life.

Thank you to everyone who voted for us and supported our mission. We are excited to continue serving the Waterloo Region and look forward to helping you with your next construction project. Stay tuned for more updates as we keep building excellence together!

Most Outstanding Kitchen
At Eagleview Construction our mission is to bring our client’s creative vision to life; this project exemplifies our mission. Prior to renovating, our client’s kitchen was small, dated and completely enclosed. It did not provide the space or functionality needed for our clients’ modern lives and growing family; they wanted an open living space that would be the heart of their home. Throughout the renovation process we worked closely with our clients to ensure their kitchen was customized for their lifestyle, right down to the interior drawer design and function. By removing the load bearing wall separating the kitchen and formal dining room, we were able to expand the footprint of the kitchen to flow into the dining and living room. For our clients, maintaining the existing character of this century home was a must, while also being able to showcase their own unique tastes.

Winner: Most Outstanding Kitchen & Bathroom at WRHBA SAM Awards
On April 12, 2019, Eagleview Construction was the recipient of both the Most Outstanding Kitchen and Most Outstanding Bathroom awards at the Waterloo Region Home Builders' Association Annual SAM Awards! We are also proud to announce that we were finalists in the Most Outstanding Renovation over $100,000 category. As such, we would like to share our winning projects with you!
Winner: 2023 Top 3 Home Builders by ThreeBestRated
In August 2023, Eagleview Construction was listed as one of the Top 3 Home Builders in Kitchener, ON by ThreeBestRated! ThreeBestRated® helps 4.5 Million customers find the best local businesses, professionals, restaurants, health care providers, etc., in key cities. They have thoroughly evaluated and updated our business based on a rigorous 50-Point Inspection. Customers use Description, Price, List of Specialties, Awards, 6 High-Resolution Photos and Video to find the best businesses.
Check out our listing & Inspection Report here: https://threebestrated.ca/home-builders-in-kitchener-on


Most Outstanding Bathroom
Our clients dreamed of an ensuite escape; a place to relax and unwind after a busy day of juggling work and family. The mission was clear—prioritize clean, bright lines, and maximize the use of the space. We worked closely with our clients to incorporate high-end, luxurious features such as: in floor heating, quartz surfaces and a relaxing rain shower. The floating white oak vanity adds depth and a modern focal point, without taking away from the crisp white and black that dominates the room. The extra long shower niche adds further visual length to the wet room. The stunning matte arctic white tile selected for the s hower wall was purposefully planned to add the illusion of height to wet room.

Winner of Record Reader Awards: Best Contractor & Best Renovator 2015 - 2021
On October 28, 2021 it was announced that Eagleview Construction was once again Diamond Winners in the Favourite General Contractor & Favourite Home Renovation categories! This year, they were also Diamond winners in 5 other categories including Kitchen Design & Renovation and Bathroom Design & Renovation.

Winner: Best of Houzz Customer Service 2015 - 2022
On February 12, 2019 it was announced that for first time every Eagleview Construction won the "Best of Houzz" award for Design! This comes after five consecutive years of winning the "Best of Houzz" award for Customer Service. This award is based on several factors, including the number and quality of client reviews a professional received throughout the year.
This is an award that we are extremely proud to win as it is a direct result of our clients' satisfaction with both our customer service and workmanship" said Iain Kent, Partner of Eagleview Construction.
This year’s Best Of Houzz awards go to an incredibly talented and service-oriented group of home remodeling and design professionals, and we’re proud to highlight the winners on the Houzz website and app,” said Liza Hausman, vice president of Industry Marketing for Houzz. “This award is particularly meaningful as it reflects the sentiment of the millions of homeowners in the Houzz community who are hiring home professionals for their projects across the U.S. and around the world.