Cost-plus Contract
Agreement in which the contract price to build something is equal to the total costs incurred plus a predetermined profit. The profit may be based on a percentage of cost (e.g., 20% of cost) or a flat profit figure (e.g., $60,000). This type of contract is not good for the buyer because the contractor may intentionally overstate the construction costs to obtain a higher profit figure when profit is determined based on a percentage of total costs. If the construction costs are $100,000 and the percentage of profit is 25%, the total contract price will be $125,000.
Popular Real Estate Terms
Through real estate properties, many individuals of varying degrees of expertise find ways to make money. The real estate industry allows these practices as real estate properties are ...
Investments, usually in limited partnership, that can protect of defer shelter) part of the income from current taxes. Under current law, passive leases can be applied up to passive income. ...
Measure of the annualized compound growth of a real estate investment. ...
You can frequently encounter “circa” in everyday discourse, referring to an approximation as an approximate date. Variations of circa are: about, near, and roughly. The ...
Rule stating that the monthly mortgage payment, property taxes, and insurance should not exceed 25% of a family's monthly gross income, or about 35% for a Federal Housing Administration ...
Apartment building in which each resident owns a percentage share of the corporation that owns the building. ...
Borrower who gives property as collateral for a loan. ...
A capitalized expenditure usually extending the useful life of a building or improving it in some manner over and above the original condition. In contrast, a maintenance or repair expense ...
Raw land in its natural condition which has in no way been improved. ...
Have a question or comment?
We're here to help.