Budget & Costs
Updated September 2026
“Fixed price” fixes the price of the scope on paper, not of the wall nobody has opened yet. Here's what the number covers, what allowances and change orders do to it, and the clauses to read before signing.
9 min read
Written by Mike Schwartz, Built by Design | Published May 4, 2026
A contract is where a friendly conversation becomes an accountable scope. “Fixed bid” sounds like the end of the money conversation, and it's closer to the middle: the price is fixed to a scope, the scope is defined by drawings and a selections list, and everything the scope doesn't name (a choice not yet made, a condition nobody could see, a change you ask for) moves the number through a defined process. Read the exhibits, not just the cover page.
This guide is general education for homeowners in the Kansas City area, not legal advice; have a qualified attorney review anything you sign. It explains what a fixed price fixes, how it compares with cost-plus, how allowances and change orders work, the scope gaps that turn into invoices, and the short list of things to verify before signing in Kansas or Missouri.
For the conversation that comes before the contract, read the questions to ask a remodeler. For who owns the drawings and the price under each delivery model, read design-build vs general contractor.
The two common ways to price a remodel put the risk in different places. A fixed bid (also called a stipulated sum or lump sum) sets one price for the scope in the exhibits; the contractor carries the risk of their own estimate, and you carry the risk of anything outside the scope. Cost-plus bills the actual cost of labor and materials plus a fee, usually a percentage; you carry the risk of the total, and you get full visibility of where it went. A mix is common: a fixed price for the defined work and cost-plus or time-and-materials for concealed conditions. Neither is more honest than the other. A fixed bid with twelve allowances is an estimate wearing a fixed-price label. A cost-plus contract with a detailed budget and a not-to-exceed is often more predictable than that. What matters is what's defined.
| Fixed bid | Cost-plus | |
|---|---|---|
| The price is | One number for the scope in the exhibits | Actual costs plus a fee, against a budget |
| Who carries estimating risk | The contractor | The homeowner |
| What you see | The scope and the total | Every invoice and the fee |
| Changes | Written change orders, priced | Flow through the invoices; a budget update should follow |
| Works best when | The scope and selections are fully defined before signing | The scope can’t be fully defined, or you want to buy as you go |
| Watch for | Allowances and exclusions that hollow out the fixed price | No budget, no not-to-exceed, a fee on change orders |
The contract's cover page has the price. The exhibits have the project. A fixed price is only as defined as they are, so before comparing numbers, compare what each proposal attaches: the drawings (existing and proposed plans, elevations where cabinetry or tile is involved), a written scope by room that says what is demolished, what is built, and what is patched, a selections list by product (manufacturer, model, finish, quantity) with any allowances marked, an exclusions list, and a schedule framework. If a proposal has a total and "per plans and specs" and nothing else, you're not comparing the same kitchen.
An allowance is a placeholder for a choice not yet made: "tile allowance $X per square foot," "plumbing fixture allowance $Y." It lets the contract be signed before every selection is final, and it's where fixed prices come apart. Ask three things about every allowance: what it includes (material only, or tax, delivery, and installation), how an overage is billed and an underage is credited, and what happens to the schedule when the selection is late. Late selections reorder trades, not just prices: tile chosen after the shower is waterproofed idles the bathroom for a week. The cleaner approach is to make the selections before the price is final, so the contract lists the actual tile and the actual cabinets and there's nothing to allow. That's how a design-build firm with an in-house designer works, and it's why the number on those contracts tends to hold.
See also: Design-build vs general contractor: selections inside the scope
Two things change a fixed price after signing, and the contract should handle both the same way. Concealed conditions are what demolition finds: a beam smaller than the span needs, a drain running the wrong way, wiring from a previous remodel, rot behind a shower. Owner changes are what you ask for once you see the room open: a bigger window, a different island. Either way the process should be a written change order stating the cost, the schedule effect, and your approval, signed before the trade proceeds. A contingency in the budget (a set-aside for concealed conditions) means a change order doesn't wait on a financing decision. Ask how change orders are priced: at cost plus the contract's stated markup, or at a new lump sum? And ask what the contractor does when a condition is found on a Tuesday and the trade is standing there: a good answer is a phone call, a same-day written change order, and a decision from you before anyone leaves.
See also: Why remodels take longer than planned: concealed conditions and late decisions
Most surprise invoices come from things nobody put in either column. They aren't dishonest; they're unstated. Go through this list with every proposal and get each one into the scope or the exclusions in writing.
| Item | Ask |
|---|---|
| Permit and plan review fees | In the price, or billed at cost? |
| Dumpsters and debris | Included, and how many pulls? |
| Dust walls and floor protection | Included; which rooms? |
| Structural engineering | Included if a beam or a header needs sizing? |
| Design revisions | How many rounds, and what does another cost? |
| Appliances and plumbing fixtures | Supplied by whom, and who receives and inspects them? |
| Patching adjacent rooms | The ceiling below a moved drain, the floor where a wall moved |
| Painting beyond the remodeled rooms | Included where new work meets old? |
| Temporary living or kitchen | Yours, unless stated |
| Cleanup and final clean | Daily broom clean and a final clean, or one of them? |
The payment schedule should track progress: a deposit, draws at milestones (rough-in inspection passed, drywall, cabinets installed), and a final payment after the punch list. A large deposit or draws far ahead of the work is a warning. Ask for the contractor's certificate of insurance naming general liability and workers' compensation, and ask that you be listed as a certificate holder so you're notified if it lapses. Lien releases are the part most homeowners haven't heard of. In both Kansas and Missouri, a trade partner or supplier who isn't paid by the contractor can file a mechanic's lien against your home, even if you paid the contractor in full. The protection is a lien waiver or release from the contractor and, on larger draws, from the major trades and suppliers, delivered with each payment. Missouri also requires the contractor to give you a written notice about lien rights before you pay. A contractor who has done this before will have the forms ready.
The end of the contract matters as much as the start. Ask how the punch list is built (a walkthrough together, written, with dates) and what triggers final payment: usually the punch list closed, the final inspection passed, and the lien waivers delivered. Ask what the workmanship warranty covers and for how long, how it's separated from manufacturer warranties on products, and who you call in month eleven. Ask how disputes get escalated before they get personal: a meeting, then mediation, is common language.
Built by Design prices a project as one fixed number for a written scope with the selections in it. Kristen Schwartz makes the selections with you before the price is final, so the contract lists the actual cabinets, tile, counters, and fixtures rather than allowances for them. Concealed conditions and owner changes go through a written change order with the cost and the schedule effect, approved before the trade proceeds. Permits, inspections, protection, and debris are in the scope. Inspection dates are on the schedule you see. The trade partners named on every case study on this site are the ones who deliver the lien waivers. The Leawood kitchen (9 recorded weeks) and the Overland Park room addition (16 weeks, roughly 1,000 square feet) were both built on that kind of contract.
Ten minutes with this list catches most of what goes wrong later. Have an attorney review the contract itself; this is the homeowner's pass.
See also: Johnson County remodeling permits and contractor licensing
Built by Design meets homeowners at the home, writes one scope before finishes are chosen, and builds with the same trade partners named in the case studies above.
FAQAnswers, by design
The questions homeowners ask about remodeling contracts, answered in plain language. This is general education, not legal advice; have an attorney review anything you sign.
A contract that sets one price for a defined scope: the drawings, the specifications, and the selections listed in the exhibits. The contractor carries the risk of their own estimate. Anything outside that scope, such as concealed conditions, open allowances, or changes you request, moves the price through a written change order.
No. Real projects change when a wall hides something or when you see the room open and want something different. A fixed-bid contract doesn’t prevent that; it defines how a change gets priced, approved, and documented. The contracts that go wrong are the ones where that process is missing, not the ones where changes happen.
Fixed bid when the scope and the selections can be fully defined before signing, which is most kitchens, bathrooms, basements, and additions with a design-build team. Cost-plus when the scope genuinely can’t be defined, such as a historic house with unknown conditions, and then only with a detailed budget and a not-to-exceed.
A placeholder dollar amount for a selection not yet made, such as tile or plumbing fixtures. If the actual choice costs more, you pay the difference; if less, you should get the credit. Ask whether each allowance includes tax, delivery, and installation, and make the selection before the deadline on the schedule.
Concealed conditions found during demolition (undersized framing, old wiring, a drain in the wrong place, moisture damage), selections upgraded after signing, scope added once the room is open, and corrections an inspector requires. A contingency for the first kind and a written process for all of them keep change orders from becoming disputes.
In Kansas and Missouri, a trade partner or supplier the contractor doesn’t pay can file a mechanic’s lien on your home even if you paid the contractor. A lien waiver is the signed statement that they’ve been paid for the work covered by a draw. Ask for the contractor’s waiver with each payment and the major trades’ waivers on the large draws.
Keep planning with these related guides.
Design-Build Process
Fifteen questions, what a good answer sounds like, and the short brief to bring to the first meeting. Written for homeowners in Johnson County who want fewer surprises once the walls are open.
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Design-Build Process
The difference is who owns the decisions between the first sketch and the last inspection. A side-by-side table of the two models, when each one fits, what design-build doesn’t fix, and how Built by Design actually runs a project.
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Remodel Planning
Late selections, a failed inspection, a cabinet order placed after demolition, a wall that hides rot. Each one costs a predictable number of days, and most are preventable before construction starts. Here are the eight causes, ranked, with the fix for each.
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