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
(1) Short-term loan that is made in anticipation of permanent longer term loans. The interest rate on such a loan is usually higher than on longer term loans. (2) A business loan in which ...
Same as term income statement: Also called profit and loss statement. A financial statement depicting a business entity's operating performance and reports the components of net income, ...
See Board of Equalization. ...
Same as term one-hundred-percent location: Precisely the optimum location for a retail business establishment in an urban central business district (CBD). A one-hundred-percent-location ...
The definition of a testator in real estate is an individual who makes or leaves a valid will detailing how their possessions are to be divided or distributed among their heirs. The ...
Bond collaterized by real assets. Two kinds of mortgage bond are senior mortgages and junior mortgages. A mortgage bond may have a closed-end provision that prevents the firm from issuing ...
Precalculated tables providing the present values of $1 or an annuity of $1 for different time periods and at different discount rates. ...
Also called investment property. Real property held by a business for investment potential or in order to earn income by leasing or letting it, rather than for its own use. ...
Offering price. ...
Have a question or comment?
We're here to help.