A fixed-price renovation (precio cerrado) gives you certainty on the quoted scope, with changes and provisional lines handled separately. A cost-plus arrangement (por administración) means paying actual labour and materials plus an agreed margin; it is flexible but leaves the final total open. Fixed price suits well-defined jobs; cost-plus can suit work where the scope cannot be known in advance. In both, clear records, written approvals and invoices are essential.
How does a fixed-price contract work?
In a fixed-price or closed-price contract, the builder commits to carrying out the work described in the quote for the quoted amount. The itemised quote defines the scope; anything outside it is a change, priced and approved separately. Lines that could not be measured in advance are usually included as provisional, with the basis on which they will be settled.
For you, the advantage is certainty: you know what the defined work will cost. For the builder, the risk of underestimating the work on those lines is theirs. That is why a fixed price is only realistic when the scope is clear, the finishes are chosen and the main hidden conditions have been checked. See our itemised quote page for how the scope is written.
How does cost-plus (por administración) work?
Under a cost-plus arrangement, you pay the real cost of labour (often by hours or days of each trade) and materials (against supplier invoices), plus a margin or fee agreed in advance for the builder’s coordination and overheads. There is no closed total; there may be an estimate.
The advantage is flexibility. You can change your mind as the work progresses, and you pay only for what is actually done. The risk is that the final total depends on how efficiently the work is carried out and on decisions made along the way. Without good records, it is hard to know whether what you are paying reflects the work.
When does each model make sense?
Fixed price suits most residential renovations: a bathroom, a kitchen, a full flat with a defined scope. It suits owners who need budget certainty and who are not on site to follow every decision.
Cost-plus can suit work where the scope cannot be defined in advance — for example, repairing an old village house where each opened wall changes the plan — or very small, open-ended jobs. It suits owners who are closely involved and comfortable with an open total.
A hybrid is common: a fixed price for the defined work, with clearly labelled provisional lines or a cost-plus element for the uncertain part. Our guide on unexpected costs explains how provisional lines work in practice.
What protects you under each model?
- Fixed price: a complete itemised quote, explicit exclusions, a written change procedure, payments linked to stages.
- Cost-plus: agreed rates for each trade, an agreed margin, supplier invoices for materials, regular statements of hours and materials, and an estimate with a review point when it is approached.
- Both: invoices for every payment with VAT shown, a contractor with a guarantee and public liability insurance, and written approvals for changes.
See the payment schedule guide for how payments are linked to progress.
How do we work?
We normally quote at a fixed price based on an itemised quote, with provisional lines where something cannot be confirmed before strip-out. Changes and confirmed provisional lines are quoted and approved in writing before they are carried out. That model suits most of the flats, houses and commercial units we quote.
If your project has a large uncertain element, we discuss on the visit how to handle it, so that the defined part has a firm price and the uncertain part is clearly separated. For commercial projects with a tight opening date, see shop fit-out cost; for external work where diagnosis matters, see façade and roof cost.
Which questions should you ask before signing?
Whatever the model, ask: what exactly is included, and what is excluded? How are changes priced and approved? How and when are payments made? What happens if a provisional line turns out larger or smaller? What records will I receive? A builder who answers these clearly is more important than the choice of model itself.
It is also worth asking how the builder will keep you informed of the running total. Under a fixed price, that means a clear list of approved changes added to the original quote. Under cost-plus, it means regular statements that you can check against invoices. Either way, you should never have to wait until the end to find out where the total stands.
Bauman Raymond Attila · Presupuesto Reforma · Avenida Antonio Belón 3, Marbella. Last reviewed: 05/11/2026.
