A construction manager is another alternative to hiring a general contractor. It may be a good way for the homeowner who has no building experience to get some of the benefits of being his or her own contractor yet, at the same time, to have a pro at hand to lend confidence and guidance.
One key difference between hiring a GC and a construction manager is financial. In a traditional homeowner-GC arrangement, the contractor calculates his costs, gets estimates from subcontractors, and then marks them all up a percentage to give you a single price. In contrast, the construction manager won’t give you one price; your checks won’t all be payable to just one payee. Instead, you will hire all the contractors and there will be no middle man to mark up costs. You will pay the construction manager a fee, but that will be less than the GC’s markup would have been. You should end up ahead.
With a construction manager, you sign an agreement specifying that his (or her) fee is a percentage of the total time and materials costs. A typical fee of 10 to 15 percent would translate, on a job with a time and materials cost of $50,000, to a construction management fee of $5,000 to $7,500 for the manager’s services.
Another advantage of the construction manager is that you will retain a high degree of control and involvement in the process. The construction manager is essentially a consultant who lends a professional hand. The construction manager will help solicit bids, review estimates, coordinate schedules, and oversee construction. But you will be closely involved with every step along the way.
The basic service provided by architects usually includes some routine construction supervision, but for an added fee, many architects will assume the construction manager role. Some carpenters and small general contractors will also work on a manager/fee basis. But whoever does it, the estimating, negotiations, scheduling, and supervision are the manager’s responsibility.
What’s the downside? A general contractor assumes responsibility for a job; a construction manager does not. Disputes, poor workmanship, and other difficulties become your problem. It’s only fair, really: you save some money and assume some of the risk. But if you find an experienced construction manager with good references and negotiate a thorough and fair contract, the chances are good you won’t have major problems.
Whatever arrangement you decide upon, remember you’re the boss. Insist that the work be up to your standards.