Home Building: Why You Need a Construction Manager

Profit on a residential construction project for a new home can often range between 15-22 percent of the total project cost and remodeling projects can be even higher.

A construction manager is paid a fee for his services, typically 10 percent of the total job cost rather than the entire sum, to deliver the finished house. Therefore, hiring a construction manager may save an owner money, allowing more of the building budget to go toward the actual project.

A contractor manager should be a licensed general contractor with appropriate building experience hired to act as the owner's agent and perform the daily supervision of everything that goes on with the construction project.

The owner and construction manager need a signed contract with the specific duties and responsibilities of both parties clearly stated, including some or all of the following:

• Assist and coordinate in the design/re-design of the project;
• Manage the permit and paperwork process (county, city, utilities, wetlands, etc.)
• Collect bids from, hire, coordinate and supervise subcontractors
• Order building materials
• Coordinate all county inspections and ensure county codes are met
• Provide assistance and direction in the mortgage process and coordinate all lender inspections

The contract should also outline the following information:

• General intent of the contract, in plain and simple language
• Payment schedule
• Extras and change orders
• Use of manager's accounts
• Project completion dates
• Insurance
• Rights to terminate contract

Since licensed subcontractors are responsible for their own workmanship, all legal warranties should apply whether a general contractor or a construction manager builds the project.