What is a Typical Construction Management Fee?

26 June 2020 | Construction

If you want some construction done at your house or professional workplace, then you’ll need to decide between hiring a general contractor or perhaps a construction manager. Both construction managers and general contractors are open to offers, providing their services, hire construction workers to finish a job, and wish to satisfy a client as best as they possibly can. However, a construction manager, unlike a general contractor, charges only one set fee for their services throughout the whole project.

In a typical homeowner-general contractor agreement, the contractor first calculates their estimate, acquires estimates from subcontractors, and has them marked up a percentage to give clients a single-price. On the other hand, construction managers don’t give clients a single-price; their checks won’t just go through one payee. Instead, clients will hire every contractor without any middlemen to mark up costs. Of course, there is a fee with a construction manager, but it will be less than a general contractor’s markup.

We’ll go in the greater details about what a construction manager is and what typical construction management fees usually are.

What‌ ‌Is‌ ‌A‌ ‌Construction‌ ‌Manager‌ ‌And‌ ‌What‌ ‌Do‌ ‌They‌ ‌Do?‌

A construction manager serves as the representative of a construction company. They’re the ones that clients get in touch with whenever they have questions regarding a project. The aim of a construction manager is to ensure that whatever project they’re assigned with is finished on time, is safe, and also meets the desired expectations and standards of the client.

The construction manager monitors every aspect of the project. But rather than residential projects, they’re usually required for commercial ones. However, that’s not always true.

What‌ ‌Is‌ ‌A‌ ‌Construction‌ ‌Manager‌ ‌And‌ ‌What‌ ‌Do‌ ‌They‌ ‌Do

Construction managers have the following responsibilities:

  • Hiring managers
  • Going over blueprints
  • Ensuring workers are paid accordingly
  • Report to supervisor and client
  • Ensuring the quality of the work performed is as the client wants

Construction managers monitor a project’s cost apart from ensuring its completed on time and abides by the client’s desired standards. If the manager finds that any aspect of the construction process is being held back due to some sort of delay, it’s their responsibility to find out what the problem is and resolve it immediately. Sometimes, construction managers work alongside other professionals like an architect or project manager.

Check this link to learn more about construction management best practices.

Construction‌ ‌Management‌ ‌Fees‌

The cost of hiring a construction manager is an average of $21,463 or somewhere between $3,236 and $43,162. The fee makes up between 5 to 15% of the entire project, although the percentage shrinks for bigger projects.

Fixing construction issues for a household or other type of building can make it more comfortable and efficient for the client as well as increase its value.

Standard Fee‌ ‌Percentage‌

The standard construction management fees range from 5 to 15% of the entire project. However, the costs can also come to clients in the form of a fixed amount or based on a project’s size. The cost can even vary with the kind of services that a construction manager provides. Nevertheless, the clients must pay only when a specific portion of the project has been completed. Clients need to structure the payments to ensure everything is paid in full once construction has completed.

Residential Construction Consultant‌ ‌Fees‌

When it comes to residential construction consultant fees, clients will need to pay a percentage of the construction process – typically less than 5% for each consult – or a flat fee for services of residential consultation.

For residential construction, clients will have to consult with a number of professionals before starting the project. Some of these professionals include structural‌ ‌engineers, construction managers, landscape architects, designers, and architects.

Residential Construction Consultant‌ ‌Fees‌

Note: Clients will need to pay attention to the cost of labor and materials when reviewing their contractor estimate. If construction managers mark up those factors, it could affect the overall percentage the clients are paying for their services. Some markups could even take a manager’s rate from 5 to 15%.

A Client’s Level‌ ‌of‌ ‌Involvement‌

Construction managers undertake the burden of overseeing the process of construction on their own shoulders so that the client doesn’t have to. Even so, the client will have a high degree of involvement and control in the construction process we have a construction manager who acts as a consultant. Apart from overseeing the entire process, the construction manager reviews estimates, solicit bids, and establish schedules. But whatever goes on, the client will be directly informed about it all the way.

Who Handles‌ ‌The‌ ‌Role‌ ‌Of‌ ‌Construction‌ ‌Manager?‌

Architects usually provide basic construction services along with routine supervision. However, a number of architects can also assume the role of construction manager, for an added fee of course. Small general‌ ‌contractors‌ and a few carpenters will also work on a manager/fee basis. But no matter who gets the role, the scheduling, negotiations, supervision, and estimating are done by the construction manager who directly consults with the client.

Disadvantage

Perhaps the only downside to favoring a construction manager is that all of the responsibility is weighed down on the client. This is because the manager adheres to their desired wishes and demands – this includes poor workmanship, disputes, and other problems. General‌ ‌contractors‌ typically assume responsibility from their side as they’re the ones in charge of the creative input, how the work needs to be done, and when.

Disadvantage

Still, it is only fair that you would assume responsibility for such things so long as you get the results that you’re looking for and also save money as well. Plus, if you happen to find an experienced, reliable, and proven construction manager via accurate references and can put together a fair and thorough deal, most of your problems can be cut short.

This post has originally been featured in Residence Style.