One option we are considering is being Owner/Builders with a construction manager. I am in no way intimidating or experienced with the nitty gritty of building construction so I think a CM could be a benefit for us. I have been searching here and online for more information about this option. I have had a difficult time finding anything. Should I be searching with different search terms? (I have tried construction manager and project manager) What I am looking for is...

Pros/Cons

Pay Options (% of job, set price, etc)

good resources to research this option more etc...

We have not set that this is the method we will go with, but have a CM that comes highly recommended and is interested. We've known each other for quite awhile and have a good personality match (since I have a strong personality this is important)

IF we were to do this we want to have an extra strong contract and would definately have our attorney review it with us (and the CM agreed this would be important) though I don't have any source of contracts on this to start from etc... I will look if the AIA has some.

Would appreciate your input on this!

A105 (stipulated sum only)

A107

The AIA publishes two Construction Manager contracts but they are for larger projects:

A132 Constr. Mgr. as Advisor (manager is not financially responsible for the project)

A133 Constr. Mgr. as Constructor (manager is financially responsible for the project)

Properly defining the duties and responsibilities of the CM is essential.

Pros--no worries about staying in budget, as the owner is setting the budget--and typically blowing past it.

- no financing to worry about

-no endless calculations of cost plus or extras to an agreed-on price. (All accompanied by whining by the owner of "why are you charging me more for changes".)

-no financial worries about unforseen costs such as collapsing excavations etc.

-I able to start without any finalizing of finishes. They cost what they cost.

I can devote my attention to the construction aspects of the job and getting it done as fast as possible.

Cons

--I net up to half as much as a fixed cost contract. (I've never done a cost-plus contract. They're only just coming to be used in my area.)

--less control over trades, as the owners have a say in choosing them and they choose poorly. (Not that my choices are perfect either! Somebody usually gets fired midway or has to have their work redone.)

--financial problems can come up without notice. In one deal, the owners ran out of money midway. And even though I offered to finance the balance, they instead chose to wait for cheaper financing. I should have charged them for the two-month delay, but felt they were honest, so I didn't.

No matter how finely-worded the owner thinks their contract is, anyone going the management route has to have a lot of faith in the honesty of their manager. For instance, in return for getting the job, x masons pays the manager x thousands of dollars. There can be such a range of prices involved in any trade, the owner will never have a clue. (mrs. worthy says I'm a tight-ass fool for not taking the trades up on their generous offers.)

It just seems like too many cracks for things to fall between.

It would require more legwork on my end, pulling permits, getting the plans approved, etc... but I stay at home and am wanting to be involved anyways, so that part is tolerable.

I am still unable to find many resources online or at the library. It is frustrating as I would like to see somewhere that outlines responsibilities, example contracts, common pay amounts and methods, and experiences.

As I've posted here more than once: anyone going the management route has to have a lot of faith in the honesty of their manager.

Ultimately the Architect is providing the specing and design of the framing, my brother in law is basically building the design. However, it pretty much is, what it costs is what it costs. I will exercise control over sub selection but mainly he is running them and interviewing them, i just give final ok. I pay the bills.

Having said that, I haven't started yet, so I don't know how good/bad it will work. I also haven't worked out how we are going to compensate him. I do trust him, and his judgement which I think is the only way this works.

Exactly! That's why I have limited the owner's choice of subs to landscaping, security and cabinetry. And if I ever do it this way again, it will be restricted to security and only from a large company.

I guess my manager model, based on what an ex-partner of mine used to do, doesn't fit the schematic macv refers to.

First off, the architect/technologist provides a plan and that's that. Secondly, I select the trades and the suppliers, usually without a competitive bid--the same people I use on my own spec builds. Then I vet all bills before they are presented to the owner, who is responsible for paying them. I'm also responsible for arranging all permits, inspections etc.

What doesn't show in so many of the descriptions of custom homebuilding is that the house may be built by the subs. But their coordination--and that of material deliveries--has to be done by someone.

What diy contractors soon learn is that you have to be on-site a lot. There are dozens of "executive" decisions that have to be made. Even when the building plans are well-drawn, not everything can be accounted for. Let alone, not everyone follows the plan. If you don't catch and correct the shortcuts, no one else will. At least not when their remediation is a simple matter.

Yes, subdivisions are built with maybe one foreman per 50 homes. (Not sure of current ratios.) But a skilled construction manager can be twice as fast and the quality incomparable.

The more you communicate and spec out before breaking ground, the better. And the more you have documented on the plans and specs, the better. A good GC or CM will refer to the documentation and will make better Executive decisions with all that knowledge at hand.

Thanks for your help. My husband is an engineer and uses the AIA forms often in his commercial contracts, but they don't have this one at his work.

The shipping charge is probably a minimum. Are you buying from the AIA headquarters in DC? Forms are sometimes available from AIA chapters in major cities and the shipping might be less.

So long as we can get financing as owner builders we are planning on going this route, with a contract for the CM specifically designating the expectations, responsibilities, and compensations. We will have our attorney work on this but wanted to provide him with some AIA forms relevant and the CM had one for us to look at, so the atty can start with what the CM had in mind, what has held up in court countless time, and know what we had in mind.

I know this route has confused some of you, but in many posts about owner builders I see recommendations that they have someone on site daily with construction knowledge. That is what we will be doing. It is very similar to a cost plus (very hard concept to find here) However, we carry the insurance, we rent the dumpster, port a potties, etc...

It can't be worse than the builder we have been working with.

The Agreement form A132 must be used with the General Conditions form A232 in order to create a complete contract for construction. Most of the important terms and conditions of the contract are contained in the General Conditions rather than the Agreement form.

You will also need a separate contract with the Construciton Manager since he/she will work directly for you (agreement form C132).

If an architect is involved you will need agreement form B132.

The three sets of contracts signed by the owner (you) will consist of the A series for the contractor, the B series for the architect and the C series for other consultants.

This is how the these same documents are described on the AIA site:

A132–2009 (formerly A101CMa–1992), Standard Form of Agreement Between Owner and Contractor, Construction Manager as Adviser Edition

AIA Document A132–2009 is a standard form of agreement between owner and contractor for use on projects where the basis of payment is either a stipulated sum (fixed price) or cost of the work plus a fee, with or without a guaranteed maximum price. In addition to the contractor and the architect, a construction manager assists the owner in an advisory capacity during design and construction.

The document has been prepared for use with AIA Document A232–2009, General Conditions of the Contract for Construction, Construction Manager as Adviser Edition; B132–2009, Standard Form of Agreement Between Owner and Architect, Construction Manager as Adviser Edition; and C132–2009, Standard Form of Agreement Between Owner and Construction Manager as Adviser.

This integrated set of documents is appropriate for use on projects where the construction manager only serves in the capacity of an adviser to the owner, rather than as constructor."