Key Takeaways:
- The unique challenges facing SWFL property and homeowners demand Owner’s Rep Construction services to level the playing field.
- Both fixed price and cost plus fee contracts present challenges in Florida’s inverted construction market
- Builders ultimately put their interests first, while owner reps advocate on behalf of the owner’s best interests.
- NCHCC helps owners protect their investment by applying unique expertise over a range of project management services.
The easiest question you can ask if you’re planning to start a construction project is this: do I need an owner’s representative for my custom home project?
The answer: Yes!
You wouldn’t buy something without knowing how much it costs – right? That is why most things, including typical new homes, are sold for an exact, “Fixed-Price” (FP). With FP homes, the Builder has determined – and has a strong incentive to control – what their costs are for the project.
But Custom Homes and Remodeling Projects are different. Builders can’t know exactly what resources will be needed for the job, so they can’t offer a fixed price. Instead, they will propose to do the work on a “Cost-Plus-Fee” (CPF) basis.
With a CPF Contract, the Builder provides the Owner with an Estimate of the job costs and agrees to accept a lower Profit percentage than usual. In exchange, the Owner agrees to pay for all of the Project’s costs – regardless of their final amount or the manner in which they are incurred.
This feeds into our question: “Do I need an owner’s representative for my custom home project?” Let’s think about the market.
CPF deals work in a typical construction market. But Florida is not a typical market. It is “inverted”: there is more work than there are resources available to do it. Unprecedented Material cost increases and Labor shortages exacerbate expenses. These are also reasons to consider Owner’s Rep Construction services, but more on that later.
All of the market forces that drive competitive pricing and high quality are weaker in Florida’s construction market, which continues to push costs up. This means that Project cost control is challenging on every local construction Project, whether the job is an FP or a CPF.
With a CPF deal, however, the Owner (you), not the Builder, is exposed to all the delays and cost risks in a market that exploits those exact vulnerabilities. That’s the “injury”. The insult? You’ve left a fox to guard the henhouse: a Builder who isn’t obligated to control your costs and who actually makes MORE money the higher the costs are!
Builders must compete for said resources. The Fox doesn’t raid the henhouse with ill intent toward the Farmer; he does it because chasing down hens otherwise is difficult. In fairness, most Builders, likewise, aren’t actively trying to take advantage of Owners.
Compromising an Owner’s time and money is simply the easiest way for them to navigate the “inverted” market and compensate for their own poor Project Management. How will you know how much of your time and money is being compromised?
An owner might feel a little guilty for considering our central question of “Do I need an owner’s representative for my custom home project?”, Wouldn’t that make the builder think they’re not trusted?
Owners typically like their Builders. They rely on them to act in “good faith” to manage costs, but assurance is not insurance. All Foxes Builders must, ultimately, put their best interests ahead of yours. So, who’s really in your corner? The answer is – Owner’s Representatives.
Owner reps work with the Team, but solely for you, ensuring that your needs for the Project (cost, schedule, quality) are met. With 25 years of first-hand, local experience, Naples Custom Home Cost Consulting offers a full range of Construction Project Management Services to assist Clients, including Owner’s Rep Services that no one else ever has or can.
We take every opportunity to create equity by adding value to your home, and we know how to keep Builders in check without undermining them. Yes, owner reps providing construction services work with the builders, while still prioritizing the owner’s best interests..
With CPFs, YOU ARE buying something without knowing how much it will cost. Are you really on a budget? Schedule? Is your Project being managed as well as it could be? Hint: it’s not. It’s everything you won’t/can’t know about your Construction Project that, now more than ever, will cause you to incur considerable, but unnecessary, costs.
Summary: SWFL Owners Need an Advocate
So, finally, “do I need an owner’s representative for my custom home?”
Yes, just like a farmer needs a guard-dog for the henhouse.
In a market that strongly favors contractors and builders, property owners and homeowners need someone in their corner to ensure their needs for the project – cost, quality, and schedule – are met. From cost control and project management services to ensuring a project’s cost, duration, and quality are kept in check, owners need an owner’s rep to serve their construction project’s best interests.
NCHCC uses their expertise to empower owners to make more informed decisions. Owner rep services save money, prevent costly delays, and provide peace of mind during their custom remodel or new custom home construction.
To level the playing field and combat the inverted SWFL market, owners rely on trusted owner representative services. Working with an owner rep is like hiring a guard dog to protect the hen house. Enjoy savings and peace of mind. Contact NCHCC for a free consultation and to guard your investment.
