How an Owner’s Representative Can Save You Money
In the early stages of a project, one of the most common questions we hear from owners—both residential and commercial—is some version of “how much does it cost” and “isn’t this what others on my team are supposed to be doing?”
The answer always lies somewhere in the neighborhood of “depending on when we’re brought in, we’re certain we can save you money.”
It's not an unexpected question, especially when project costs can be upwards of $5 million, but an honest answer is usually more nuanced than our prospective clients expect. The truth is, whether or not an owner's representative can save you money on your project depends on a variety of factors, including the size and scope of the project, your location, the design team you've assembled, how early you get a representative involved, and more.
That being said, there are ways that an owner's rep can save you money throughout the duration of a project. Keep reading to learn more about how a team like Ally Project Management can save you money on your residential or commercial build.
What is an owner’s representative, also known as an “owner’s rep”?
An owner's representative is a professional who advocates on behalf of the owner throughout the planning, design, pre-construction, and construction process. We act as an ally between the owner and the project team, working to protect the owner's best interests while also addressing obstacles or delays, managing contracts, and more. During the design and construction phases, we’re someone you can consult privately as a “safe place” to ask “dumb questions.”
While this may sound like a role that is primarily concerned with protecting the owner's financial interests, an effective owner's rep does much more than that. We also work to ensure that the owner's vision for the project is realized and that any changes or deviations from that vision are communicated effectively. In other words, we serve as both a financial safeguard and a creative sounding board—two important functions that work together.
How hiring an owner's rep can save you money
An owner's representative can save you money in a number of ways on your commercial or residential project. By acting as a liaison between the owner, architect, and contractor, they can help to ensure that the project stays on track and within an established and vetted budget, but there are a few additional ways an effective owner's rep can help to save money.
1. By avoiding or mitigating disputes
Owner's representatives can also save money by helping to avoid or resolve disputes between the owner, architect, and contractor. Disputes are not only costly in terms of time and money, but they can also delay or entirely derail a project.
2. By sharing insights on the project’s design or materials
Additionally, an owner's rep can leverage prior experiences from other projects and offer valuable insights and recommendations that can help to save money on the project. For example, an owner's rep might suggest using a certain type of construction material that is less expensive or easier to come by, but just as high-quality as the material originally specified. Or, they might be able to point out potential problems with the project design that could lead to higher costs or material delays down the road. By offering these types of suggestions, an owner's representative can help to save money while also ensuring that the project meets the owner's expectations and broader vision.
3. By negotiating on the owner’s behalf
The easiest way an experienced owner's representative will save you money is to negotiate fee agreements on the owner's behalf with the architect, contractor, subcontractors, and other project team members that prevent future fee creep. This will save the owner money by ensuring that the owner is getting the best possible terms for the project while protecting the owner from future disputes or other exposures, but requires the owner’s rep to be hired prior to building your team.
4. By helping to find the right contractor or project team
Another way that an owner's representative can help to save money is by helping to find the right contractor or project team for the job. An experienced owner's rep will have a network of trusted contractors and other professionals that they can draw from for each project. This means that owners can avoid the time and expense of outside teams that may be less experienced, less efficient, or outright fraudulent.
5. By managing change orders
Change orders are one of the most common ways that construction projects go over budget. A change order is a request from the contractor to make a change to the scope of work, and they are typically used when unforeseen circumstances arise or when the owner decides to make changes to the project, but they may also occur in less above-board means when a contractor or subcontractor simply under-bids a scope and is looking to recoup losses.
While change orders are often justified and may be a necessary part of the construction process, they can also be costly if not negotiated and documented properly. An experienced owner's representative will work with the contractor to manage change orders in a way that minimizes their impact on the project schedule and budget.
Conclusion
An owner's representative can save you money in a number of ways on your commercial or residential project. By acting as a liaison between the owner, architect, and contractor, sharing insights on the project's design or materials, negotiating fee agreements on the owner's behalf, helping to find the right contractor and qualified project team, and managing change orders, an effective owner's rep can help to keep your project on track and within budget.
To learn more about Ally Project Management's owner's representation services in the Pacific Northwest, get in touch.