When planning your custom home in Prior Lake or Lakeville, one of the most important decisions you'll make isn't about design or materials—it's about who will manage your project. Understanding the difference between a construction manager and a general contractor can save you tens of thousands of dollars and transform your building experience from stressful to seamless.
The distinction between these two roles fundamentally changes how your project unfolds and, more importantly, how much you'll pay. According to industry research from CRB, construction managers contract with homeowners for a fixed fee, while general contractors charge a lump sum that includes their overhead and profit margin.
Construction managers work as your advocate from the beginning of the project, often before designs are finalized. They help you make informed decisions about materials, budgets, and timelines while operating on a transparent, open-book pricing model.
General contractors, on the other hand, typically enter the project after designs are complete. They bid on the finished plans and work to maximize their profit margin within that fixed price—which means any cost savings they find go into their pocket, not yours.
Let's break down typical general contractor pricing so you understand what you're really paying for. Most general contractors operate on a markup model that includes:
This traditional model creates a fundamental conflict of interest. Once a general contractor commits to a fixed bid, their financial incentive is to minimize costs and maximize the spread between what they pay and what you pay. As Procore's analysis explains, "GCs get paid from the profit of the work they do. They bid on a project and hope to spend less to complete the build than what the owner pays them."
At Moderno Construction Management, we pioneered a different approach in Prior Lake and the South Metro area. Our project management model puts your interests first through:
Open-Book Pricing: You see exactly what every subcontractor charges and what materials actually cost. No hidden markups, no mysterious line items.
Competitive Bidding on Everything: We solicit multiple bids for each phase of your project—electrical, plumbing, framing, finishing—and you participate in selecting the best combination of quality and value.
Fixed Management Fee: Our compensation is a transparent percentage based on your project scope, not on how much you spend. This means we're motivated to help you save money, not inflate costs.
Early Design Input: We work with you and your architect before plans are finalized, identifying cost-saving opportunities and potential issues before they become expensive problems.
One of the most significant advantages of working with a construction manager is early involvement in your project. According to research from Texas A&M's Construction Science program, construction managers "provide valuable input during the design phase to ensure the project is constructible and cost-effective."
This early collaboration allows us to:
The fundamental difference between these two approaches comes down to incentives. Industry analysis from Delphi Construction clarifies: "Once a general contractor is hired in a lump sum or fixed price environment, they have an incentive to protect or enhance their profit margin."
With Moderno's construction management approach, our incentives align perfectly with yours:
Our comprehensive project management goes far beyond what most homeowners expect. When you work with Moderno Construction Management, you receive:
Pre-Construction Phase:
Construction Phase:
Post-Construction:
Let's address some myths we frequently encounter from homeowners in Lakeville and the South Metro:
Myth #1: "Construction managers cost more than general contractors" Reality: The opposite is true. While a management fee might seem like an additional cost, the elimination of markups on labor and materials typically saves clients 10-15% overall.
Myth #2: "I'll have to manage more details myself" Reality: Construction managers actually handle more of the complex coordination. You're involved in decisions, but we manage the execution.
Myth #3: "General contractors are more accountable" Reality: Construction managers are hired by and work for you exclusively. General contractors work for themselves while serving you.
Myth #4: "The process takes longer with construction management" Reality: Early involvement and better planning often result in faster, smoother construction with fewer delays.
The South Metro market presents unique challenges that make construction management particularly valuable. Our three generations of experience in Scott County taught us that successful custom home projects require:
Local Regulatory Expertise: We navigate complex zoning requirements, especially for acreage properties and lakefront builds. What might take an out-of-area contractor weeks to figure out, we handle efficiently because we've built relationships with local officials over decades.
Established Vendor Relationships: Our long history means we work with the best subcontractors in the area who provide competitive pricing because they value our repeat business. These relationships benefit you directly through better pricing and scheduling priority.
Market-Specific Knowledge: Building on Scenic Bay Estates lakefront lots requires different expertise than developing Harvest Bluffs acreage. We understand these nuances intimately.
"We appreciate the project management style that Moderno offers versus a typical builder. It allows us to be more involved in the every day decisions. Jake, Ashlee and Alex have been so great at walking us through every detail of the process so it doesn't feel overwhelming." — Megan DeMeuse, Prior Lake Homeowner
This client feedback highlights what makes construction management different: involvement without overwhelm, transparency without confusion, and advocacy without agenda.
We believe in honest guidance, even when it means recommending an alternative approach. A traditional general contractor might be appropriate if:
However, for complex projects like lakefront construction, acreage development, or custom homes where you want input throughout the process, construction management delivers superior results.
Here's what it comes down to: Do you want a builder who profits more when you spend more, or a project manager whose success depends on your satisfaction?
The Design-Build Institute of America found that 76% of owners reported "very good or excellent" experiences with construction management approaches, compared to traditional contractor models.
At Moderno, we've built our reputation on one simple principle: keeping the move-to-acreage dream alive through honest, transparent project management. After 800+ completed homes, we know that the best projects happen when everyone sits on the same side of the table.
If you're planning a custom home in Prior Lake, Lakeville, or anywhere in Scott County, we'd love to show you the difference that transparent project management makes. Our approach typically saves clients 10-15% compared to traditional contractors while delivering superior results and peace of mind.
Contact Moderno Construction Management to discuss your project and learn how our construction management approach can transform your custom home building experience. Let's build something exceptional—together, transparently, and with your best interests at heart.
