What Is A General Contractor?

Charles & Hudson/flickrWhen you’re planning a medium to large-scale home improvement, you may hear that you should hire a general contractor ... in addition to the plumber, painter, drywaller, etc., etc. you already had in mind. If that leaves you wondering, “What is a general contractor and why should I hire one?” wonder no more. Here’s a guide to all you need to know about general contractors, including why – and how – to pick one.

What Is a General Contractor?

A general contractor is an important figure in large residential and commercial renovation or remodeling projects. He or she is there to hire and coordinate all the home improvement professionals needed. A great comparison is likening your general contractor to an event planner: both are there to oversee all aspects of transforming your plans into a successful reality

When Should I Hire a General Contractor?

Hire a general contractor when:

  • You need someone to provide and coordinate several types of pros (like carpenters, plumbers, electricians, and flooring specialists for a kitchen remodel)

  • Your home improvement project will take a week or more to complete (such as a room addition or basement finishing)

  • You require multiple permits to cover all the work that needs to be done (for instance, hardscape that includes a deck, a fence over 6 feet, excavation, etc.)

Why Should I Hire a General Contractor?

“What is a general contractor actually necessary for?” you may ask. “Couldn’t I just find sub-contractors myself?” Well, yes, you could … in theory. However, here are 3 excellent reasons to hire a general contractor:

  1. A general contractor knows the best people to use for your job, whether his own in-house crew or trusted subcontractors.

  2. He’s familiar with large projects and knows how to schedule tasks. Example: painting must be scheduled AFTER drywall installation, which in turn, comes AFTER plumbing.

  3. Your lending institution may actually require you to hire a general contractor to qualify for a home improvement loan.

Does a General Contractor Need a License?

Each state has its own laws regarding the qualifications for a general contractor. In some states, all general contractors must be licensed. In others, licensing may be necessary for certain types of home improvement or projects above a specific dollar value. The National Association of Home Builders provides detailed state-by-state general contractor licensing information.

How do I Choose a Reliable General Contractor?

You and your general contractor will be working together for the long haul -- while subcontractors come, complete their task, and go -- so make sure you choose a good one. Look for:

Up-to-date license. In states where general contractor licensing is the law, the license must be regularly renewed (usually annually or every 2 years).

Recommendations and reviews. Check for verifiable customer testimonials to the quality of the general contractor’s work, and no history of unresolved complaints with the Better Business Bureau or state licensing board. Search court records for any past litigation.

Financial references. Request references from the GC’s bank and/or suppliers, to ensure that he’s in sound financial shape and unlikely to file for bankruptcy before your project is done.

Insurance. Check for comprehensive, valid insurance coverage. Confirm what will be covered by his business insurance and what by your homeowner policy.

Multiple bids. Get 3 to 4 general contractors to bid on the work so that you can compare prices, materials, and timelines. (And be wary of anyone who is too cheap!)

Comprehensive contract. Hire only a general contractor who’s willing to sign a contract detailing the work to be done, products to be used, and timeline for payments linked to specific goals. The contractor should also sign a lien waiver when you make each payment, confirming that he and his subs have no grounds to take out a lien on your house for unpaid work.

What is the Cost to Hire a General Contractor?

The cost to hire your general contractor may be either:                     

  • A flat fee for the project OR
  • A percentage (usually 10-20 percent) of all project costs, including subcontractor fees, materials, permits, etc.

Make sure this is clearly spelled out in your contract.

Laura Firszt writes for networx.com.

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