Hire a General Contractor to Build Your Home

Now that you have your land and you’ve prepared it for building, it’s time to find the right professionals to build your home. This isn’t as simple as Googling “General Contractor Near Me,” like you would a pizza place or burger joint. Hiring a general contractor to build your home is a little more involved. Luckily, this article will guide you through the process, helping you get the best contractor for your soon-to-be-built home!

What Does a General Contractor Do?

A General Contractor (GC) oversees the home building project, hiring professional subcontractors to get the job done within budget and on time. They also take care of acquiring building permits and materials. They have the know-how, relationships, and expertise to make sure your home gets built to your specifications, which makes a GC the lynchpin of a smooth home building project. 

What Do You Need Before Hiring a General Contractor?

You’ll generally want to present the GC you choose with a blueprint of the home. You can hire an architect to draw up these blueprints. Or, you have the option to purchase pre-existing blueprints if you won’t be doing customizations on your home. 

So, let’s say you have your blueprints on hand and you’re happy with them. How do you go about finding the best general contractor?

Tips for Hiring a General Contractor

The following items will help you decide on the right contractor for your home building project. 

Ask Around

Do you know anyone in the area who has recently hired a general contractor they were pleased with? Word of mouth is often a great way to get started. So ask friends and family if they have any recommendations for general contractors. Of course, a raving review from a friend or relative is good, but it doesn’t mean you should skip the other items below!

If none of your friends or family members know of a good GC, you can always check online and compare ones that seem good against Better Business Bureau listings. You can also talk to a local building inspector to get the inside scoop on which contractors do quality work the first time around.

You’ll want a list of between three or five general contractors that you can contact in the following steps.

Call Them With a List of Questions

Before you decide to meet any of these GCs in person, ‌call them and ask some important questions. Jot down their answers so you can keep track of them. These questions include:

• Can they provide financial references from banks or suppliers?
• Do they normally take projects of your size and scope?
• Are they fully licensed and insured?
• Do they work with licensed subcontractors?
• Can they give you a list of previous client references?
• How long have they been working with their subcontractors?
• How long have they been in business and how many homes have they built?
• How many different projects will they have going at once if they take yours?

The answers to these questions can tell you a lot about the GC. If they’re not willing to give client or financial references, you may want to cross them off your list. The other answers aren’t really make-or-break, although they’re good to keep in mind as you interview other GCs. 

Call Their References

Calling the references your shortlist of GCs gave you is an important way to follow through. You’ll want to make sure these people were actually happy with the work or if there were some problems that took extra time to sort out. You’ll learn a lot from talking to these references. 

Schedule a Meeting

Hopefully, you still have three or four general contractors on your list at this point in the process. A minimum of two is essential at this point, as they’ll give you a frame of reference when you do meet them. If you’re down to just one, search for another one and schedule a meeting. 

Some things to look for in your face-to-face meeting with your potential general contractors:

• Communication is smooth and clear. 
• All your questions are answered to your satisfaction.
• You get a sense of professionalism and responsibility. 
• You can see an easy working relationship with this person for the six to seven months it will take to build your home.

Get Bids

Once you’ve met with and foresee a good relationship with the GCs on your list, it’s time to ask for bids. The most common breakdown of new-home construction with a general contractor is as follows: 40% of the total bid cost for materials and 60% covering everything else, including overhead, labor, and the typical 15% or 20% profit margin that goes to the GC. 

They calculate the total bid by adding up the cost of labor, materials, various expenses, and overhead while adding their 15% to 20% profit margin. 

Ask each GC on your list to break the bid down like this so you can see how much they expect each facet of the build to cost. 

It’s important to note that you’ll likely need to pay a fee for each bid, as they require significant work on the part of the GC. This is normal. Bid packets range in cost from $200 up to over $1,000.

The Low Bid Isn’t Always the Best Bid

It can be tempting to go with the lowest bid you get, but don’t let the lowest number influence your overall decision too heavily. Slight differences are common, but if one GC comes in with a significantly lower bid than the others, it could be too good to be true. 

Use the bid breakdowns to see if you can figure out why their bid is so low. The last thing you want is for the builder to use sub-par materials or less-than-professional subcontractors to build your home. 

Ask About Payment Schedules 

Once you have bids, but before you make a decision, ask about payment schedules. Most GCs will ask for 10% of the total project cost upon contract signing. Then you’ll generally pay three payments of 25% at intervals during the build. You’ll then pay the last 15% when all is said and done and you’re happy with the work. 

Be wary of contractors that ask for much more than the 10% up-front. If they ask for over 20%, it’s a red flag that may mean they’re strapped for cash or concerned that you won’t want to pay more when you see the quality of their work. 

Draw Up and Sign the Contract

Once you’ve decided which General Contractor is right for you, it’s time to give them the good news. It’s important to get a thorough contract to make sure all the requirements are clear. Make sure the contract includes the following:

• Project start and (estimated) end date. 
• Payment schedule.
• Proof of insurance and worker’s comp.
• Materials to be used.
• Products and fixtures to be used.
• Agreement of the contractor to obtain lien releases from suppliers and subcontractors.
• Information about third-party home-builder warranties.
• Agreement of contractor to transfer appliance and fixture warranties upon completion. 

Contracts are designed to protect you and the General Contractor during the job. A written and thorough contract is essential for such a large and complex project. 

Conclusion

Hiring the right general contractor takes a little bit of work, but the benefits and peace of mind you get in return are priceless. Someone who is professional, well-organized, and communicative is key. And with the tips above, you should have no trouble finding the best General Contractor for your home building project. 

Once you’ve signed the contract and transferred the first payment to the General Contractor, the fun begins! Stay tuned for the next post in this series about the actual building of the home. We hope this article helps you on your land-buying and home-building journey. Land Elevated is so glad to be a part of it!