7 Secrets to Hiring a general contractor Vs do it yourself
When it comes to hiring a general contractor versus doing it yourself, homeowners don’t know where to turn. It’s perfectly natural. A homeowner can learn how to do plumbing or tile. But learning how to hire a general contractor is a different story.
I’ve guided many homeowners through the process. Learning the secrets to hiring a general contractor and still saving money is a different DIY skill.
What is the cost of hiring a General Contractor?
This is the first question I’m usually asked by homeowners when the subject of a larger remodeling project comes up. What is hiring a general contractor going to cost?
The markup a contractor shows in the bid is usually between 15% and 20%. Sometimes, a contractor divides the markup into smaller sections, such as Insurance, Overhead, and Profit or Fee.
Does this mean you could save 20% if you act as your own General Contractor? Probably not. Contractors buy materials at wholesale rates. And subcontractors usually give a general contractor a better price than a homeowner.
I advise clients to be upfront about the budget when speaking to contractors. It can save you a lot of time and help you to get what you want.
If the budget is too low, invite the contractors to offer their suggestions. This process is called value engineering. Some contractors are very good at it.
If you are bidding with multiple contractors, then you have nothing to lose by speaking openly about your budget. Contractors have to compete on price. They want the job. They’re not going to inflate their numbers and risk losing the job.
And you can lower the quoted prices more with strategic planning and negotiating.
Save by buying materials
A great way to save money with a general contractor is to offer to buy some of the high-priced finish items yourself. For contractors, buying some products is more trouble than they are worth. It can take a lot of time to put together some of the orders for materials, and the markup doesn’t always even cover the cost.
Many contractors will be happy to give up responsibility for buying tiles, plumbing fixtures, plumbing fittings, bathroom accessories, cabinet hardware, and the like.
And don’t be afraid to ask the suppliers for the contractor’s discount when you buy tiles, light fixtures, and plumbing fixtures. You might not get the full discount, but every supplier will provide a discount for a substantial order.
Another way you can save on buying materials is to look for bargains online. Contractors often prefer to shop with local suppliers that they know and trust. That makes sense for them.
But for you, it might make more sense to shop online. Build.com is one great resource for homeowners and professionals alike. There are many others.
Insider Tip: When you talk with your contractor about buying materials directly, ask the contractor to include the cost of bringing the materials into the house. You don’t want a call from Acme Trucking saying they’ve dropped off your plumbing fixtures on the sidewalk!
Save by value engineering
It often happens that a homeowner’s wish list exceeds the project budget. When that happens, a good general contractor can be very helpful.
Contractors are good at value engineering jobs. They know materials costs and labor rates. They can tell you which changes and substitutions will save you the most money with the least impact on the final look of the job.
Save by hiring some subcontractors yourself
Did you know that there are some trades that most general contractors will happily not perform? Painting and floor finishing are two of those.
Take on the job of painting the job yourself or hire a painter. And hire a flooring contractor to apply the floor finish for you.
This saves money for the general contractor because his/her job is finished quickly. Painting and floor finishing extend the duration of a job by at least a week or two. If a home improvement project takes two weeks less, that’s good news for the contractor. The crew can move on to the next project that much sooner.
And it gets even better. Those two trades are used to working directly for homeowners. They will often give a homeowner the same price as a general contractor. Also, you don’t lose anything. Those two trades don’t need much coordination from the general contractor.
When hiring a contractor, ask if they will provide the names of some of the subcontractors they like for those trades.
When To hire a general contractor
The average kitchen renovation will involve demolition, framing, plumbing, heating, ventilation, electrical, insulation, sheetrock, cabinets, stone, tile, tapers, and painters. This work will likely take five to seven weeks because a lot of the work has to happen sequentially.
A master bathroom will likely require just as many trades, albeit on a smaller scale.
If the work is going to take that much time with a crew of tradespeople who do this for a living, it will take a lot longer for the homeowner to do. And even when a homeowner hires all of the subcontractors directly, it’s a lot of work to manage the job. That’s a lot of coordination for the average DIYer to manage effectively.
As a very general guide, I recommend that the client hire a general contractor when:
- The work is going to take more than a couple of weeks to complete
- It requires more than two subcontractors
- You will need permits and building inspectors
benefits of hiring a general contractor
I’ve spoken with many homeowners who only very reluctantly went through the process of hiring a general contractor to do a home renovation for them. Surprise! They learned that hiring and working successfully with a contractor is their DIY project. It’s just a different kind of DIY.
Time and budget under control
A general contractor will commit to completing the project on time and on budget. If this is a kitchen project, for instance, the contractor will know the lead time for cabinets, stone counters, plumbing hardware, and a thousand other details.
There might be changes along the way. But you have a starting price and duration to measure the changes against.
Coordinating the work Simplified
You deal with just one company. You don’t have to chase down the plumber, the duct guys, or the stone installer. You can leave all of that to the contractor. Also, your contractor knows the building codes and makes sure the work passes all the required inspections.
The general contractor will have ongoing relationships with sub-contractors who can be trusted to perform to the right standard. The subcontractors are more likely to be fully insured.
Payments Simplified
You will know what the payment schedule is going to be. The payment schedule should always be included when you sign a contract.
At the end of the project, you will issue one final payment instead of a series of individual final payments. This can be important. The general contractor can get his subcontractors back if something needs to be adjusted. You may have trouble persuading someone who’s been paid in full to come back.
Also, you can have the GC provide the lien waivers or lien releases from all subcontractors and suppliers. That’s just one more task you don’t have to deal with.
Service & Warranty work simplified
When there are service or warranty issues, figuring out which trade is responsible can be difficult. When you have a general contractor, you only need to call the General Contractor. You don’t have to figure out who is responsible. It’s not your job to determine whether this is a plumbing or electrical problem.
There are times when it pays to be a great DIY person, and then there are times when it’s best to leave the work to others who do it for a living!
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It really helped when you said that contractors know the time for cabinets and countertops. I want to hire a contractor to work on my kitchen. I’ll have to keep looking online for contractors that have good reviews.
Hi Taylor. I hope you managed to find a suitable contractor for your project. I’d love to hear about progress.
I want to get a sunroom installed on to the back of my house this August. It is good to know that hiring a general contractor will generally end up saving me money. I had no idea that contractors will get discounts on materials and that will end up saving me money. It seems like I should start doing some research on good contractors in my area.
It’s good to know that the contractor knows building codes and required inspections. We want to finish out our basement this summer and I need to hire a contractor that can install a home theater. I’ll be sure to find one with the qualified experience that we can work with.
Thanks for telling me that it would be better to be honest about our budget if we’re talking to general contractors. We’re considering hiring a full-service construction company for custom home building and we’re really trying to stay on track. Maybe it would be better to look for companies online that work great with a given budget.
Glad I could help. It may seem like you’re paying more by going with a design-build firm. But there are real advantages. They will come up with a design that fits your budget. They want the job so it’s in their interest to design to the budget. Many companies will guarantee no change orders once you accept their drawings: except of course those things you ask for along the way. Ask about the range or services they provide. You want a firm that will work with you to create a design set of drawings and a construction set of drawings. How do they break out their fee structure? Will they work with you to create an initial design at very little cost? Can you purchase certain items yourself? Some firms will be quite happy not to have to buy light fixtures, tiles, appliances. You save a little money and have the fun of shopping for those personal touches.
Good luck with your project!
I find it helpful to know that hiring a general contractor is beneficial because they know the local building codes and ensure it would pass the required inspections. I’ll share this advice with my husband because he plans to have a commercial building constructed soon. He plans to have the building leased to multiple small business owners. Thanks for this.
It really helped when you elaborated on hiring a general contractor that offers warranties for their job. Last week, I heard that my cousin is interested in building commercial offices next fall, so I think he’d be glad to read your insight about avoiding delays when working with general contractors. Thanks.
I’m glad you elaborated for us that a general contractor’s role is to have ongoing relationships with subcontractors who can help perform for our building project to ensure everything is done to the right standard. I am planning to get my home renovated this summer since its age is already starting to show, so I was thinking of giving it a more modernized look to keep up with the times. I’ll keep this in mind while I look for custom home contractors to hire for our upcoming renovation project this summer.
Your explanation of selecting a general contractor that provides guarantees for their work was really helpful. My cousin has expressed interest in developing commercial offices for the autumn, therefore I believe he would find your advice on minimizing delays while working with general builders to be helpful. Thanks.
Wow, what a great idea! I like it when you suggested that we can reduce expenses when working with general contractors by offering to purchase some of the expensive finish items on our own while working with them. My colleagues and I have decided to request a new parking space for our office. Maybe we could use this trick to hire the right contractor.