Hiring a general contractor is a big decision. After all, the right GC can turn your construction project into a smooth, successful experience. The wrong one, however, can lead to delays, budget overruns, and endless headaches.

We’re here to help you avoid that issue. In this guide, we walk you through what general contractors do, what to look for when hiring one, and seven clear steps to find the right fit for your project. 

What Does A General Contractor Do? 

A general contractor, or a GC, manages your construction project from beginning to end. 

They’re the main point of contact between you and everyone working on your build. Before construction work begins, they’re responsible for:

• Developing the budget: They estimate costs and help you understand what your project will actually cost
• Hiring subcontractors: They bring in specialists, such as electricians, plumbers, and roofers, to handle specific tasks
• Working with architects: They review designs to make sure everything can be built as planned

Once work begins, your GC shifts into full project management mode. They take care of everything—from overseeing daily work to managing the schedule and handling inspections.

The GC is still expected to do the following before a project is deemed finished: collect final paperwork, handle punch list items, and ensure final payments.

What to Look for in a General Contractor

Relevant Experience

Past performance is the best predictor of future results. You want a GC who has completed projects similar to yours. If you’re renovating a historic building, find someone with restoration experience. Building a new warehouse? Look for commercial construction expertise.

Strong Subcontractor Relationships

As a rule of thumb, your GC is only as good as the subcontractors they hire. So, be sure to ask about their subcontractor network: Do they work with the same trusted subs repeatedly? How do they vet new subcontractors before bringing them onto a job?

Commitment to Safety

A safe jobsite protects everyone and keeps your project on schedule. Ask about the contractor’s safety record. Request their EMR (Experience Modifier Rate). An EMR below 1.0 means they have fewer accidents than the industry average. Above 1.0 means more accidents.

Tips For Choosing A General Contractor

Step 1: Define Your Project Clearly

Start by defining your project’s scope as clearly as possible. This is important because it sets the foundation for all the crucial decisions you’ll make afterward. 

You don’t need a perfect blueprint, just answers to key questions most contractors would ask their client. But the more well-defined your vision, the more accurate and easily comparable the bids you’ll get. 

Assess the size and scale of your project. Are you doing a minor upgrade or a massive renovation? Different project scales require different types of general contractors, and your answer will determine this.

Depending on the type, complexity, and purpose of the structure, you may need one of the following types of builders.

• Residential Contractor: A residential contractor specializes in renovating, repairing, and constructing residential properties. Depending on the state, they may only be limited to working on single-family homes.
• Corporate General Contractor: There are GCs responsible for large-scale and more complex projects, including both commercial and residential. New home construction, multi-unit residential buildings, and retail spaces are in their purview.
• Construction Management (CM) Contractor: CMs oversee and coordinate all phases of the construction. They work with subcontractors for certain tasks while ensuring the project is completed on time and within the given budget.
• Design-Build Contractor: Unlike a CM, design-build contractors are responsible for both the management and construction of the project. Design-build firms often consist of a designer, a contractor, and other employees who work under one contract.
• Handyman Contractor: Also known as a “jack-of-all-trades,” a handyman performs simple tasks, including minor carpentry, paint jobs, and electrical repairs. They usually don’t need specialized licenses.

Writing a concise project brief is an effective way to clarify the work to be done. In your brief, jot down the budget range, start-to-end window, materials or brands you prefer, and the non-negotiable features you’d like to see in the final build.

Visual reference goes a long way, too. So, include some drawings and inspiration photos for your GC to review. Don’t forget to list constraints, such as noise curfew, gated access, and other relevant neighborhood rules.

Step 2: Gather Recommendations and Do Research

Gathering recommendations from dependable sources is a quick way to find a high-quality general contractor—or any other work in general.

Talk with family, friends, and neighbors, as they’re more likely to offer realistic and unbiased experiences. Anecdotes often give invaluable insight into a GC’s work ethic, quality, and professionalism.

Local trade groups, such as a county home-builders association, are another useful resource for connecting with reputable contractors in your area. 

Examples include the National Association of the Remodeling Industry (NARI) and the National Association of Home Builders (NAHB), which provide curated lists of qualified professionals for specific projects.

Develop a long and short list for GC candidates, and narrow down your options by conducting a thorough background check. Basic Google and social media searches can reveal a lot, but phone calls are an excellent avenue for performing due diligence.

Ask whether they take on projects of your size, how many projects they will work on alongside yours, and if they can present financial references, photos of recently completed works, or a list of their previous clients.

Learn about which professional associations they’re affiliated with. You can use this information to learn if a GC is up to date with their tools, construction techniques, building technologies, safety practices, and quality standards.

Think of the Associated General Contractors of America (AGC), the Building Industry Association (BIA), Associated Builders and Contractors (ABC), and other trade organizations that contractors can be a part of.

Step 3: Verify Credentials and Licensing

Constructing and remodeling a commercial space is a big investment. So, you must ensure your general contractor has all the necessary credentials, licensing, and insurance before you hire them.

Experience comes first and foremost. A reputable GC won’t have issues sharing how long they’ve been in the business. And longevity is often a sign of career and financial stability, which is what you want. 

For licenses, this can vary from one state to the next. Alaska, for instance, has the Division of Corporations, Business and Professional Licensing, while California has the California Contractors State License Board.

Confirm a builder’s license by looking up their number and its status in your respective state’s licensing board. Some organizations keep track of disciplinary actions taken against a contractor.

Insurance is just as crucial, as it protects you from a wide variety of risks during construction. Don’t hesitate to ask if they have premium liability coverage, not only for themselves, but for their entire team and subcontractors.

For extra assurance, you can ask for evidence of OSHA training for each worker involved in your project. A completion card or certificate is usually given after a 10 or 30-hour Outreach Training Program.

Then there’s bonding or construction bonds. This document safeguards from financial loss in case your GC fails to meet project standards or goes into default. Like insurance, it covers construction expenses.

Never neglect this step. If a builder says they’re licensed, insured, and bonded but can’t provide sufficient documentation, walk away.

Step 4: Review Portfolios and Past Work

Past success is a marker for future success. Remember this when choosing a builder for your project, as their work history can reveal their workmanship and attention to detail. This can be crucial in deciding if they’re a good fit.

How did their previous jobs turn out? Do they specialize in certain builds? Ask for similar projects similar in style and scale to yours. 

When speaking with a firm’s references, inquire about how well they stuck to the schedule and budget. Note if their work is consistent across various jobs.

Find out if the GC is open for a meeting, preferably at their current project site, where you can see their work in person.

Once there, observe their adherence to safety standards, organization, and management. The workers’ demeanor can also offer a better idea of their management style. 

During face-to-face meetings, take the chance to discuss your project in detail and convey your concerns.

Step 5: Get Multiple Bids

Never hire a builder without comparing their estimate with others. When reviewing, pay close attention to the cost breakdown they provide. A high-quality builder shouldn’t be afraid to help you make informed decisions in your project.

Ideally, quotes should include a comprehensive summary of the materials costs, labor, and other expenses, as well as the GC’s profit margin.

In most home renovations, materials usually account for about 40% to 50% of the total expenses. That leaves 30% to 40% on labor and 10% to 20% overhead or profit. Understanding this makes identifying discrepancies between bids easier.

A transparent quote eliminates confusion between the general contractor and the client, ensuring a smoother build experience for everyone. 

The timeline is another aspect you want to clarify early on. Discuss your expected start-to-end period with each contractor and make sure it aligns with their own estimates. This guarantees that you and the GC are on the same page.

Still, delays happen—sometimes to no one’s fault. Despite how clear-cut your timeline is on your contract, unexpected circumstances may arise, so be realistic in setting deadlines.

Watch out for contractors that pressure you into securing their services. It can be a sign of underlying issues that could hurt your project in the long run.

Step 6: Evaluate Communication and Compatibility

Effective communication is key to any successful business transaction. A builder committed to client satisfaction should have no problems keeping you in the loop and responding to your queries. 

Notice the timeliness of their responses during your initial correspondence. Observe how clearly they address your concerns. Also, mind their willingness to learn and adapt to your preferences and priorities.

An ideal general contractor must be serious in taking and understanding your input and carrying out your vision.

Who will be on-site daily? How will you get notified of unforeseen situations on the site? For this, you can ask for a primary contact, whether that’s a project manager or the owner, to establish a protocol in case of emergencies.

Good firms keep an open communication line, whether that’s through emails, meetings, or phone calls. And you have a say in this, so ensure to convey your preferred mode of communication.

Of course, you must do your part, too. Always be responsive to your GC’s questions, requests for approvals, and extensions. 

Step 7: Review the Contract Carefully

The contract is where your agreement becomes legally binding. As such, it’s always good practice to review your and your GCs contract carefully before signing.

When drafting a contract, make sure to set up a well-structured payment schedule, with payments tied to specific construction milestones.

This guarantees a consistent payout and motivates contractors in meeting deadlines and quality standards. Not to mention, gives you control over the project’s overall progression.

Your contract must be clear and well-written. If unsure, have a lawyer review the proposal for your and the builder’s protection. 

Here’s a red flag: Avoid contractors that demand large upfronts, as this could be a warning sign of financial issues. Even for big projects, the standard practice is paying about a third of the estimated cost as downpayment.

FAQs 

What is the average cost for a general contractor?

Most general contractors charge 10 to 20% of your project’s total construction costs rather than an hourly rate. Larger, established firms may charge up to 25%. This percentage covers their overhead costs, insurance, taxes, and profit margin.

What is the difference between a contractor and a subcontractor?

A general contractor holds the main contract with the property owner and oversees the entire project. They manage the budget, schedule, and all aspects of construction.

Alternatively, subcontractors are specialists hired by the general contractor to perform specific tasks like electrical work, plumbing, or roofing.

What questions should I ask a general contractor before hiring?

Ask the essential questions before signing any contract:

• Can you provide references from recent similar projects?
• What’s your estimated timeline for my project?
• How do you handle unexpected costs or changes?
• What’s included in your contract price?