What Does a General Contractor Do and Are They Really Necessary?

You have finally decided to commit to that home remodel or new construction project. Now it is time to decide who will help you along the way. You have probably heard that you should hire a general contractor, but what do they do, and are they really necessary? 

General contractors oversee and execute your new build or remodeling projects. They may be required in certain cities but they are not always necessary if you fully understand and can coordinate the building process. A general contractor can offer industry knowledge, professional experience, and peace of mind to homeowners during a hectic time. 

You have to make a lot of decisions during a home remodel, and it can be overwhelming. Who you decide to hire will have perhaps the greatest bearing on the outcome of your project.

I have built and remodeled multiple homes over the years. To date, I have never used a general contractor to manage the project. This has resulted in tens of thousands of dollars in savings but it is not for everyone.

This article will be a deep dive into all things surrounding general contractors, including everything they can do for you and some guidance about whether they are necessary. 

What Do General Contractors Do?

As I said, general contractors can bring a lot to the table and help your project go smoothly. A few things they offer include project coordination, project savings, and a license from the state.

Project Coordination

The largest component of a general contractor’s job is coordinating all subcontractors from beginning to end. This means that they hire all of the subcontractors from plumbers, to electricians, to painters. They also communicate directly with the subcontractors so that you don’t have to, saving you quite a bit of time in the long run.

After hiring, they schedule and oversee the subcontractors for the duration of the project. Because of their experience, they will know the most efficient order in which projects should be completed.

For example, the floors should always be done last because they will be ruined throughout the construction process. There are a lot of moving parts in a construction project so a general contractor’s knowledge can prevent a lot of headaches.

Also, general contractors are responsible for the quality of work throughout the project. It is their responsibility to put out any metaphorical fires, absolving you of any stress and responsibility.

If a project is completed incorrectly, it is the general contractor’s job to pay to get it fixed. Without one, that money would be coming out of your pocket.

My wife still laughs at the memory of me standing on the front porch of a new construction in a screaming fit with the brick layer because he had not followed our instructions.

The brick around the doorway was eventually torn down and built to my specifications but it was a stress point that I could have avoided had I used a general contractor. It would have been his screaming fit to have, not mine.

License and Insurance

General contractors can bring you peace of mind because they usually have to be licensed by a governing body to practice. I say usually because there is a big difference between a licensed general contractor and someone holding a hammer and calling themself a general contractor.

For our purposes here, let’s focus on licensed general contractors. Those are the only type you will want to use.

The licensure requirements vary by state or even at the city and county levels. However, a licensed general contractor will have the qualifications for the job and, even more importantly, be insured to provide construction services. 

Licensed general contractors are required to have both liability insurance and worker’s compensation. This, of course, relieves you of any responsibility if there is an injury on your work site by his crew.

If you decide not to use a general contractor, keep in mind that you will be held liable for any damages during your construction project. This might be enough information for anyone to make the decision. Check with your insurance company on builder’s insurance options and what coverage they can provide should you decide to subcontract the project yourself.

Are They Really Necessary?

In many cases, a general contractor is not necessary if you understand the project and are willing to manage it. However, they can make your life during a construction project a whole lot easier.

Consider the size of the project – if it feels overwhelming to you and you wouldn’t even know how to begin, then you likely need a general contractor.

If, on the other hand, you have a solid understanding of the project, the steps involved, and are comfortable managing the individual subcontractors, you can likely get by just fine and save yourself a lot of money. (We will cover this more shortly).

In this section, I will go over some things to consider to help you decide when it might be best to leave it up to the professionals. 

Industry Knowledge and Relationships

A general contractor who has been in the business for a long time will have many great connections and a trove of industry knowledge. They will have built relationships with many builders and subcontractors over their careers, which absolves you from weeding out which professionals you want to hire. They will also be familiar with reasonable prices. 

They will also have had the advantage of experience. General contractors will answer all of your questions about timelines, which professionals are essential, and what is the best material for your project. 

Cost

As you can imagine, the cost of hiring a general contractor can vary quite a bit and will depend heavily on the size of your project and even your location. It will cost a lot more to build a home than to remodel a kitchen, for example.

How much do general contractors charge? There are two ways in which a general contractor might charge you. The first is with a flat fee, which will be decided upfront.

The other option, which is much more common, is that you will be charged a percentage of your project’s cost. 10-20% is standard. This is usually based on the cost of the subcontractors, all of the materials, and permits.

When Should I Hire a General Contractor?

The last thing you want to do is get yourself knee-deep into something you aren’t able to manage. There is something to be said for outsourcing your headaches and a major construction project often comes with plenty of headaches.

Here a few questions you may want to ask yourself when deciding whether or not to hire a general contractor: 

• How long is the project? If you estimate that your project will take a few days or a week, then hiring a general contractor may not be necessary. If the project will last longer than that, weigh the advantages of having someone else manage it. Projects lasting longer than a week provide a lot more opportunities for things to go wrong. A general contractor will keep the momentum moving forward.
• Does your project require any special permits? If the answer is yes, consider hiring a general contractor. Building codes and permits can be complicated to navigate. Your general contractor will have a lot of experience obtaining permits and ensuring that your project meets all requirements. 
• How many different types of professionals are required for the project? If it requires more than one or two, it may be worth hiring a general contractor. Coordinating more than two subcontractors can get complicated, and you will wish you had the help of a professional. 

Other Things to Note

If you decide to hire a general contractor, there are a few things you should keep in mind. First of all, be sure that they are the right type of contractor for your job. Specifically, a residential contractor has a different set of skills than a commercial contractor. 

Second, ensure that the person you hire is not scamming you. You can do this by asking for proof of licensure and asking for references from previous clients. Another way to pick out a scammer is when they ask you to pay in cash only, want you to pay upfront. Certain situations may warrant exceptions but let your gut guide you on this a little. If it feels fishy, it probably is.

When you are hiring a contractor, you should feel comfortable asking many questions and being satisfied with the answers. Your contractor should be in your corner the whole time and work to ensure the project is just what you want.

Final Thoughts

Let me leave you with this. You really need to let your knowledge of the project and your comfort level guide you when deciding whether or not to use a general contractor.

• If you are perfectly capable of doing the job yourself but want to hire a subcontractor to handle the manual labor of it, then it probably makes sense not to use a general contractor.
• If the project is complex and beyond your knowledge level, a general contractor is probably a good investment to ensure a smooth running project that gets you the end result you are after.

The real reason I’ve never used general contractors is that in the early days my wife and I were so poor that we could not afford one. We did much of the work ourselves and only hired subcontractors for specific jobs.

If our finances had been in better shape, I may very well have outsourced those headaches to a general contractor. On the other hand, I probably wouldn’t have had to even mess with many of those projects if we hadn’t needed the money.

Building or remodeling can be a huge and overwhelming experience but you can learn so much by doing parts of a project yourself or by overseeing the subcontractors if you are comfortable with it and know the building codes.