By Robert Kociecki
General contractors (GCs) oversee new home builds and manage large remodeling and renovation projects. They handle everything from initial planning down to the last coat of paint. It’s an important job, and a well-paid one: GCs usually charge about 15 to 20 percent of the project’s overall budget. Taking on the GC’s responsibilities yourself and managing your own project lets you keep the GC’s profit. Even if you don’t perform any of the labor yourself, you’ll experience the satisfaction of having had a direct hand in the project’s success.
Unfortunately, the general contractor can also be responsible for a project’s disastrous failure. The GC role should not be taken lightly, especially for large projects like building or doing a room addition or kitchen remodel. Even remodels can involve multiple subcontractors and take weeks to complete. Before taking on the GC role, ask yourself these five questions.
1. How well do you know the construction process?
A high-quality general contractor will combine the homeowner’s vision and the designer’s plans. The GC evaluates the plan to make sure it will work, and he or she must be available to answer questions from subcontractors on the job.
Large projects require building permits, and the GC is responsible for obtaining them. The local building code authorities may inspect your work throughout the process, so the GC needs to make sure everything done meets code.
Construction work usually follows a specific sequence, and the GC will ensure that each subcontractor can perform their job without unnecessary delays or problems. For example, the sub who installs the countertop in a kitchen might show up to the jobsite before the cabinets are installed. With five, six, or more subs on the job, confusion and delay will lead to mistakes and cost overruns, not to mention unhappy subcontractors.
2. Can you hire and manage your project’s team (subcontractors)?
A good general contractor will have a list of local subcontractors he or she can call on to bid their portion of the job. The GC can evaluate whether the sub is reliable and can perform quality work. In turn, the subs will want to do a good job so they are included in the GC’s future projects.
New GCs may not know any trusted subcontractors, which can present a challenge. Get to work building your subcontractor database by:
- Doing your research. Look online for local subcontractors and read their reviews. The Better Business Bureau can be a great resource as you build your subcontractor list.
- Asking around. A reliable subcontractor can lead you to other quality subcontractors. Ask your HVAC technician if he or she knows a good electrician and build your list that way. Don’t be afraid to ask neighbors and friends too.
- Using caution. Be careful about the people you hire. Be sure to get recommendations from people you trust and check references before you agree to any work.
The general contractor is also responsible for scheduling the subcontractors. Again, you want to avoid one sub getting in the way of another or having to rip out or change one sub’s work so that another can do his or her job. Planning is key. One scheduling snafu can throw off several different subs and lead to delays.
As the GC, you will also need to manage the project at every step to ensure you’re meeting quality standards, deadlines, and budget. If things are not going as you wish, address the problem quickly with the right people.
3. Have you purchased construction materials and supplies in bulk?
The GC negotiates with suppliers and arranges for delivery of materials, so you’ll need to develop relationships with these suppliers as well. Some special-order items like windows or cabinets can take weeks for delivery, so you’ll need to build that time into the schedule. The GC should make sure the delivery schedule aligns with the subcontractor work schedule.
4. Are you a problem solver?
Stuff happens. A GC will probably experience at least one delay, mistake, or unforeseen problem with any big project. It could be anything from an unresponsive subcontractor to windows that are the wrong size. The GC deals with problems quickly and creatively.
5. Are you familiar with the behind-the-scenes management tasks the general contractor handles?
Here’s a list of (some of) the other tasks that fall to the general contractor:
- Securing building permits
- Arranging for inspections at project milestones
- Obtaining insurance coverage for materials, fixtures, and equipment during the project
- Acting as the go-to person for questions and concerns from subcontractors, neighbors, and authorities
- Paying the subcontractors
- Securing lien waivers from subcontractors and suppliers. A lien waiver is a legal agreement that states that the GC has paid the sub and the supplier. Without this document, an unhappy subcontractor can put a lien on your house.
Successful builds, remodels, and renovations hinge on the planning and scheduling stages. You don’t have to be on the site full time, but you should plan to visit and evaluate the work and progress daily. Acting as your project’s general contractor is a big job, but you may enjoy the process of overseeing your project from start to finish. It takes a well-organized person to do it right, so do your research, ask lots of questions, and manage your team effectively.
Robert Kociecki is a real estate industry expert who serves as the Senior Vice President of Property Management and Renovation at Altisource. Altisource and its affiliates provide real estate services for consumers and investors. Visit Owners.com, where home buying and selling is made simple.