We all have the desire to save money when we start large projects like a home remodel. Fortunately for you, I totally understand the urge to act as your own general contractor and really get involved in optimizing your investment while saving money at the same time. However, I am here to tell you that is the wrong approach. Here are some reasons why you should hire a professional general contractor:
The typical property owner does not have the experience required to act as a general contractor.
It is quite difficult, if not nearly impossible, to coordinate so many subcontractors while holding a full time job or running a business. There is much more than meets the eye in the construction business. There is a method to the madness and it is imperative to take action in proper order during construction. This avoids having to spend more money for a botched plan or performing tasks in the wrong sequence adding to construction costs.
There are many dangers associated with the legitimacy of the subcontractors you hire to complete the work.
A general contractor will navigate these dangers for you. They will ensure that the subcontractors on the job are well qualified and carry adequate insurances. They will also close out all of the permits once the work is completed so in the future when you go to sell your property, you are not stuck holding the bag with an open permit. If a subcontractor doesn’t close out a permit properly, and you acted as the general contractor, then you would have to track down the offending subcontractor and pray they are still in business.
If they are, then you must get them to close the permit. If they are no longer in business, you will have a costly mess on your hands. In this event, the city will require you to find another subcontractor to open a new permit, have the existing work inspected and if it passes, close the permit. However, if the work does not pass inspection, the property owner has to pay again to have the work redone – costing him twice as much for the same improvements. Even explaining that process is tedious, so do yourself a favor and let a general contractor do their job by hiring subcontractors that they have standing working relationships with and with whom they can trust to do your property’s work.
Money is not the only consideration when deciding to act as your own general contractor.
Think of all the time you will be saving and the advantages that a general contractor brings to the table. One of the greatest advantages of having one contract with a general contractor is that they will pull a master permit. This can only be closed out by the building department in your municipality. Once you confirm that they have closed all permits, you can pay them the final contract amount. Also, the general contractor gets releases of lien from the subcontractors so the property owner doesn’t have to worry about this. If things go wrong with the general contractor, at least the property owner knows the subs have been paid. Many people fail to do this and then have plumbers and electricians come after them personally even though they paid the general contractor, who then failed to pay the subcontractor. Because you had a contract with the general contractor, the general contractor is responsible for the payment, not the property owner. Fair pay for fair work is the way to go.
The least expensive general contractor is not always the best choice.
Even if one decides not to commence the construction project with their toolbox and a Home Depot hard hat that brings out the color of their eyes, many will choose the least expensive general contractor. The cheapest guy may work out well, but most often you will be extorted for more money under the need to cover “extra” and “unforeseen” change orders that were not included in a vague contract. This is a tactic used to make up the difference between the “cheapest quote” and a realistic price for the project. You must read the scope of work very carefully and make sure that each general contractor gives you a detailed outline of work so that you are comparing apples to apples. In fact, if you have hired an architect for your project, they should be preparing a very detailed plan of work that you can use as a guide. Just remember the saying “Cheap is Expensive” is very often true.
General contractors bring overall experience to your project.
You want to hire a general contractor with overall experience, as well as one who has specialized experience in the work you want to do and in the city your are doing it in. This ensures they have connections in the building department. I would definitely get references – don’t just go with “my neighbor or cousin” who is a contractor. I recommend that you check their license, lawsuits against them, and perhaps do a background check. It is very common for a general contractor to be on their tenth company. They will go bankrupt with one company and just open a new one. You should ask for a payment schedule that specifies any lien releases and be wary of contractors that ask for very large deposits upfront. Unless the job requires immediate purchase of a large amount of material, 25-30% initial deposit is more than enough to get the contractor going.
A reputable general contractor will provide quality work.
The recent real estate recession brought to light many slapstick renovations as well as illegal, unpermitted renovations. It’s like the rose colored glasses have come off because today’s buyers are more wary then before.
They will ask their Realtor to check if renovations were permitted. They also look much harder at the quality of construction and the renovations. Many badly done renovations are already starting to fall apart just 2-3 years later, and the buyers out there are far more educated now than before in the property market. Hiring a reputable, professional general contractor is even more important when renovating luxury properties. These buyers definitely know quality and have likely owned luxury property or completed luxury renovations in the past. A luxury home buyer will not pay for subpar finishes on a property, and will want to re-renovate to a higher standard which throws the money previously spent on a subpar renovation down the drain.
