Sometimes people wonder what the value of a general contractor is when building a house or commercial building. I have actually been told by owners they would rather save the money and do the project by themselves. There isn’t anything wrong with managing your own building project, but I want to explain why it is worth it to hire a GC.
First, just to be clear, the GC is going to charge a fee for his services, so it may appear more expensive at first look. Also, every GC has a markup rate depending on how much overhead they have and what kind of services they provide. Some may only do very little with each project, while others are very involved and offer more for the money.
A building project has many parts to it that an owner may not realize have a huge affect on the project.
For starters, where do you get your plans drawn? Do you go to an architect and pay $20,000 to $40,000, or would you go to a draftsman and pay $3,000 to $4,000? You could also choose a middle-priced service with a house designer for maybe $10,000 to $20,000. Which options are going to get you what you want and make the project successful? Once you decide this, who is going to do a good job?
Once you have complete and accurate drawings, you can begin compiling bids for each element of the house-building project. Who do you go to for your subcontractors? Do you have relationships with good reliable framers, concrete folks, plumbers, tile folks? Will they show up for a one-time customer? Will they come back when a problem arises? Are they pricing themselves higher because they think there won’t be a good system to get the job done quickly?
Once the drawings are completed, you need to acquire financing. Many times, the bank will actually require a GC to manage the project because the likelihood of the project going smoothly is much higher with a good GC, and the bank wants that protection for themselves.
Now you need permits. To build in most areas, you need a building permit and will need to assemble a permit package based off the city or county requirements. This could also include other things like lot line adjustments, easements and variances, depending on the circumstances.
Your about to break ground and need to consider the best location for the house to make the most sense. Can you make sure the water flows around it correctly while still getting the views you wanted? How about the pitch of the driveway? One must also make sure the house isn’t too high on the hill so your driveway isn’t too steep.
Even with those steps in place, planning hasn’t reached where needed to keep subs on budget, finding the right materials, making sure the selections are kept track of and communicating the information to all parties involved, building change orders, ensuring insurance requirements are met, keeping production going and being there as a go-to single source of information for the entire project. These are things that most people could do with a little determination and grit, but a GC does these things every day and has the systems to do so. Imagine if you had made a small mistake on your project, like relying on the excavator to set the depth of the foundation hole, and it’s not the right height? This mistake alone could be more costly than hiring someone to manage the project, and there are thousands of other things that are possible.
So, I would suggest a general contractor is always appropriate to hire unless the owner is confident they can handle all of the aspects of building and not have costly mistakes that a general contractor has already learned to navigate for you.