General Contractors

What do general contractors do?
General Contractors are in charge of looking up every step of your project. They are the main head who does the employing and hiring of all the other subcontractors. They guide them in every way possible. Moreover, they do scheduling, asking permission from the building owners, and ordering the materials to bring about the project.
The general contractors supervise all the subcontractors such as carpenters, plumbers, and painters to make sure that everything is going smoothly and the work is being done effectively and according to our requirements. They will serve as the main contact during the entire project, and they should be in a position to explain things to you regarding the project and also share ideas with a specific subcontractor. Some general contractors take on both residential and commercial work, and there are some which stick to only one type of project.
You may want to hire a general contractor for big and laborious projects or when you have multiple renovations planned.

Should I hire a general contractor?
Giving your house or workplace, a makeover can be a very intimidating job. Unless you have the expertise in plumbing, construction, and electrical wires, you should take your steps towards a professional general contractor to get things straight for you. But finding a suitable professional is a very tough job, and one must be certain about what you need to do exactly. If your job requirement is very particular, like building a deck or installing a hot tub, you may need a contractor who is a specialist in that particular area or field, such as a carpenter or a plumber. However, if you decide to go on with an even bigger project for your house or workplace, for instance, a remolding of an area, adding a double-story, then employing a general contractor would be the best choice for you.
Why should you hire a general contractor when work is done by subcontractors?
This is where the hustle starts – who to reach, the contractors, or subcontractors. Where does the difference lie? General contractors are like masterminds. They stick with you throughout the project, starting from planning to end product, unlike the subcontractors. They are experts in specific areas of the construction phase, such as plumbing, carpentry, equipment operation, electricity, and concrete formulation. They get their hands involved in a particular work and wave goodbye when they are finished with their job. Subcontractors are part of the big project. In comparison, the general contractor constructs the “big picture”. They know the industry and use his or her knowledge and organizational skills to bring together the best subcontractors.

How do I deal with a general contractor?
Here are several quick steps to stay at the top of the project and maintaining secure communication with your contractor and construction team.
1. Pay only for complete work
2. Check the work
3. Good communication
4. Track all changes in writing
5. Avoid allowances
6. Keep a project journal
7. Be a good customer

What is the average cost of hiring a general contractor?
General Contractors would price their services as 10% to 20% of the total construction cost of your project. However, if the project is bigger, they might charge near about 25% of the total project cost. General contractors do not have an hourly charge rate.
There is no exact rate for the general contractors because of the pay rate changes with location and industry. It varies with every company also. Normally, contractors charge for their services in between $250 - $58, 000. Usually, the more proficient they are, the higher they charge.

Seven things that are important before hiring a contractor
1. You must know what you want:
Before you talk with your contractor, make sure you know your goals for the project. What, how, and when you want it are a few questions that must be answered in your mind. If you don’t know how to convey and translate your ideas or specific features, you must hire a design consultant that can offer that service.
2. Get bids from several contractors:
You should have a minimum of three bids that can be considered before hiring a general contractor, but nearly half a dozen will provide a clear picture of how the different companies compare against each other. At the same time, you will have an idea of the services each company offers as well as any special discounts.
3. You must check backgrounds:
You should do some research about them yourself, even when one of your family members recommended you a contractor. Obtain the full name of the company, their address, and remember to check that the firm has a current state license and adequate insurance coverage (with at least a million-dollar in commitment). Get license and policy numbers, then remember to clarify then they are real or not. Check if there are any problems with the company and if formal complaints or legal actions have occurred in the past or are in the pending situation.
4. Investigate a contractor's work history and work habits:
Many contractors are specialists, and many of them are general contractors, so you must make sure their expertise or talent that is necessary and suitable for the project. Take time to see their work sample firsthand and look for four things: one is a similarity to your project, second is quality material, third is workmanship, and fourth is consistent client satisfaction.
5. You must know what you will be paying for:
Research proves that everyone loves the free estimate, but contractors will likely prepare a scope of work proposal if project price increases. Typically says when the project will end and breakdown the job budget into line-item costs for labor, material fees, and so on.
6. You must have a proper plan to solve the problem:
Any contractor you hire will become a part of your life, or at least for the project's duration. Make sure you will choose someone who can deliver trustworthy and consistent communication. During initial meetings, ask how different issues can be resolved. Contract documents may include project manuals, drawings, including supplementary or special conditions.
7. Be aware of the contract details:
The contract should contain start or end date, information on building permits and fees, a description of what products and services are to be provided by the contractor, payment terms, subcontractor issues, such as a warranty for workmanship, and insurance verification such as a license.

What projects should I hire a general contractor for?
Depending on the experience and area of expertise, general contractors can work on the following projects:
• Commercial and residential building construction
• Additions and remodels
• Multiplex HVAC
• Complicated electrical work
• Tricky plumbing
• Concrete work

How much do contractors charge for the estimate – is it free?
Contractors may or may not charge for an estimate depending on the project type – so, the estimate can be free of cost, or they might charge around $50 to $1,000. For instance, if you want them to inspect or need design consultation, then be prepared to pay the price of their services.

Types of Contracts
There are 5 major contract types that you may run into when hiring a general contractor:

1. Lump-Sum or Fixed Price Contract
A fixed price or lump-sum is a type of contract in which everything related to construction and all related activities takes place under a fixed total price contract. Lump-sum contracts are preferred in projects where there is a clear-cut view of the work required, and a smooth schedule is accepted. When drawing up a lump-sum contract, you must take into consideration every aspect that can affect the overall cost of the project. Since there is a very constricted pathway according to price, unpredictable setbacks or variations during the project can affect its completion. Because of this, lump-sum contracts are favored for smaller projects with an expected extent of work.

2. Cost Plus Contracts
Cost-plus contracts cover:
• Original cost
• Purchase cost
• Other expenses incurred from the construction work
These contracts include the amount the owner gives to the contractor as the budget for the project and with that a fixed amount of profit, which is usually calculated by the percentage of the overall price of the project.
The cost which comes under the cost-plus contract implies direct cost (i.e., material and direct labor), indirect cost (i.e., communication cost, space, and travel), and profit (i.e., the negotiated upon markup and fee).

3. Time and Materials Contracts
Time and material contracts are the opposite of the lump-sum contracts because they are favorable for the projects with unpredictable budgets, and the amount of work is not defined. Such contracts pay back contractors for the price of materials and develop a daily or hourly pay rate.

4. Unit Price Contracts
Unit Price contracts are such types of contracts in which the entire project is split into smaller units. The contractor gives the owner an estimate price for every individual unit, rather than for the whole project.

5. GMP Contracts
GMP, or Guaranteed Maximum Price contracts, create a fixed amount of price to be used for the project, and if anything goes out of the budget, the owner would have to pay for it. Sometimes, the GMP contract is also integrated with other contract types, such as with a cost-plus contract to confine the total cost.

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