Home renovation spending is on the rise, with the U.S. market alone shelling out more than $400 billion annually on home repairs and upgrades. And a recent study found that 9 out of 10 homeowners have plans to remodel their homes at some point in the future.
With all this building going on, good help is increasingly harder to find—which is a huge problem for homeowners spending anywhere from $18,453 to $74,990 on multi-room remodels.
When you’re dropping that kind of cash on a major renovation to your most valuable asset, you need to know that the job is going to be done right. If it’s not, it’ll cost you in more ways than one.
“The wrong general contractor could actually hurt your home sale, especially if they do shoddy work, or poor management leads to endless delays,” advises Monica Graves, an investor-friendly agent in Denver, Colorado, who has a Certified Residential Specialist (CRS) certification and ranks among the top 1% of brokers nationally.
So, how do you avoid starring in a home improvement horror story?
By hiring the right laborers for the job with the skills to do the work you need done. That right worker may or may not need to be a general contractor, depending on the size and scope of the renovation.
What does a general contractor do?
A general contractor is basically the boss of the jobsite.
“General contractors, or GCs as we call them, have a crew of builders who can do multiple types of projects within your home,” says Graves. “For more complicated projects, they’ll hire out the work to say an electrician, or a plumber.”
As the home improvement project leader, your GC will:
- Crunch the budget numbers
- Pull the permits
- Set the project deadlines
- Schedule the crew
- Order building supplies
- Hire the subcontractors
- Do anything else that needs to be done for their crew to complete the job
How much does it cost to hire a general contractor?
Pinpointing how much it costs to hire a general contractor is tricky, because projects big enough to need a GC typically wrap labor costs into the overall project budget.
So, if you hire a construction company at $60,000 for a kitchen remodel, your GC’s salary will be included in that figure, along with the cost of hiring the crew, buying building materials, and so on.
How much of that proposed budget goes to the GC depends on how much of the work they’ll be doing themselves. If they’re simply project managers, they’ll probably receive 10% to 20% of the total budget for their work. If they’ll be doing any of the construction themselves, that total may be closer to 45% of the total budget.
On average, you can figure on paying your contractor around $300 to $400 per day.
Of course, hiring a GC and their crew isn’t the only way to get work done around your house. When you’ve only got a handful of smaller jobs, hiring a handyman who charges by the hour may be more affordable—especially if all the work can be completed in one day.
The hourly rate charged by handymen averages out to $83 nationally, with some paid as little as $50 per hour, and others $100 or hourly. Other handymen charge by the job rather than hourly, so check their rates first.
Handymen’s rates may rise depending on their licensing and specialties. For example, one who’s also a skilled plumber or electrician will charge more per hour than one who won’t do plumbing or electrical work.
Whether you hire a GC or a handyman, always check your state’s licensing and registration requirements before they start work on your house. Otherwise, you may be forced to pay fines if you hire an unlicensed or unregistered GC in a state that requires it.
Do I need a general contractor?
Whether you need to hire a general contractor all depends on what work you need done in order to get your house ready to sell.
If all you need are a few minor fixes, like new cabinet pulls installed, or a few holes patched in your walls, then it’s more cost effective to hire a less-expensive handyman.
“The main difference between a general contractor and a handyman is that a handyman might do a lot of the work themselves, whereas general contractors operate more like managers, so they’ve probably got a crew of workers who’ll be doing a lot of the work at once,” says Graves.
“I would definitely hire a general contractor for big projects, like finishing a basement, or projects that involve plumbing, or electrical work. Because bad plumbing can lead to mold, and bad wiring can cause fires.”
However, it may be wise to bypass hiring a general contractor if you only need one or two specialty jobs done, such as painting interiors, installing a new toilet, or replacing light fixtures.
While the paint job could be handled by a GC’s crew, plumbing and electrical work is often subcontracted out to licensed plumbers and electricians. If you’re not having extensive remodeling done in addition to those specialty projects, you’ll just be paying the GC to act as the middleman to hire specialists you could’ve hired yourself directly.
Just remember that you get what you pay for.
If you try to hire a handyman to complete a big job just because it’s cheaper than hiring a GC and their crew, you may wind up with one of those construction disasters that can actually decrease your home’s value.
Is a general contractor worth the money?
Again, it depends on the project. If it’s a big job, you’ll definitely need more than one work hand to get the project done in a timely manner.
Plus, the government usually wants some oversight on major renovations, which means you need someone who knows how to get the right permits for your project.
“In our state, permits vary by county, so general contractors need to know how pull permits in many different counties,” says Graves.
“You don’t want to hire someone who comes into your house and does work without pulling permits, because it’ll be very hard to sell that home again. If the government didn’t approve the work you had done, your buyer’s inspector will find out, and it’ll cost you thousands to correct it.”
How do I find a good general contractor?
Hiring the wrong GC could cost you in more ways than one.
Poor project management could lead to your project missing deadlines and going over budget. Permitting mistakes could result in unauthorized work that’ll need to be redone before you sell. A shifty GC could hire cheap, unskilled laborers that damage your home, or deliver poor-quality workmanship.
And perhaps worst of all, a crooked GC could simply charge half of the project budget upfront and run, without ever completing any work at all.
So how do you avoid having your house ruined or getting ripped off? You need to ask for recommendations from anyone you know who’s recently had work done by a reliable general contractor.
The first place to start is by asking the top-notch agent you hired to help you sell your house. But don’t just ask for one name, ask for a whole list of potential GCs.
“I would say it’s very important to utilize your real estate agent to get several different GC referrals, because they’ll have relationships with multiple contractors who have good reputations,” advises graves.
“GCs are busy, so you need multiple options if you want to find one that you’re comfortable working with and who’s in between jobs when you need them.”
Finding one who’s available is just the first step. You also need a GC that you click with so that all communication is clear and concise.
Plus, you need to get multiple bids, as each GC may have different ideas and resources that could reduce or add to the overall budget.
For example, the first general contractor who submits a bid might budget for the exact marble countertop you want at $150 per square foot.
However, the second GC can get you granite with similar coloring at just $35 per square foot—because it’s leftover from a new build development project he’s just completed.
The third GC’s bid includes a darker, but less expensive marble option at just $80 per square foot—because he’s buying in bulk at wholesale prices for multiple projects.
Since you’re planning on selling, there’s no need to get your dream marble installed by GC #1. The decision between GC’s #2 and #3 all depends on your home’s price point. If yours is a midrange home, the inexpensive granite is all you need. If you’re putting new countertops in the kitchen of a luxury home, then marble may be the way to go.
An agent will know the buyer trends and the market data analysis to help you decide which choice is right for you.
It’s never pleasant to spend money on a house you’re selling, but you’ll feel ten times worse about forking over that cash if the work isn’t done well or right.
Hiring a general contractor to oversee a big job can help you keep the project on time and under budget—as long as you hire the right GC for the job with a little assistance from your agent.
Header Image Source: (PhuShutter/ Shutterstock)