Future Home Build - Hire a GC?

[Pettrix]

Anyone here do a custom home build and NOT hire a GC to oversee the project? I've heard horror stories from both sides; those that hire a GC and those that don't hire a GC.

I'm open to hear the pros and cons of each based on real-life experiences...

 

[rtimgray]

I have a very, very low opinion of contractors in general, and general contractors in particular. I have built my house from the ground up - actually ground down to the basement, then back up (ha-ha). The only things that I didn't do with the original house construction was the septic system (my backhoe couldn't dig as need as was needed) and fabricating the ductwork/hooking up the refrigerant lines. I am currently working on an addition to the house and this time I'm doing the ductwork myself (no need to do anything to the septic system). Most of the reason that I did the work this way was because of past experiences with contractors.

Having said that, I know that there are good, reputable contractors and general contractors out there. I would think that the advantage of a General Contractor for your home would be "one stop shopping" - you only have one point of contact, you don't worry about when specific things and people are showing up. You also don't have to get into a mess if the plumber busts some tile while he's installing a toilet or the electrician messes up drywall hanging a fixture - the GC does all of that (or should).

The downside, in my opinion, would be the cost. All of the subtrades are already going to mark-up materials at least 15%-20%, plus their labor, and the GC is going to take that and add 15%-20%, so you will pay a great deal more for the same work being done - but you don't have to worry about it. Theoretically, a GC would have more clout with their sub-contractors, so work should be very good and timely, but we all know that this is not necessarily the case.

I would boil it down to the following: How much money do you have? How much time do you have? What is your tolerance for stress? What is your knowledge of various building systems and mechanical systems in a house (i.e. can you spot shoddy workmanship). Are you familiar with scheduling work from various contractors and then dealing with the various problems that will arise from missed deadlines? Are permits/inspections/certifications required and can you do those yourself or will you have to have someone else do them?

There is absolutely nothing wrong with using a GC, and I'm sure there are lots of good ones or else there wouldn't be a market for them. I just feel that the cost of constructing houses is absolutely ridiculous when using the services of a GC and (personally) would never pay for them. However, not everyone has the amount of time to spend on a project that I can devote to it, and if I were in the same position, I too would probably lean towards a GC.

If you do go the route of the GC, I would recommend documenting everything that you want done in the house, including specific fixtures, floor coverings, windows, etc. to the Nth degree. Everything will be much cheaper and easier if it's specified up front rather than a change order later.

Whatever you decide, I wish you good luck. Take care.

 

[paulharvey]

I don't believe you will save money by avoiding using a GC unless you are able to do a significant amount of the work yourself. If you plan on hiring a lot of subs, I don't see it.

A subcontractor will give a better price to a GC than to a private party because they know they wont get jerked around, they know it will be ready when they are called, and that the GC will have at least a basic understanding of the trade.

What is your level of experience in building/construction?

Contractors will have a relationship with inspectors, and know what they want in your specific area.

 

[Gary Fowler]

When I built my house, I hired a contractor locally that had a good reputation and worked closely with me to build it. He gave me a quoted price with allowances he made for each activity. I could then specify different materials or buy them myself which I did for a lot of the items. He recommended subcontractor that he had used previously for plumbing (have to have a licensed plumber for the water lines and sewer), HVAC & drywall installers. Everything else he did himself. I bought all the windows, bathroom fixtures, ceiling fans and all the kitchen appliances so there was no markup on those. Every thing that I bought he deducted the allowance from his total price. I went way over priced on kitchen appliances but wife wanted the best of those, but I got my windows and doors cheaper than the budget. I also was able to make small changes and additions for reasonable cost like adding concrete parking pad in front of garage, sidewalks and steps down an hill plus choice of cabinet material and custom design. I didn't have the time to spend watching the build 100% of the time so a general contractor was my only option.
If you get one that allows you to do as much of the buying and other things that you consider yourself qualified to do, then that is the best way to go. I would not hire a GC that just subs out everything from concrete work, framing, roofing etc. and then charges you a 15% or more mark up just to watch them build. The GC should be a licensed and bonded builder himself and do most of the work while subbing out specialty work like plumbing and HVAC work, drywall (specialty dry wall installers can do it faster and cheaper than you can do it your self) and perhaps a few other items, but most of the work would be done by the GC. His quote should include specific prices for all the items in the build (plumbing, electrical, HVAC-including size of unit, framing, slab and concrete work, any appliances that he furnishes (also what he doesn't furnish), roofing and type, windows and doors plus type specified in his quote.
Go over all the quote in deep detail and discuss any changes you want prior to signing the contract. Specify what you are allowed to purchase or choose yourself if you wish. This is very important and can save you thousands in markup if you can do some of this yourself. You will have to invest a lot of your time to pick out materials and appliances plus paint colors etc in any case unless you want to buy a tract home that is done to someone else's taste so all you have to do is put the key in the door and walk in. Personally I would never buy a Tract build home that is cookie cutter built in a sub-division with 1000 others just like it.
I designed my house myself and spec'ed out everything in it (wife had a little input- it had to be mostly just like she wanted it) and I am quite happy with the results.
PS: Since we both have allergies, we have no carpet, all hardwood and stone flooring. That is something to consider.

 

[wedge40]

If it were me I'd read what Eddiewalker says in his reply. Hasn't replied yet, but when it come this kind of stuff he seems to have a lot knowlege of these things.

 

[grsthegreat]

I used to be a general contractor..in my younger and more foolish days, but nowdays im simply an electrical contractor.

Ive seen both sides of the coin. There are many folks out there that know enough about construction that they could definitely build their own house and never require a general contractor to oversee the work. And there are a great many people that THINK they could build their own home but dont have the slightest idea how to go about it. They think they could just pull out the local penny saver/nickles worth and construct a house on their own. Most are in for a rude awakening.

First off many subcontractors (electrical, plumbing, etc) are leary of working foir a one time homeowner/builder and may inflate their bids accordingly. Im one of those. These builders generally have no idea how to schedule in workers/tradesmen and have unreasonable timelines in their heads as to how long a job can take.

Also, as a tradesman i give preference as to my work schedule to contractors that give me alot of work over a one time builder that will never call me for work again. I have to keep my CLIENTS happy. I also KNOW that my long time client will pay me on time...without any hassles. I dont know that the homeowner will (and i have good reasons for this after 30 years in the trade).

As to markups on materials...yes we do that. And theres a reason. This markup helps defer the cost of 1-2 years of free warranty work that is to come, plus the repeated free runs out to the job for meetings, walkthrus, etc. It also pays me for my free trips to the supply house to get materials and the fact that I have to cover all the costs and pay for all the materials...and sit on the bills until i get paid for the work. This 15% markup covers all that.

You dont expect a store not to charge a markup do you?

The general contractor also has these expenses. He pays his subs out of his pockets and waits for reimbursement. Hes responsible for 1-2 years of warranty return trips to the house to take care of issue that arise, etc. When i was a general contractor, i did some heavy accounting work to trace these expenses, and found that 15% didnt even come close to covering it. I had to cover construction insurance, liability insurance, work comp insurance, advertising, transportation, delivery costs, cleanup costs, time spent on phone every night scheduling and taking care of problems, job site meetings, and on and on.

Now for the OP.. if you do have experience in the construction trades and have been around any new construction...then do it yourself. If all youve done is watch the DIY network shows....then be very afraid.......and hire some help.

Some cities even have retired contractors that can be hired out to assist the do it yourselfer...ask around

good luck

 

[JRobyn]

I may be delusional, but on our build, I feel like I got the best of all options. I hired the "premier" local builder/GC to frame and dry in the house for a fixed, quoted price. Then I took it from there. We are almost finished! This did require a lot of convincing of the builder, since he did NOT usually work this way and was quite skeptical of my abilities to ever finish. He brought in two of his best framing crews, and they really ripped along quickly. As we found, no matter how good your plans/architect are, there are inevitably numerous "issues" that come up. The highly experienced builder and his crews very smoothly handled all of these. Because I now had a good relationship with the builder, I had access to all of his subs for things like sheetrock, tile, paint, etc., and those subs were willing to work for me because they knew that the basic build quality of the structure was there. It also probably helped that the builder would vouch for me as being someone who had a clue what they were doing, and would promptly PAY. It also helped a LOT that almost all of the subs we hired did superb quality work. I took this to be a function of their stature as established subs for the "premier" builder, plus the local area has a very good work ethic.

As has been noted, if you do something like we did, it will be very important to clearly document/communicate exactly what is expected from all parties involved for each and every piece of work.

If I was to do it all over again, I would do it exactly the same way. It has been a long road (my finishing work is slow), but very enjoyable, and it is extremely satisfying to know that my wife and I did roughly half or more of the work. My hunch (delusion?) is that we saved maybe 20-30% over what we would have spent had we just had the builder do it all. And everything in the house is EXACTLY the way we want it. Even the light switches I had to move and the pantry door that I had to reverse the hand!

Good luck with whichever path you chose!

- Jay

 

[paulharvey]

There's more to it than calling three concrete guys for bids on the slab. Have you ever written a scope of work. Concrete guy shows up and tells you the slab isn't graded right, and you need to call the house pad guy back... can you tell if concrete guy is right? Cause I pretty much guarantee the house pad guy thinks its right, and he's already got his money (your money). Electrical says power to AC is on the AC guy, AC guy says he cant legally do it (hope your scope of work says who will do it).

Its not all bad, but even buying materials... do you think CEMEX is going to sell you concrete cheaper than the guy who buys 2000+ cy per year?

On the other side, there are general contractors who do very little for there mark up, and don't supervise their subs, and do crap work as well.

If you have a strong background in one or more trades, you might consider hiring a "shell contractor" who builds pad, pours concrete, frames(or lays) the walls, roof trusses, and sheeting. Then get roofer, and hiring individual trades out.

 

[jk96]

I am currently in the middle of my second one I've done myself. The cost saving will likely depend on the type of home you are building. On a high end custom home the cost savings can be pretty significant but probably not so much if any on a typical slab home. We could not build the home we are building now if we were going to turn-key the project through a GC. Acting as our own GC and doing a lot of the work ourselves is the only way we could build our current home within budget.

From my own experience if you plan on doing it yourself you need to have good understanding of most aspects of the construction process and plan to devote a lot of time to the build. There is a lot more to it than just getting bids and letting the subs take it from there. You really have to be there every single day. We would have some major issues with the house already had I not been around to supervise each day. You can also expect a lot of delays as many of your subs work with builders and their priority if needed will be to them and not you.

The other word of advise I could give would be to remember that you are the boss and don't be afraid to act like one. Your going to be working quite a bit with some of your subs and don't let any type of friendship or relationship get in the way of the build. If something is not right or doesn't look right then let it be known and don't feel bad about making someone correct work that needs corrected. You can and should have a good relationship with your subs, but at the end of the day you are going to be living in and paying for your house for years, they are simply moving on to the next job.

For me personally now that we are part way through my second home as a GC I would not do it any other way as long as I had the needed time to devote to the build. I work for myself and scheduled the build during my slowest part of the year. If I was working a 9-5 job that didn't allow me the flexibility that I have I would hire a GC.

Jeremy

 

[sseelhoff]

We have done it both ways. On our first build, we used a GC. It was a painful process. On the second build, we hired a construction manager, not a GC. We contracted with the subs directly, and the Construction Manager was on site to address issues, and served as a coordinator. The second build was smooth and quick.