Building a House - To Hire a Home Builder or General Contractor?

When building a house, there are two main options: Hiring a home builder or a general contractor. Each comes with its pros, cons, expertise, and skills. You should consider who to hire depending on your needs.

Home builders specialize in custom homes, while general contractors manage a team of subcontractors with diverse skills to complete the project. It seems both experts can complete the job, but there are some caveats that you need to consider.

Hiring a Home Builder
Pros:

  • Specializes in constructing custom homes, capable of completing the project from start to finish independently.
  • Offers comprehensive support throughout the project, from planning the design to coordinating with an architect, handling permitting, and helping you set a budget.
  • Maintains pre-established relationships with other professionals, like architects, prepared to address any additional needs.
  • Ensures your project stays on budget and schedule.

Cons:

  • Potentially more expensive than hiring a general contractor.

Hiring a General Contractor
Pros:

  • Collaborates with you to execute your project.
  • Manages a team of subcontractors, assisting with diverse types of construction projects in your home.
  • Possibly less expensive than hiring a home builder.

Cons:

  • Might not specialize in building custom homes.
  • May be unable to complete the project from start to finish independently.
  • Possibly lacks pre-established relationships with other specialists, like architects.

You can build your new home with a home builder and a general contractor. But which of the two is the right choice? 
Is there a difference between a builder and a contractor? How contractors and builders can do the same task, and why people mistake one for another. Building a new home, it is an exciting endeavor that allows you to create a space tailored to your unique needs and preferences. However, before embarking on a home building process, it is crucial to understand the roles and responsibilities of a general contractor and a custom home builder from start to finish.

A general contractor provides any construction services, oversees the construction process, coordinates and subcontracts various tradespeople, and ensures a project is completed within a given timeline and set budget. Unlike general contractor, custom home builder specializes in new home construction according to the homeowner’s specifications. Some builders help are help with home design along with the construction of your home.

While both options have pros and cons, it is essential to consider factors such as budget, timeline, and level of involvement when deciding whether to hire a general contractor or a custom home builder. Alternatively, some individuals may opt for a DIY approach, taking on the construction process themselves.

This article will explore the differences between these options, enabling you to make an informed decision about building your dream home.

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George Nicola

George is a seasoned interior designer and property marketing strategist with over 13 years of experience. He specializes in transforming properties into visually stunning spaces, helping clients recognize the potential and beauty in each property. With an impressive international client base of exciting projects throughout Europe and America.

Table of Contents

General Contractors Definition

The role of a general contractor in building a home involves managing a team of subcontractors.

They oversee and coordinate the work of various specialized tradespeople, such as electricians, plumbers, and carpenters, to ensure the project is completed on time and according to specifications.

General contractors are tasked with executing project plans created by external specialists, such as architects and engineers, ensuring that all aspects of the construction process are carried out correctly and efficiently.

Is builder the same as developer?

A builder and a developer are not the same, even though their responsibilities in the construction industry may sometimes overlap. A builder typically focuses on the construction of buildings, while a developer focuses on acquiring land and developing it for sale or lease.

A developer takes raw land, obtains the necessary permits, creates building lots, and puts in the sewers, water and electric lines, streets, and curbs. Then the builder comes in to engage in the actual construction of the building.

It is important to note that, in some cases, a builder may also act as a developer. Nevertheless, building and developing are two distinct tasks; each professional serves a specific role within the industry.

What does a general contractor do

Comparing home builder and general contractor for building a new home.
Play Video about Comparing home builder and general contractor for building a new home.

A general contractor is responsible for managing and overseeing the entire construction process, all aspects of the project and ensuring that it is completed on time and within budget.

General contractor’s extensive knowledge and experience in the construction industry, play a crucial role in the successful execution of a home building project.

Their key responsibilities include:

  • Coordinating subcontractors and suppliers: General contractors are responsible for hiring and managing subcontractors and suppliers, ensuring that they deliver high-quality work and materials.

  • Obtaining necessary permits and licenses: General contractors handle all the paperwork and bureaucratic processes required to obtain the necessary permits and licenses for the construction project.

  • Managing project timelines and budgets: General contractors create detailed project schedules, monitor progress, and ensure that the project stays within the allocated budget.

By effectively managing these responsibilities, general contractors provide a streamlined and efficient construction process, resulting in a well-built and innovative home.

Pros and Cons of Hiring a General Contractor

Key Considerations: Hiring a General Contractor

Hiring a General Contractor for your home building project can have both its advantages and disadvantages.

Benefits
Project Management Expertise: General Contractors bring a wealth of experience to the table, ensuring efficient and well-coordinated projects.

Diverse Skills: Their wide-ranging skills allow them to oversee various project aspects, from carpentry to electrical work.

Permit Acquisition: They expertly handle the complex process of obtaining required permits, saving you time and maintaining compliance.

Drawbacks
Additional Costs: General Contractors might hire external specialists for certain tasks, which could increase your overall expenses.

Coordination Complexity: Managing multiple professionals could introduce complications and potentially delay the project.

Subcontractor Dependence: Relying on subcontractors might lead to communication challenges and impact quality control.

Before taking a decision, carefully weigh these factors. Remember, judiciously choosing between a home builder and a General Contractor can significantly impact your project’s success.

Custom Home Builders Definition

Some builder contractors are professionals who specialize in building homes specifically designed to meet individual clients’ unique needs and preferences. They have extensive experience and expertise in constructing one-of-a-kind homes and can bring their client’s visions to life.

In addition, these builders have the capability to complete entire projects with their in-house team, which ensures seamless coordination and efficient execution of all aspects of the construction process.

Building or renovating your home with a home builder.
Building or renovating your home with a home builder.

Specialization in building custom homes

Specializing in the construction of custom homes allows builders to create unique and personalized spaces that evoke a strong emotional connection with homeowners.

These builders have the expertise and experience to bring innovative ideas to life, delivering homes that meet their clients’ specific needs and desires. Their attention to detail ensures that every aspect of the home is carefully considered and executed.

When building custom homes, specialized builders possess the following traits:

  1. Imagination: They have a creative mindset that enables them to envision unique designs and incorporate innovative features into the homes they build.
  2. Craftsmanship: These builders deeply understand construction techniques and materials, allowing them to create high-quality, durable homes that stand the test of time.
  3. Collaboration: They work closely with homeowners, architects, and designers to ensure that the final product reflects the client’s vision while incorporating the latest trends and technologies.

By specializing in custom homes, builders can provide homeowners with spaces that meet their functional needs and inspire and delight with their innovative design elements.

Completing entire projects with their in-house team

Completing entire tasks with their in-house team allows builders to maintain quality control and streamline the construction process, resulting in a seamless and efficient experience for homeowners.

By having an in-house team, builders can ensure that every aspect of the project is closely monitored and executed to the highest standards. This level of control allows for greater attention to detail and the ability to address any issues promptly.

Having a dedicated team of professionals familiar with the builder’s processes and methodologies enhances communication and collaboration, leading to better coordination and faster decision-making.

Furthermore, an in-house team enables builders to implement innovative construction techniques and technologies more easily, as they readily have the necessary expertise and resources.

Completing projects with an in-house team assures homeowners of a well-executed and forward-thinking construction process.

Four general contractors analyzing blueprints for a building project.
Four general contractors analyzing blueprints for a building project.

What does a Home Builders do

One of the primary duties of a home builder is overseeing the construction process and ensuring that all aspects of the project adhere to the specified plans and regulations.

Home builders are crucial in managing the construction timeline, coordinating with subcontractors, and ensuring the project is completed within budget.

They are responsible for obtaining all necessary permits and ensuring that the construction site complies with building codes and regulations.

Home builders are tasked with conducting regular inspections to ensure the quality and safety of the work being done.

They possess extensive knowledge and experience in various construction techniques, materials, and technologies, allowing them to make informed decisions and implement innovative solutions.

This expertise enables home builders to deliver high-quality homes that meet the expectations of their clients while incorporating the latest advancements in the construction industry.

Pros and Cons of Hiring a Custom Home Builder

A team of construction workers inspecting a construction site with clipboards.
A team of general contractors workers inspecting a construction site.

When considering the pros and cons of hiring a custom home builder, it is important to note that one of the advantages is the opportunity for in-person service, which allows for direct communication and increased accountability.

Custom home builders often have an in-house team of experts who can provide specialized knowledge and skills throughout the construction process, leading to a smoother and more efficient project.

On the other hand, a potential drawback of hiring a custom home builder is that they may not handle permitting tasks, which could add an additional layer of complexity and responsibility for the homeowner.

The project scope may be limited when working with a custom home builder, as they may have a specific niche or expertise that may not align with the homeowner’s vision.

Pros: In-person service, in-house team, fewer subcontractors

In-person service provided by home builders and general contractors allows for direct communication and immediate feedback, ensuring a smooth construction process.

When working with a custom home builder or general contractor, clients benefit from their physical presence throughout the project. This enables face-to-face discussions, which can be more effective in conveying ideas and resolving issues promptly.

Having an in-house team of experts allows for better coordination and integration of various aspects of the construction process.

With fewer subcontractors involved, the project can be more streamlined, reducing the risk of miscommunication or delays.

This direct approach also fosters a stronger client-builder relationship, as clients can witness the progress firsthand and provide real-time input. Ultimately, the in-person service provided by home builders and general contractors enhances collaboration and ensures a more efficient and satisfactory outcome.

Two men, one a home builder and the other a general contractor, standing in front of wood framing for a building.
Two men, one a home builder and the other a general contractor, standing in front of wood framing for a building.

Cons: May not handle permitting tasks, limited project scope

While there are advantages to working with a home builder or general contractor, it is important to consider that they may not handle permitting tasks, which can add complexity and potential delays to the construction process.

Permitting tasks involve obtaining the necessary approvals and permits from local authorities for the construction project. This includes ensuring compliance with building codes, zoning regulations, and other legal requirements.

By not taking on this responsibility, home builders or general contractors may leave it up to the homeowner to navigate through the intricacies of the permitting process. This can be time-consuming and may require the homeowner to familiarize themselves with local regulations.

Any errors or delays in obtaining permits could result in costly consequences, such as fines or even having to redo certain aspects of the construction.

It is crucial for those considering building their own home to thoroughly evaluate whether their chosen home builder or general contractor will handle permitting tasks or if they will need to assume this responsibility themselves.

Which to Hire to build your home a builder or a general contractor?

When it comes to building your own home, it is important to assess your needs before deciding whether to hire a custom home builder or a general contractor.

Assessing your needs involves considering factors such as the size and complexity of the project, your budget, and your desired level of customization.

A construction worker holding a helmet in the middle of a new house construction.
A construction worker holding a helmet in the middle of a new house construction.

For larger home building projects, hiring a custom home builder can offer several advantages, such as their expertise in handling complex designs and their ability to provide a high level of customization.

However, in some cases, both a general contractor and a home builder may be utilized, with the general contractor overseeing the overall project and the home builder focusing on the specific construction of the home.

Assessing Your Needs

A general contractor measuring a wall during building.
A general contractor measuring a wall during building.

One important aspect to consider when building your own home is assessing your needs. This step is crucial in ensuring that your new home meets all your requirements and preferences. To assist you in this process, here are three key items to consider:

  1. Lifestyle: Consider your daily routine, hobbies, and activities. Do you need a dedicated space for a home office or a gym? Are you an avid cook who requires a spacious and well-equipped kitchen? Understanding your lifestyle will help determine the layout and features of your new home.

  2. Future Plans: Think about your long-term goals and how they may impact your home. Are you planning to expand your family or accommodate aging parents? Consider the need for additional bedrooms, bathrooms, or accessibility features.

  3. Technology Integration: With the rapid advancement of technology, incorporating innovative features into your home can enhance convenience and efficiency. Think about smart home automation, energy-efficient appliances, and sustainable building materials.

By carefully assessing your needs, you can create a home that aligns with your lifestyle, accommodates future plans, and integrates cutting-edge technology.

Advantages of Hiring a Custom Home Builder for Larger Home Building Projects

A custom home builder brings expertise and specialized knowledge to larger home building projects, ensuring efficient execution and attention to detail. When undertaking a larger home building project, hiring a custom home builder can offer several advantages.

Firstly, custom home builders have extensive experience in managing complex construction processes, allowing them to navigate potential obstacles and ensure smooth project execution.

They are well-versed in the latest construction techniques, materials, and technologies, enabling them to deliver innovative and cutting-edge designs.

Custom home builders have established relationships with suppliers and subcontractors, ensuring access to high-quality materials and skilled labor. This can result in cost savings and a streamlined construction timeline.

Home builders prioritize personalized service, working closely with clients to understand their unique vision and preferences, and translating them into a tailor-made home.

Hiring a custom home builder for larger home building projects offers expertise, innovation, and attention to detail, resulting in a high-quality and customized living space.

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Disadvantages of Hiring a Custom Home Builder for Larger Home Building Projects

If you can accept the higher costs and uncertainty, a custom build may be worth it to get your dream home exactly how you want it. But weigh the drawbacks carefully for larger projects.

Here are some potential disadvantages of hiring a custom home builder for larger home building projects:

  • Higher costs – Custom builders charge more compared to production builders or doing it yourself. All the customized features, design work, and labor can add up.
  • Delayed timeline – Working with an architect to customize plans from scratch, getting permits, sourcing specialized materials – all this can require more time versus buying a spec home.
  • Limitations on resale – Highly customized homes cater to your tastes but might be harder to sell later if future buyers don’t value the same features.
  • Lack of economies of scale – A production builder that repeatedly builds similar model homes can operate more efficiently. A one-off custom build won’t have those cost savings.
  • Builder inexperience – If the builder specializes in smaller projects, they may misjudge the scope and scale of a larger custom home during the planning stages.
  • Builder-driven design – Some custom builders push back on design ideas they think will be unfeasible or too expensive. You may have to compromise.
  • Investments upfront – Expect to pay significant sums for the design, permits, site prep before construction even starts. Cash flow management is key.
  • Risk of delays – Unforeseen issues, subcontractor problems, weather events or other hiccups can slow down the building schedule.

When Both a General Contractor and a Home Builder Are Utilized

Utilizing both a general contractor and a home builder can result in a seamless collaboration between construction management and specialized expertise, leading to a harmonious and efficient construction process.

This approach allows for the best of both worlds, as the general contractor oversees the overall project management, while the home builder brings their specialized skills and knowledge to specific aspects of the construction.

The advantages of this collaboration are numerous:

  • Enhanced project coordination: With both a general contractor and a home builder on board, there is improved coordination between different trades and subcontractors, ensuring that the project progresses smoothly.

  • Expertise in multiple areas: The general contractor’s broad knowledge of construction management is complemented by the home builder’s expertise in specific areas, such as foundation work or interior finishes.

  • Efficient problem-solving: When faced with challenges or unexpected issues, the combined experience of both professionals allows for quick and effective problem-solving, minimizing delays and maintaining project momentum.

By combining the strengths of a general contractor and a home builder, homeowners can benefit from a construction process that is innovative, efficient, and ultimately results in the realization of their dream home.

DIY Construction - An Alternative Approach

A client and two construction workers discussing building a home with a wooden frame.
A client and two construction workers discussing building a home with a wooden frame.

DIY construction is an alternative approach to building your own home that involves taking on the role of the contractor yourself. This approach has both pros and cons.

On the one hand, being your own contractor allows for greater control over the project and can potentially save money. However, it also requires a significant amount of time, knowledge, and organizational skills to successfully manage all aspects of the construction process.

For those considering DIY construction, it is recommended to thoroughly research and educate oneself on the various tasks involved, seek expert advice when needed, and carefully consider whether the benefits outweigh the challenges.

Pros and Cons of Being Your Own Contractor

When considering whether to be your own contractor in building your own home, there are several pros and cons to consider.

One of the main advantages is the potential for cost savings, as you can avoid paying a general contractor’s fee.

Additionally, being your own contractor gives you full control over the project, allowing you to make decisions and changes as you see fit.

However, there are also drawbacks to this approach, such as the lack of experience in managing a construction project and the potential challenges of handling permits and regulations.

Another important factor to consider is the task of hiring and managing the right team of subcontractors, which can be time-consuming and challenging without prior experience.

Pros: Cost savings, control over project

One advantage of choosing to build your own home is the potential for cost savings and the ability to have complete control over the project.

This can be achieved by acting as your own general contractor or home builder.

Building your own home allows you to save money by eliminating the overhead costs associated with hiring a professional contractor.

Additionally, it gives you the freedom to make decisions regarding materials, design, and scheduling, resulting in a truly customized and innovative home.

Cons: Lack of experience, handling permits, hiring the right team

On the other hand, opting to build your own home without professional guidance may present certain challenges.

One significant drawback is the lack of experience in managing such a complex project. Without the expertise of a seasoned builder or general contractor, one may encounter difficulties in handling necessary permits, navigating building codes, and ensuring compliance with zoning regulations.

Additionally, the task of hiring the right team of skilled professionals can be overwhelming and time-consuming.

Recommendations for DIY Construction

To successfully complete a DIY construction project, it is important to carefully plan and strategize each step of the process. Here are four recommendations for DIY construction:

  1. Research and Educate Yourself: Familiarize yourself with construction techniques, codes, and regulations. Seek out online resources, books, and courses to gain knowledge and skills needed for the project.

  2. Create a Detailed Project Plan: Outline the scope of work, create a timeline, and identify the required materials and tools. This will help you stay organized and ensure that you have everything you need before starting.

  3. Start Small and Gain Experience: Begin with smaller projects to build your confidence and expertise. As you gain experience, gradually take on more complex tasks and larger projects.

  4. Seek Expert Advice: Consult with professionals such as architects or experienced DIY builders to get advice and guidance. They can provide valuable insights, recommend innovative techniques, and help troubleshoot any challenges you may encounter.

Following these recommendations will enhance your chances of successfully completing your DIY construction project while fostering innovation and creativity.

What's next

When it comes to building your own home, there are two main options to consider: hiring a general contractor or a custom home builder.

Both have their pros and cons, and it ultimately depends on your specific needs and preferences.

A general contractor is responsible for managing the entire construction project, while a custom home builder focuses on creating unique and personalized homes.

DIY construction can be a cost-effective alternative if you have the necessary skills and resources. Whatever option you pick, you will need to hire an interior designer or architect to help you with some, if not most of the design decisions.

Read our post on Should you hire Pro or DIY the interior design of your house?

Ultimately, the choice lies in understanding your requirements and making an informed decision.

FAQ

Can a general contractor build a house?

General contractor can build a house. General contractors oversee and manage construction projects, including homes. They hire and supervise subcontractors, obtain permits, order materials, and ensure construction adheres to plans and meets code requirements.

What is the difference between construction and general contractor?

General contractors manage the big picture while construction workers do hands-on specialized work to build the project. The general contractor oversees the construction workers and subcontractors.

The main differences between a construction worker and a general contractor are:

  • Role: Construction workers do physical labor on the job site, while general contractors manage and oversee the entire construction project.
  • Skills: Construction workers have trade skills like carpentry, plumbing, or electrical work. General contractors have managerial skills like scheduling, budgeting, contracting subcontractors, and ensuring legal compliance.
  • Scope: Construction workers are responsible for specific tasks or trades. General contractors are responsible for the whole project from start to finish.
  • Licensing: Construction workers may need trade-specific licenses and certifications. General contractors are licensed professionals with additional education, experience, and certification requirements.
  • Pay: Construction workers are typically hourly employees. General contractors earn higher salaries and get a percentage of the total project cost.
  • Responsibilities: Construction workers follow instructions and complete assigned tasks. General contractors create plans, obtain permits, hire subcontractors, oversee progress, and coordinate all the different components.

Should I hire construction design-build to build my home?

Design-build can be a good option for many homeowners looking for a streamlined process with a single point of responsibility. Make sure to research design-build firms carefully and understand the pros and cons before deciding.

There are a few factors to consider when deciding whether to hire a design-build firm to build your home:

Pros of design-build:

  • Single point of contact – Rather than hiring an architect and general contractor separately, you work with one firm for both design and construction. This can simplify communication and coordination.
  • Collaboration – With both design and construction under one roof, there is more opportunity for collaboration between the design and build teams, which can optimize the homebuilding process.
  • Cost savings – By overlapping the design and construction phases, design-build can sometimes save time and costs compared to the traditional design-bid-build model.
  • Design-build firms often have significant experience building homes, so they may be adept at incorporating design elements that work within certain budgets.

Cons of design-build:

  • Less design flexibility – Since the builder is also the designer, changes later in the process may be more difficult or limited.
  • Potentially less independent oversight – With a combined design-build firm, you lose the “checks and balances” of separate architect and builder.
  • Need to research qualifications – Make sure to hire an experienced design-build firm with expertise in residential projects similar to yours.

What is the difference between design builder and contractor?

A design builder provides both architecture/engineering and construction under one contract while a general contractor only handles the building/construction work. Design builders offer an integrated approach while general contractors work with completed designs.

The main differences between a design builder and a general contractor are:

Design Builder:

  • Handles both the design and construction of a project under one contract. They employ or subcontract architects and engineers as well as trade contractors.
  • Assumes responsibility for both the design and construction phases.
  • Work is usually done sequentially starting with design then construction. But there can be some overlap.
  • Ideal for projects where design and construction coordination is critical.

General Contractor:

  • Constructs the project according to a set of plans provided by an architect or design professional hired separately.
  • Assumes responsibility for just the construction phase and quality control.
  • Typically does not provide design services in-house. Subcontracts all architectural and engineering work.
  • Manages trade subcontractors needed for the building work.
  • Ideal for straightforward projects with a defined scope and design already completed.

How do you choose the right people to build your dream home?

Taking the time to carefully vet and select the right general contractor, subcontractors, and design professionals will help ensure you have the right team in place to build your dream home successfully.

Here are some tips for choosing the right people to build your dream home:

  • Get referrals – Talk to friends, neighbors, realtors, architects etc. who have built homes recently and can recommend contractors they had good experiences with.
  • Research contractors’ credentials – Look for licensed, insured contractors with solid reputations. Check reviews and look at examples of past projects to evaluate their quality of work. Make sure they have experience building homes similar to your design.
  • Interview multiple candidates – Meet with 3-5 general contractors in person, provide project details, and get bids. Gauge their responsiveness, expertise, and how comfortable you feel with them.
  • Check references – Ask contractors for client references and follow up with them. Ask about quality, timeliness, communication, and overall satisfaction.
  • Prioritize communication – Choose a contractor who listens to your vision, provides clear explanations, and is responsive when you have questions. Open communication is key.
  • Compare bids transparently – Review bid breakdowns side-by-side. Look for bid transparency and fair pricing on materials and labor.
  • Confirm credentials – Verify contractors’ licensing, insurance credentials, and membership in industry associations like the National Association of Home Builders.
  • Get it in writing – Carefully review contracts before signing. All agreements, pricing, and timelines should be in a comprehensive written contract.