Before You Talk to Any GC
Get your plans and an independent cost estimate first. You cannot evaluate a bid without a baseline.
Walking into a GC conversation without knowing what your project should cost puts you at a permanent disadvantage. An independent cost estimate gives you the baseline to evaluate every bid, identify missing scope, spot low allowances, and negotiate specific categories. Do this before your first meeting.
10-Step Process for Hiring a General Contractor
You cannot get a meaningful bid without completed plans. You cannot evaluate a bid without an independent cost estimate. Do both before your first GC conversation. This puts you in the position of knowledge rather than dependence.
The best GC leads come from people who recently built homes in your area — ask at your local building department who pulls the most permits for residential new construction. Also ask your architect, structural engineer, or real estate attorney.
Every state has a contractor licensing board with an online license verification tool. A GC's license number should be on their business card, website, and any written correspondence. Verify it takes 60 seconds and is non-negotiable.
You need two certificates: (1) General Liability insurance — covers property damage and third-party injury. (2) Workers' Compensation insurance — covers workers injured on site. Without workers' comp, injured workers can file claims against your property.
Most homeowners ask for references and never call them. The ones who call often ask soft questions. Call 3 recent references and ask: Was the project on time? On budget? How were change orders handled? Would you hire them again? Did they communicate proactively?
Every candidate GC must bid from the exact same plans and specifications. If they bid different things, the bids are not comparable. Do not allow substitutions in the bid — they can propose alternates as additions after bidding.
The lowest bid almost always excludes scope items the others include. Before comparing prices, normalize scope — add excluded items at market rate to every bid. Only then compare total numbers.
Meet in person. Walk a current job site if possible. Ask about their subcontractor relationships, how they handle disputes, what happens if a sub does poor work, and their current workload. A GC managing too many projects simultaneously gives yours less attention.
The contract is where risk is allocated. The change order clause, draw schedule, exclusions list, warranty terms, and dispute resolution process are the sections that matter most and are read least.
Contractors expect negotiation, especially when you have multiple bids. Asking for a better price is not offensive — it is part of the process. Areas to negotiate: GC markup percentage, allowance amounts, retainage terms, and payment schedule.
10 Questions to Ask Every GC Candidate
Are you licensed in this state? What is your license number?
Can I have certificates of general liability and workers' comp?
How many residential new builds have you completed in the last 3 years?
How many projects are you currently managing?
Who will be on site daily — you or a superintendent?
How do you handle a subcontractor who does substandard work?
What is your change order process and markup rate?
What is your draw schedule — milestone or calendar based?
What is your warranty on workmanship?
Can I visit a current job site?
10 Red Flags — Walk Away If You See These
No physical business address — only a PO Box or cell phone
Reluctance to provide license number or insurance certificates
No references from completed projects in the last 2 years
Requests for large upfront deposit (over 15%) before work begins
Pressures you to sign immediately without time to review
Cannot provide a line-item breakdown — only lump sum
No written change order process in the contract
Currently managing more than 4–5 projects simultaneously
Significantly lowest bid with no explanation of what is excluded
No workers' compensation insurance
Frequently Asked Questions
How do I find a good general contractor for new home construction?
The best sources: referrals from people who recently built similar homes in your area, your local building department (ask who pulls the most residential permits), your architect or structural engineer, and active job site visits. Online review platforms can supplement but should not be your only source.
How many bids should I get for a new home?
Get 3–5 bids from licensed GCs, all bidding from the same plans and specifications. One bid gives you nothing to compare. Three gives you a market. Never sign with the first GC you meet, regardless of how good they seem.
What should I verify before hiring a general contractor?
Verify: active contractor license through your state licensing board, general liability insurance certificate (call the insurer to confirm it's active), workers' compensation insurance certificate, 3–5 references from recent projects (and actually call them), and no pending complaints or disciplinary actions on their license.
Is it normal to negotiate with a general contractor?
Yes — contractors expect it. Negotiating with a cost estimate in hand is the most effective approach. Point to specific line items where the bid exceeds market rate and ask the GC to justify the difference. Areas most open to negotiation: GC markup percentage, allowance amounts, and draw schedule terms.
Kerem is a construction cost analyst and architectural graduate with a degree from the Illinois Institute of Technology. He has spent over a decade analyzing residential and commercial build costs across all 50 U.S. states, and leads the cost methodology team at Equin Global LLC — the company behind CostToBuildHouse.com.
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