To hire a general contractor, follow five steps:
(1) define your project scope, (2) find licensed candidates through referrals or platforms like Angi or Thumbtack, (3) verify their license and insurance through your state licensing board, (4) collect at least three detailed bids, and (5) sign a written contract before any work begins or money changes hands.
Key Takeaways
- General contractors charge 10-20% of total project cost as a management fee, plus $50-$150/hour for direct labor (Angi, 2026)
- Labor accounts for 40-60% of your total renovation budget. The contractor you choose determines whether that money is well spent
- Always verify a contractor’s license number directly through your state licensing board. Never rely on a business card or their word
- Get at least three bids. Bids more than 20% below the average are a red flag, not a deal
- Never pay more than 10-15% upfront before work begins, regardless of what the contractor requests
- The construction industry is short 439,000 workers in 2026 (Associated Builders and Contractors). This shortage creates conditions for scams and substandard work. Vetting is more important than ever
Table of Contents
- What Does a General Contractor Do?
- General Contractor vs. Handyman: Which Do You Need?
- How to Find a General Contractor Near You
- How to Verify a Contractor’s License and Insurance
- How Many Quotes Should You Get?
- How to Compare Contractor Bids the Right Way
- Questions to Ask Before You Sign
- Red Flags and Contractor Scams to Watch For
- Understanding Contractor Costs in 2026
- What If Things Go Wrong?
- Frequently Asked Questions
Introduction
Last year, reports of contractor fraud continued rising across the U.S., driven by labor shortages, rising material costs, and homeowners under pressure to hire fast (FTC and BBB ScamTracker, 2026). Industry estimates suggest roughly 10% of contractors engage in unethical practices, from cutting corners on materials to taking deposits and vanishing entirely (Christina DiNardi, 2026).
That does not mean most contractors are bad. Most are skilled, honest professionals. But “most” is not a protection strategy when you are handing over $30,000 for a kitchen remodel.
This home contractor guide covers the full contractor hiring process: what a general contractor actually does, where to find one, how to verify credentials, what to look for in a contract, and how to protect your homeowner rights if things go sideways. By the end, you will have a framework for hiring a general contractor that experienced homeowners use, not the surface-level advice that gets people burned.
This guide is for homeowners in the renovation planning stage working on projects ranging from room additions to full remodels. The construction industry faces a labor shortage of 439,000 workers in 2026 (Associated Builders and Contractors). That shortage creates pressure to hire fast and conditions for scams. Whether you are choosing a general contractor for the first time or have been burned before, the goal is the same: hire confidently, not just quickly.
1. What Does a General Contractor Do?
A general contractor (GC) is the construction manager of your renovation project. As a residential contractor, they serve as the single point of accountability between you and every subcontractor, material supplier, permit officer, and inspector involved in your home improvement project.
Think of the GC role as construction project management. They do not just show up and swing a hammer. They coordinate every moving part of residential construction so the work flows in the right sequence and to the right standard. On larger projects, a project superintendent may be stationed on site daily to manage trades and quality between the GC’s visits.
Here is what a general contractor typically handles:
- Permit pulling: Submitting building permit applications and navigating the permit approval process with local building departments on your behalf
- Subcontractor hiring and oversight: Finding, vetting, scheduling, and supervising electricians, plumbers, framers, drywall crews, and other tradespeople. Subcontractor management is where inexperienced GCs most commonly fail
- Material procurement: Sourcing and ordering materials, managing deliveries and storage on site
- Timeline management: Building and maintaining a project timeline and construction phase schedule so trades do not block each other and the renovation timeline stays on track
- Budget tracking: Monitoring costs against the agreed contract price, flagging issues before they become change orders
- Quality control: Inspecting finished work before the next phase begins so problems do not get buried
- Final walkthrough: Completing the punch list and signing off on all items before your final payment is released
Understanding the distinction between a GC, a subcontractor, and a handyman matters before you start looking. Our guide to General Contractor vs Subcontractor: Roles Explained breaks down exactly who does what on a job site, which also helps you spot inflated billing when subcontractors appear on an invoice.
2. General Contractor vs. Handyman: Which Do You Need?
Not every project requires a general contractor. For smaller repairs, a handyman may be faster and significantly cheaper. The key variables are project complexity, permit requirements, and total budget. This general contractor vs handyman decision comes down to one test: does the project require a building permit?
| Project Type | Use a Handyman | Use a General Contractor |
|---|---|---|
| Fixing a leaky faucet | Yes | Overkill |
| Painting a room | Yes | Overkill |
| Installing new flooring (single room) | Yes | Overkill |
| Bathroom remodel | Only if cosmetic only | Yes (permits often required) |
| Kitchen remodel | No | Yes |
| Room addition or home addition | No | Yes (structural work and permits required) |
| Full home renovation | No | Yes |
| Electrical panel upgrade | No | Yes (requires licensed electrician via GC) |
| Roofing replacement | No | Yes (liability and permit-heavy) |
The rule of thumb: if the project requires a building permit, involves structural changes, or requires multiple licensed tradespeople, you need a general contractor. Building code compliance and building code adherence are a GC’s domain, not a handyman’s. See our detailed breakdown of General Contractor vs Handyman: Which Do You Need? for a full decision framework.
If you are unsure whether your project is too small to justify a home improvement contractor, read Hiring a Contractor for a Small Job: Is It Worth It? before making the call.
3. How to Find a General Contractor Near You
The best general contractors are rarely the ones running the most ads. In most markets, the strongest residential contractors stay fully booked on referrals alone. Finding a licensed contractor with a proven track record takes more effort than a quick Google search, but the effort pays off when you are picking a renovation contractor with tens of thousands of dollars on the line. Knowing how to choose a contractor before you start calling saves you from the most common early mistakes.
Start With Referrals
Ask neighbors, family members, or coworkers who recently completed a similar renovation. A referral from someone whose project you can see in person is worth more than any online review. Ask specifically: Did the project stay on budget? Did the contractor communicate proactively? Would you hire them again? This is the starting point for how to find a contractor who actually delivers.
Use Vetted Online Platforms
If you do not have a referral, platforms like Angi, HomeAdvisor, Thumbtack, and Houzz are a reasonable starting point for how to find a contractor near me searches. Many homeowners searching “find contractor near me” or “find a local contractor” land on these platforms first. Each works differently. Some pre-screen for licensing, others do not.
Checking a contractor’s Google Business Profile is also worth doing. Recent reviews, photos of completed work, and owner responses to negative feedback all reveal how a contractor handles client relationships. See our full comparison of Angi vs HomeAdvisor vs Thumbtack: Best Way to Find Contractors? to understand which platform actually filters for credentials.
Check Trade Associations
The National Association of the Remodeling Industry (NARI) and Associated Builders and Contractors (ABC) both maintain member directories. The Better Business Bureau (BBB) is worth checking for complaints filed against any contractor you are considering. Members of trade associations are typically required to carry insurance and agree to ethical conduct standards, though membership is not a guarantee of quality. The National Association of Home Builders (NAHB) also publishes regional contractor directories worth consulting.
When selecting a home contractor from any source, your contractor selection criteria should include local project history, license status, and references from projects completed within the last 12 months. For a full walkthrough of how to pick a general contractor in your specific market, read How to Find a Good General Contractor Near You.
Contractor Insight: The biggest mistake homeowners make when hiring a renovation contractor is reaching out without a clear project description ready. Good contractors are booked 3-6 months out. If you call with vague plans, you will get deprioritized in favor of homeowners who are ready to move. Have your scope of work, rough budget, and desired renovation timeline management plan in writing before the first call.
4. Finding a Licensed Contractor: License and Insurance Verification
This is the step most homeowners skip when vetting a contractor, and it is the most important one. Knowing how to check contractor license status yourself is one of the most valuable skills in this entire process. This section covers how to verify a contractor is licensed and fully insured before any money changes hands.
License Verification
Every state has a licensing authority with an online lookup tool. The Contractor State License Board in California is one of the most well-known examples. In Florida, the Department of Business and Professional Regulation (DBPR) serves the same function. Search “[your state] contractor license lookup” to find your state’s tool and verify the contractor’s license number is active and matches the legal business name they gave you. Do this yourself. Do not accept a photocopy of a license card.
Things to confirm in the license record:
- License is current and not expired
- License covers the type of work you need (some licenses are trade-specific)
- No disciplinary actions, suspensions, or revocations on file
Running a background check through your state licensing board takes less than five minutes and eliminates the most common category of fraudulent contractors.
Insurance Verification
A general contractor should carry two types of insurance: general liability insurance (covers property damage during the project) and workers compensation (covers workers injured on your property). Without workers’ comp, you can be held liable if a subcontractor is injured on your job site. This is one of the most overlooked homeowner protection issues in residential construction.
Ask for a Certificate of Insurance (COI) with your name listed as the certificate holder. Then call the insurance company directly to confirm the policy is active. Policies can lapse after a certificate is issued. These contractor insurance requirements protect you, not the contractor. For a full breakdown of contractor insurance requirements homeowner rights depend on, see our state-by-state guide.
Contractor Bond and Surety Bond
In addition to insurance verification, confirm whether your state requires a contractor bond. A surety bond provides a financial guarantee that the contractor will complete the work or compensate you if they fail to do so. Resources like JW Surety Bonds explain state-by-state bonding requirements and what contractor bond coverage actually means for homeowners. A bonded contractor adds a meaningful layer of protection beyond basic contractor qualifications.
| Document to Request | What It Covers | How to Verify |
|---|---|---|
| Contractor License | Legal right to perform construction work | State licensing board online lookup |
| General Liability Certificate | Property damage during the project | Call insurer listed on COI |
| Workers’ Compensation Certificate | Worker injuries on your property | Call insurer listed on COI |
| Business License | Legal business registration | City or county clerk’s office |
For state-by-state guidance on license verification and insurance verification, see How to Verify a Contractor’s License and Insurance (State-by-State).
Still weighing whether an unlicensed contractor could ever be appropriate? Read Should You Hire a Licensed vs Unlicensed Contractor? The answer may surprise you, but the legal and financial risks rarely justify the cost savings for anything beyond minor repairs.
Reference Checks
Do not skip contractor reference check calls. Ask for three contractor references from projects completed in the last 12 months. Call each one. Ask whether the project finished on time, on budget, and whether the contractor handled problems professionally. Our guide to How to Check Contractor References the Right Way includes specific questions that reveal information references do not volunteer.
5. How Many Quotes Should You Get When Hiring a General Contractor?
The minimum is three. That number is not arbitrary. With one contractor estimate, you have no frame of reference. With two, you have a comparison but no tiebreaker. With three contractor bids, patterns emerge: what is standard for your project type, what seems inflated, and what seems suspiciously low.
Three bids does not mean you must hire the middle bid. It means you have enough data to make a confident decision about hiring a home contractor who is priced fairly and scoped correctly. Three renovation estimates also reveal whether contractors are quoting the same scope or different assumptions about what the project actually includes.
For a full breakdown of why the number of contractor estimates matters and how to request them correctly, read How Many Contractor Quotes Should You Get?
6. How to Compare Contractor Bids the Right Way
Two bids for the same project can vary by 30% or more and still both be legitimate. The difference is often in what is included versus excluded, the quality of materials specified, and labor burden assumptions. Knowing how to compare contractor bids is one of the most valuable skills in the entire contractor hiring process.
When comparing construction bids, look at these elements side by side:
| Bid Component | What to Look For |
|---|---|
| Scope of work | Is the description specific or vague? Vague scopes protect the contractor, not you |
| Material specifications | Does the bid name brands, grades, and quantities? Generic “cabinets” means whatever is cheapest |
| Labor breakdown | Is labor line-itemed or bundled? Bundled labor hides contractor markup on subcontractors |
| Payment schedule | Are payments tied to project milestones? Lump-sum payment schedules are a red flag |
| Permit and inspection costs | Are building permits included or listed as owner’s responsibility? |
| Change order policy | How are cost changes handled? Is there a markup percentage stated? |
| Renovation timeline | Is a start date committed in writing? What is the estimated completion date? |
| Warranty terms | What workmanship warranty is offered and for how long? |
A bid that is 30-40% below the others is almost never a genuine deal. It usually signals the contractor plans to recover margin through change orders, substitute cheaper materials, or walk off the job before completion. A renovation budget that looks low on paper often ends higher than the honest mid-range bid.
You may also encounter a design-build vs general contractor decision, where a design-build firm combines architectural design and construction under one contract. This is a fundamentally different contracting services structure. Read Design-Build vs General Contractor: Key Differences to understand which model works better for your project type.
See How to Compare Multiple Contractor Bids (Free Template) for a downloadable comparison template. Renovation cost overrun prevention starts with comparing bids properly before you commit.
7. Questions to Ask Before You Sign
Before signing any construction contract or releasing a contractor deposit, you should have direct answers to a specific set of questions. These questions reveal how a contractor handles projects, money, and problems, not just whether they show up on time for the estimate. Properly vetting a contractor at this stage prevents most of the problems homeowners report after signing.
The most critical questions include:
- Who exactly will be working on my project daily: your own employees or subcontractors?
- Are all subcontractors licensed and insured? Can I see their contractor qualifications on file?
- What is your process for handling change orders?
- How do you communicate project updates: calls, texts, daily logs?
- Who handles permit inspections and is that included in your fee?
- What happens if the project runs behind schedule?
- What does your workmanship guarantee cover and for how long?
- What is your general contractor fee structure for this project type?
- How do you handle homeowner protection if a subcontractor causes damage?
What is included in a contractor contract varies, but every written contract should cover: scope of work, materials specification, payment schedule milestones, change order terms, contractor accountability provisions, project completion date, and warranty terms. If any of these are missing, ask for them in writing before signing.
We have compiled 25+ Questions to Ask a General Contractor Before Hiring, a comprehensive list you can print and bring to every estimate meeting. For a deeper look at how to read a contractor contract clause by clause, a comprehensive list you can bring to every estimate meeting.
8. Red Flags and Contractor Scams to Watch For
In late 2024 and throughout 2025, reports of contractor fraud, unfinished work, and disputes continued rising, according to data from the Federal Trade Commission (FTC), BBB ScamTracker, and state licensing boards. Three patterns drive most cases: labor shortage construction 2026 conditions encouraging unlicensed workers to present as licensed contractors, large upfront contractor deposits followed by disappearing acts, and material-cost manipulation using volatile prices as cover for unjustified increases.
Common Red Flags
- Pressuring you to sign on the first visit
- Asking for 50% or more upfront as a contractor deposit before starting
- No written contract or a vague one-page document with no scope detail
- Cannot provide a verifiable license number on request
- No physical business address or local presence
- Cash-only payment requirement
- Starting work immediately without pulling building permits
- Unable to provide contractor references from recent projects
Critical Warning: Work performed without building permits can void your homeowner’s insurance coverage for related damage claims. It can also force you to tear out completed work during a resale inspection. This is not a technicality. It is one of the most expensive outcomes unlicensed contractor situations produce.
Contractor Scams to Avoid in 2026
Storm chaser contractor scams are especially active after weather events. These contractors descend on affected neighborhoods, offer quick roofing contractor or structural repairs at reduced rates citing “leftover materials from a nearby job,” collect a large deposit, and disappear before starting meaningful work. Learning how to spot a contractor scam before you are targeted is more effective than recovering from one afterward.
Contractor fraud patterns specific to 2026 also include fake Google Business Profile listings with fabricated reviews, unlicensed workers presenting credentials that belong to a different licensed entity, and renovation scam operators cycling through business names to avoid BBB complaints.
For the broader landscape of contractor red flags and active schemes targeting homeowners, see How to Spot a Contractor Scam (Common Schemes in 2026) and Red Flags When Hiring a Contractor: 15 Warning Signs.
9. Understanding Contractor Costs in 2026
General contractor pricing follows two main models: a contractor markup percentage on total project cost, or an hourly rate for direct work. Understanding the general contractor fee structure before you receive bids helps you evaluate whether what you are being quoted is reasonable.
General Contractor Fee Structure (2026 Data)
| Pricing Model | Typical Range | When Used |
|---|---|---|
| Percentage of project cost | 10-20% contractor markup | Most common for full renovations |
| Hourly rate | $50-$150/hour | Smaller scopes or consulting only |
| Cost-plus contract | Direct costs plus 15-25% fee | Large or complex custom projects |
| Fixed-price (lump sum) | Total project price stated upfront | Well-defined scopes with detailed drawings |
Source: Angi, HomeAdvisor, 2026.
What Drives Total Project Cost
Labor costs account for 40-60% of your total renovation budget, and that percentage has been climbing. As NAHB Chief Economist Robert Dietz stated in late 2025: “Labor continues to be the single biggest driver of remodeling costs. Skilled trade shortages mean homeowners should expect higher baseline pricing, even for small projects like bathroom remodels.”
This renovation cost guide reflects 2026 market conditions where home renovation cost per square foot ranges from $100 to $400 depending on scope, materials, and region. A kitchen remodel contractor typically costs $25,000 to $100,000+. A bathroom remodel contractor project runs $12,000 to $35,000. A home addition contractor project can reach $80,000 to $250,000. A roofing contractor job varies by material and square footage but is among the most permit-heavy residential scopes. Here is a full snapshot:
| Project | Average Cost Range (2026) | GC Fee Estimate (10-20%) |
|---|---|---|
| Bathroom remodel | $12,000 – $35,000 | $1,200 – $7,000 |
| Kitchen remodel | $25,000 – $100,000+ | $2,500 – $20,000 |
| Home addition | $80,000 – $250,000 | $8,000 – $50,000 |
| Full home renovation | $150,000 – $300,000+ | $15,000 – $60,000 |
| Basement finishing | $20,000 – $60,000 | $2,000 – $12,000 |
Sources: Angi (2026), HomeAdvisor (2026), RenoWorks (2026), GoodSamaritanServicesLLC (2026).
Material costs have been volatile. A cost-plus contract where you pay actual costs plus a fixed GC fee provides transparency but exposes you to material price swings. A fixed-price contract locks in your total price but requires a complete, well-documented scope of work before signing. Neither model is universally better. The right choice depends on how well-defined your project is.
Contractor Deposit and Payment Milestones
A legitimate contractor does not need 50% upfront. Standard industry practice is 10-15% at contract signing, with subsequent payment milestones tied to measurable project stages: framing complete, rough-in inspections passed, drywall hung, project completion. These payment schedule milestones protect both parties. Never release the final payment until your construction punchlist is signed off and all permit inspections are approved.
If a lien waiver is required in your state, collect one before releasing each payment. A lien waiver confirms the contractor has paid their subcontractors and suppliers for that phase of work, removing the risk of a mechanic lien or construction lien being filed against your property even after you have paid the GC in full.
10. What If Things Go Wrong?
Even with careful contractor vetting, projects can go sideways. The contractor falls behind, communication breaks down, or in the worst case, they stop showing up entirely.
What to Do If Your Contractor Disappears
If your contractor disappears mid-project, your first actions are to document everything: photos, texts, emails, invoices. Stop all payments immediately and send a formal written notice to the contractor’s address of record by certified mail. This creates a legal paper trail if you need to pursue a construction lien, small claims action, or contractor’s license complaint.
Your state contractor licensing board can suspend a license and compel action faster than civil litigation in many states. Use it. A contractor’s license complaint is a documented, formal process that creates real consequences for the contractor and protects future homeowners from the same outcome.
A mechanic lien filed by an unpaid subcontractor against your property, even when you paid the GC, is a legitimate risk in most states. This is why collecting a lien waiver at each payment milestone matters. Homeowner rights in contractor disputes are stronger than most people realize, especially when a written construction contract exists and payments were tied to verified project milestones.
For contractor accountability issues that do not involve disappearing contractors, including cost overrun disputes, project delays, and workmanship disputes, document every communication, reference the written contract, and escalate through the state licensing board before pursuing civil remedies.
Our guide to What to Do If Your Contractor Disappears Mid-Project covers the full step-by-step process, including how to hire a replacement contractor without losing your construction lien rights. What to do if contractor disappears mid-project is one of the most searched homeowner questions for a reason: the steps are time-sensitive and most people do not know them.
Frequently Asked Questions
How do I find a good general contractor in my area?
Start with referrals from neighbors or friends who recently completed a similar project. If you do not have a referral, use a platform like Angi, HomeAdvisor, or Houzz and filter for contractors with verified licenses and a minimum of 10 reviews. Check their Google Business Profile for recent client feedback. Always verify the contractor license number directly through your state licensing board before inviting anyone to bid.
What does a general contractor do?
A general contractor serves as the construction manager for your renovation project. They handle building permits, subcontractor management, material procurement, project timeline oversight, budget tracking, quality control, and final walkthrough. As a residential contractor, they are your single point of accountability for the entire residential construction process, from permit approval process through to punch list sign-off.
How much does a general contractor charge in 2026?
General contractors charge 10-20% of total project cost as a contractor markup, plus $50-$150 per hour for direct labor. On a $50,000 kitchen remodel contractor project, expect $5,000 to $10,000 in GC fees. Labor costs overall account for 40-60% of your total renovation budget, according to 2026 data from Angi and HomeAdvisor. A home addition contractor on a $150,000 project may charge $15,000 to $30,000 in management fees alone.
How to verify a contractor is licensed?
Search “[your state] contractor license lookup” to reach your state licensing authority, such as the Contractor State License Board in California or the Department of Business and Professional Regulation (DBPR) in Florida. Enter the contractor’s license number and verify it is active, covers the right work type, and has no disciplinary history. This is non-negotiable license verification that takes under five minutes. Read our Complete guide : How to Verify Contractor’s License.
What are red flags when hiring a contractor?
The most serious contractor red flags are: inability to provide a verifiable license number, requesting a large cash contractor deposit upfront, showing up unsolicited after a storm or disaster, presenting a verbal agreement instead of a written contract, and pressuring you to sign on the same day as the estimate. Any of these warrants walking away. See our full guide on contractor red flags for a complete list of warning signs.
Should I hire a general contractor or handyman?
Use a general contractor if the project requires a building permit, involves structural changes, or requires multiple licensed tradespeople. This general contractor vs handyman decision is straightforward once you know whether permits are required. Use a handyman for cosmetic repairs, single-trade tasks under a few hundred dollars, and maintenance work that does not touch structural elements or licensed trade work.
How many estimates should I get before hiring?
Get at least three contractor estimates for any project over $5,000. Knowing how to compare contractor bids starts with having enough data to identify what is standard, inflated, or suspiciously low. A bid more than 20-30% below the others is a serious red flag. Contractor deposit rules and payment structures should be compared across all three bids before you make a decision.
What is included in a contractor contract?
A proper construction contract should include: scope of work with specific material specifications, payment schedule milestones tied to project phases, change order procedures and contractor markup percentage for changes, renovation timeline with start and completion dates, contractor bond and insurance information, workmanship guarantee terms, and lien waiver provisions. If any element is missing, request it in writing before signing.
How Much Should I Pay Upfront to a Contractor?
Pay no more than 10-15% at contract signing as your contractor deposit, regardless of what the contractor requests. Legitimate contractors do not need large deposits to fund your project. A request for 30%, 50%, or more upfront is one of the clearest contractor red flags in the contractor hiring process. Subsequent payments should be tied to verified project milestones, not calendar dates.
What if a contractor does bad work?
Document everything with photos and written records. Reference the workmanship guarantee in your written construction contract. Send a formal written notice requesting correction within a specified timeframe. If the contractor refuses, file a complaint with your state licensing board. Homeowner rights in construction disputes are strongest when a signed written contract with clear specifications exists.
How long does it take to hire a contractor?
The contractor hiring process typically takes two to six weeks from initial outreach through contract signing. Good contractors are often booked 3-6 months ahead, so renovation planning should start early. License verification, insurance verification, reference checks, and bid comparison each take additional time. Rushing this process is the primary cause of homeowners hiring the wrong contractor.
How to compare contractor bids the right way?
Line up all three renovation estimates against the same scope of work checklist. Compare material specifications, labor breakdowns, payment schedule milestones, renovation timeline management commitments, change order terms, and warranty terms. Price alone is not a valid basis for comparison. A contractor selection criteria checklist ensures you are evaluating the right factors, not just the bottom line.
What questions should I ask a general contractor before hiring?
Key questions include: Who will be on site daily? Are all subcontractors licensed and insured? How are change orders handled? Who pulls building permits? What is your workmanship guarantee? What does your general contractor fee structure look like for this project type? How do you handle project delays? What is your contractor accountability process if something goes wrong? See our full list of 25 questions to ask a general contractor before hiring.
How do I know if a contractor is legitimate?
A legitimate contractor has a verifiable license number, carries general liability insurance and workers compensation, has a physical business address, provides contractor references from recent projects, uses a written construction contract, and does not pressure you to sign or pay immediately. Running a contractor background check through your state licensing board and calling the insurer directly on their Certificate of Insurance confirms legitimacy before you commit.
What happens if a contractor walks off a job?
Stop payments immediately. Document all completed and uncompleted work with photographs. Send a formal written notice by certified mail. File a complaint with your state contractor licensing board. Assess whether a construction lien or mechanic lien has been or could be filed by unpaid subcontractors. Consult a construction attorney if the contract amount is significant. Homeowner rights in this situation are well-established in most states when a written contract exists.
Can I hire a contractor without a permit?
Technically yes, but you should not. Work performed without building permits can void your homeowner’s insurance for related damage claims and create serious complications during property resale when a home inspection flags unpermitted work. Building code compliance is your legal responsibility as a property owner, regardless of what the contractor tells you. A GC who suggests skipping permits to save money is not acting in your interest.
What is a general contractor fee percentage?
The standard general contractor fee percentage is 10-20% of total project cost, added as a contractor markup on top of subcontractor and material costs. On a cost-plus contract, the fee is stated explicitly. On a fixed-price contract, it is built into the lump sum. The percentage typically decreases for larger projects and increases for more complex or shorter-duration work. Always ask for the fee structure to be disclosed in writing.
How to find a contractor that is not a scam?
Verify the contractor license through your state licensing board. Confirm insurance directly with the insurer. Get three contractor estimates and compare them side by side. Check the contractor’s Google Business Profile and BBB record for complaints. Look up their business with your local contractor licensing board. Never pay a large upfront contractor deposit. Knowing how to spot a contractor scam before signing is far easier than recovering from one afterward.
What is a punch list in construction?
A punch list is the itemized list of incomplete or deficient work that must be addressed before the project reaches final completion and the final payment is released. It is generated during the final walkthrough between the contractor and homeowner. A well-run contractor produces a construction punchlist during the final phase of work, not on the handover day, so all items are resolved before you take possession.
What is a lien waiver in construction?
A lien waiver is a document signed by a contractor or subcontractor confirming they have received payment and waive their right to file a mechanic lien or construction lien against your property for that portion of the work. Collecting lien waivers at each payment milestone ensures that even if the general contractor fails to pay their subcontractors, your property is not exposed to third-party lien claims. Contractor deposit rules and lien waivers work together to protect your homeowner rights throughout the project.
Conclusion
Hiring a general contractor is one of the highest-stakes decisions most homeowners will make. The right contractor delivers your project on time, on budget, and to code. The wrong one can cost you twice: once to pay them, and again to fix what they did or did not do.
The contractor hiring process is not complicated. Define your scope. Find licensed candidates. Verify credentials independently. Get three detailed contractor estimates. Ask the right questions before signing. Document everything from day one. Contractor negotiation, documentation discipline, and licence verification together protect most homeowners from most problems, even in a market defined by labor shortage construction 2026 conditions and rising contractor fraud.
For home renovation contractor tips on any one of these steps, this site has a dedicated guide. Use the links throughout this article to go deeper on the areas most relevant to your renovation project, and bookmark this page as your reference before the next contractor call.
