Tips for Working With a General Contractor on Your New Home Construction Project

A general contractor is a professional who manages the job of building or renovating a home. They hire and coordinate the subcontractors, keep the project timeline moving, and act as your main point of contact from demo to completion and final walkthrough.

 A good contractor can be the difference between a project that runs smoothly and one that’s full of bumps. Here's how to find that person (or company) and build a working relationship that gets you the home you've always wanted.

What to look for in a good contractor

Generally, the signs of a good contractor include having the right documentation, clear and consistent communication, relevant experience with projects like yours, strong references, and a solid reputation. 

Proper licensing and insurance

This is a non-negotiable. Confirm the contractor and subcontractors are licensed and registered to do residential work in your state. 

A license and a registration aren't the same thing: licensing generally means the contractor has met your state's requirements, such as passing exams, proving experience, and carrying insurance, while registration is often a record of their business that doesn't vouch for their skill. Requirements vary by state, but a license is usually the stronger signal. You can also check a contractor's standing yourself, since many states offer a free online license lookup through their licensing or contractor board.

A good contractor will provide current copies of their license and insurance up front, often with their proposal or scoping documents, so you shouldn't have to ask. And because paperwork like this can be forged, confirm the details with your state's licensing authority rather than taking the copies at face value.

Make sure their insurance covers the following, at minimum:

• General liability: pays for injuries to other people or damage to their property caused by the work.
• Workers' compensation: covers medical bills and lost wages if a worker is hurt on your property, so those costs don't fall on you.
• Property damage coverage: pays to repair damage to your home or belongings that happens during the project.

Communication and working style

Think about how frequently you want to receive updates and how quickly you want your questions answered, then go from there. How long does it take to get a call or message back while they're still trying to win your business? If it takes them days, even before you’ve selected them, don't expect them to get faster once the contract is signed and the work is underway.

Relevant experience

There are various types of new construction homes. Ask how many projects like yours the general contractor has completed, including for photos or to visit their finished work. Keep in mind that just because they’re good at one type of project doesn’t mean they’ll be good at another.

References

It’s a good idea to ask any general contractor you might hire for satisfied homeowners you can talk to. When you reach them, ask:

• Whether they’d hire that contractor again
• What they did well
• what they could’ve done better, or didn’t do well 

Pay special attention to that last answer, because anything a previous customer experienced could happen to you, too. Consider if you’re willing to deal with whatever issue is mentioned if it were to come up during your project.

Reputation and reviews

Ask for referrals from family, friends, or your real estate agent — this is often how homeowners find general contractors. If you belong to a neighborhood group or a local email listserv, ask for recommendations there, too; word tends to get around about who's reliable and who isn't. Once you have a short list, check for complaints filed with the Better Business Bureau and look at recent reviews on Yelp, Angi, and Thumbtack. 

How to hire: Getting bids and signing a contract

Here are some tips as you compare candidates for a general contractor:

Know what you want before you ask for an estimate

Describe the work you want in writing, and be as specific as you can. The more detail you can give on layout, materials, and finishes, the more accurate your bids will be — and the more fairly you can compare one contractor against another. 

Get at least three bids

Be sure to get each estimate in writing, such as an emailed or hard-copy document with the contractor’s contact information and an itemized list of costs. (It doesn’t have to be very detailed at this point, but it should at least cover the scope of the work and permits.) If it’s not already included, ask for the hourly rate for any extra work outside of what was scoped.

Understand how the contract is structured

General contractors typically work under one of two contract types:

• Fixed price: The contractor estimates the full cost of the project, including any fees. They include a fixed price for categories related to the work, like tile, flooring, and lighting fixtures.
• Cost-plus: For larger-scale or long-term projects, a cost-plus contract charges you the actual price of materials and labor, plus a percentage the contractor keeps as payment for their work.

Read your contract carefully before you sign

Before you put any ink to paper, make sure the general contractor’s proposed contract spells out the full scope of work, the timeline, the payment schedule, how change orders are handled, and how disputes will be resolved. If you're financing the project, know all the terms of your loan before you sign. 

How to handle your payments

Whether you’re building the home with a loan or savings, it’s important to understand the plan for how you’ll pay the contractor. 

Understand the payment schedule

Every project should have a budget and a schedule of payments. In practice, the contractor usually sets the terms (i.e. how much is due up front, then at defined milestones, and at completion), so ask for that schedule early and be sure you understand it before you sign. 

If you're building with a construction loan, your lender typically controls the timing. They will inspect the work at each phase and release funds to pay the contractor after.

Never pay in cash

Cash leaves no record. If there's a dispute about quality, or the contractor walks off the job, you'll have no way to prove what you already paid. Use methods that create a paper or digital trail, like checks, credit cards, and electronic bank transfers all leave a record.

Keep written records of everything

Track the progress of the work, including any changes you approve. When memories differ months into a project, your records can help settle it. For example, if the contractor swaps in materials you didn't approve or misses a deadline they set, you can point to your notes and approvals.

How to work well together once the job starts

The hiring is done; now your working relationship carries the project. Here are a few ways to help keep things on track with your general contractor:

Speak up early, and stay calm

One of the most common sources of contractor frustration is the homeowner who quietly stews instead of raising a concern until it boils over. Your contractor can't fix what they don't know about. Prepare your questions, ask them before you're upset, and lean on their expertise. (You can also gut-check with your real estate agent, if needed.)

Handle changes with written change orders

If you change your mind about the design, materials, or any other aspect of the project, it’s important to put it in writing in a “change order.” This is a short contract amendment stating the change, what it costs, and how it affects the schedule, signed by both you and your contractor. If the change alters something structural, like the size or shape of a room, be sure the updated plans are attached, as well.

Lock in your selections on time

If the contractor has to wait a long time for you to choose finishes, that can throw off the completion schedule. Before the work starts, agree on how long you’ll spend debating options. If you can, make all your picks at once, rather than piecemeal. 

The bottom line

A great contractor relationship involves:

• Hiring someone licensed, insured, and experienced in your specific type of project.
• Putting everything in writing.
• Keeping track of all communications and payments.
• Communicating openly once the work begins.
• Using AI to stay organized and prepared along the way.

Ready to start? Whether you're building new or renovating, you can browse new construction homes and floor plans on Zillow for inspiration.