Choosing a Contractor: the Good, the Bad, and the Ugly

As an architect, I get to hear multiple contractor pitches and see multiple bids on the regular. Especially in custom residential, it can really feel like the wild west.

The Man with No Name is uninterested in crappy GC practices.

I’ve heard or seen everything that’s in the list below, and believe me, there are plenty of GCs who run their businesses like this. Two thoughts come to mind here - first, if you’re a GC, the bar is pretty low to be a good one. The “good” stuff listed below isn’t really that hard, and certainly isn’t revolutionary in a business sense. Second, there are sometimes state-specific consumer protection laws or laws specific to home improvement projects/contractors that supercede whatever dumb contract a GC gets a homeowner to sign. The ones in Massachusetts, where we do a lot of work, are pretty serious! So whether you’re a homeowner or a GC, it’s worth knowing what those are.

Also, just a reminder - I used to work for a GC as an estimator and project manager, and I was trained in the “good” ways. I’m forever grateful for learning from the best!

So without further ado...the good, the bad, and the ugly:

Question: what is your markup?

Good: 20% on subs and materials.

Bad: 15% on subs, materials, and our own labor. And on the gas we fill our trucks with on our way home from your jobsite.

Ugly: Well, we don't really have a markup, we just charge a fee for what we want to make on a job, so it's just like a number sort of like a % but not really.

There is nothing wrong with a GC charging industry-standard markups. But they shouldn’t be charging it on their own labor, and certainly not on stuff that is not solely for your job and/or part of their overhead. If they can’t answer this question clearly and cleanly, move on.

Question: what deposit do you require?

Good: 10% to secure a spot on our schedule

Bad: 50%, with remaining 50% due after the first invoice