The right pro can make your dream home a reality
General contractors manage the entire home-building process, while builders focus on the construction part.
Some builders employ general contractors, so customers don’t need to hire multiple companies to build their homes.
General contractors charge 10% to 20% of the total project cost, while builders may charge by the day or hour.
Building a home is an incredibly exciting experience—but it can also be highly stressful. Between drawing up plans and choosing the right people to make your vision a reality, you can quickly become overwhelmed. That’s why you need to hire someone to help you get your ducks in a row. This guide breaks down the difference between a builder versus a general contractor so you can decide who to hire to construct your dream home.
Builders and general contractors are instrumental in the construction of a new home. However, each type of pro approaches the process from a different angle. A local general contractor oversees the entire project from start to finish, while a builder focuses on the actual construction of the house. Here are the main differences between the two roles.
| Type of Difference | Builder | General Contractor |
|---|---|---|
| Responsibilities | Home construction | Project management |
| Project Types | Construction | Various |
| Specialization | Construction | Various |
| Cost | $40–$200 per sq. ft. | 10–20% of project |
A general contractor is a jack-of-all-trades. They will work with you through the entire home-building process, from planning and getting building permits to managing subcontractors and tracking progress. Your contractor’s job is to ensure everything goes smoothly and they complete the project within the scheduled timeline.
Builders focus on building the house. They pour the foundation, frame the home, and install roofing and siding. Additionally, a builder is responsible for laying piping and ductwork, installing insulation and soundproofing, and fitting windows. They will not install HVAC units or complete electrical or plumbing work; those tasks are left to subcontractors hired by the general contractor. Some custom builders have a general contractor on staff to manage the construction process from start to finish.
General contractors have expertise that enables them to oversee various projects, from design to carpentry to electrical work. This diversity means you won’t have to keep tabs on all the subcontractors working on your home, giving you peace of mind during a stressful time.
Builders have a more limited scope of experience since they’re laser-focused on the actual building of the house. They may not handle tasks like applying for permits, which general contractors can do for you. However, some home builders may take care of permitting as part of their contract, so it’s best to ask before you hire.
General contractors don’t specialize in just one area; they are experts in project management and work with dozens of subcontractors. However, a general contractor usually isn’t involved in the physical aspect of building a house, so they will need to hire a builder for this purpose.
Many builders have decades of experience building houses from the ground up, which means they’re capable of creating your dream home, whether a spec house or a custom house. Builders will focus on what they’re best at—following plans to construct a home you’ll be proud to live in.
The cost to build a house typically ranges from $139,000 to $526,000, with an average cost of $320,000. A general contractor costs about 10% to 20% of the overall project cost, so expect to pay $30,000 to $60,000 if you’re building a $300,000 home. General contractors often charge $300 to $500 daily, plus $150 to $250 per day per subcontractor.
When building a new home, expect to spend about 40% on labor for builders and other contractors. That $300,000 home equates to $120,000 spent on labor and $180,000 spent on materials, design fees, and permits. The cost of hiring a builder depends on your location and the builder’s expertise, but you can expect to spend around $40 to $200 per square foot in labor costs.
To get a quote from a builder or general contractor, contact them over the phone or online and explain your project. If you already have house plans drawn up, they’ll need to review them to determine the project's scope before providing you with a quote. Ask for your quote in writing and compare quotes from several pros before choosing the best one for your needs.
No, builders and general contractors don’t expect tips. In fact, some companies may prohibit their employees from accepting client tips. If you want to show gratitude for a job well done, consider writing a review of your builder or contractor or agreeing to be a reference for potential new customers.
