So you are ready to build a new home or remodel an existing one.  You are now considering who should be responsible for overseeing it all.  Do you pay a general contractor (GC) to do it all or save a great deal of money doing it yourself?  This is not a simple question to answer.  There are no correct or incorrect answers.  There is only what you feel is right for you.

Building your own home can be very rewarding.  Many folks think about the money they will save.  Other folks consider the pride in doing it themselves.  No matter what your reasoning is for considering acting as your own builder you should still consider that less than 15% of new home constructed in 2008 were owner built.  That means 85% of new homes constructed were overseen by GCs.  There are reasons why the majority uses GCs.

Before you make your decision, it will be best for you to collect as much information as possible.  This will allow you to weigh out the advantages and disadvantages of both sides.  First, you should probably consider whether there are enough benefits for you to consider being your own builder.  If you don’t feel there would be enough benefits then the decision is easy.  However, if you like the benefits then you need to review the potential disadvantages.  If there are too many downsides that you don’t feel comfortable with then you should look to hire a GC.

Benefits of being an Owner Builder

Cost savings.  For obvious reasons, this tends to be the number one reason that folks build their own homes.  Bypassing the use of a GC can lead to average savings of anywhere from 15% up to 30%.

Control.  No one gets paid until you are satisfied with the work completed.  This is very important in making sure that every trade contractor performs his/her job at the highest level.  You choose the materials used to build your home.  This ensures that you get the quality you deserve at the best possible price, instead of the GC’s materials at a marked up price.

Satisfaction of DIY.  While this may not be the biggest reason, plenty of folks end up with a great sense of pride in building their own home.  It is an extremely rewarding feeling when you accomplish something so great.

Instant equity.  A byproduct of the cost savings is the equity that is available immediately upon completion of your home.  This equity becomes an immediate asset of yours and occurs because your home will appraise for 15-30% more than what you paid to complete it.  You will be able to sit back and enjoy the equity or put it to use for life’s necessities or desires, such as; making investments, paying for college, consolidating other debts, vacations, etc.

More home for the money.  Some folks decide to trade in the money they save by eliminating the GC for a slightly larger or more comfortable home.  This is always an option for you as well.  Just know that if you choose to upgrade the home, you may leave yourself with little or no instant equity.

Planning.  This goes farther than merely pointing to a home design and saying “aha”.  There will be many things you take into consideration.  All of the considerations will have a direct impact on the cost of your home.  Here are some examples of what you might consider:

Your need

• Location
• Permits
• Home needs
  • Living space
  • Number of floors
  • Beds
  • Baths
  • Kitchen
  • Foundation type
  • Storage area
• Your wants
• Location (yes it fits here too)
• Architectural design and appeal
• Exterior and interior finishing
• Flooring types
• Entertainment areas
• Decks, porches or patios
• Pools

Bidding.  This is the most important part of the process.  It will also be the 2nd most time consuming.  This is because you will need to obtain multiple bids for all aspects of work required to complete your home per your plans and specifications.  Getting the price you like for what you want to do is only part of this phase.  This part of the process will also involve the interviewing because you must be comfortable with the trade contractors that will perform the work.  Here are some examples of very general work phases you may require bids for:

• Site work
• Foundation
• Framing

1. Structure
2. Roof

• Exterior Finish
• Plumbing
• HVAC
• Electrical
• Insulation
• Drywall (or other interior wall surface)
• Interior finish
• Landscaping

Financing.  If you have to borrow the money to build your home, as most folks do, then this is your make or break.  It may not be the most time consuming part of the home building process but it will most likely be the most straining part.  This is because you are selling yourself and your construction project to the bank.  Additionally, the bank employees will expect you to respond at their time.  Selecting the right construction banking advisor will make this process much simpler.

Building.  Ok, you made it through the other phases of the home building process.  Now the exciting part; construction of your residence.  While the majority of this phase requires mostly management skills, this will be the most time consuming part of your project.  Here are some of the things you will be dealing with to complete this phase:

• Scheduling delivery of materials
• Scheduling trade contractors
• Scheduling inspectio

1. Local inspectors
2. Bank inspectors

• Conducting your own physical onsite inspections
• Requesting draw payments
• Making payments
• Obtaining lien waivers from trade contractors and/or suppliers
• Constantly updating your payables to verify you remain on budget
• Problem solving (some examples)

• Unexpected site issues
• Increases in costs of materials
• Faulty labor or materials
• Irresponsible trade contractors
• Missed or untimely delivery of materials
• Weather

Legal responsibility/liability

One of the most significant things a GC does in the home building process is that he/she will carry all the responsibility and liability.  At day’s end, the GC will be accountable for any aspect of work they oversee.  In the event that something major goes wrong, the GC will be responsible.  As an owner-builder, you will assume all the responsibility.  You will need to make sure you screen the trade contractors very well and engage in contracts that hold them accountable for their individual job responsibilities.  However, there are some things that can go wrong that you, and only you, will pay for if you don’t pay attention to detail.  Here is one example of the many things that can really hurt you:

Choosing the wrong location on the lot to build the home

This is usually crippling and it does happen even when surveys are done.  A hole is dug, foundation is poured, and framing begins.  Then, out comes the local code officer to inspect.  Upon inspection, you are notified that the home is being built inside the required property setback.  This is a clear violation of building codes and you have to knock down and start over.  Obviously, you have already spent a ton of money and you find yourself in quite a financial jam.

Expertise

The main reason a GC is hired to build homes is for his/her expertise.  The knowledge and experience they have saves the average homebuyer time and money.  They can easily help a homeowner with the planning, bidding and building phases.  From start to finish, a project will stay on time and on budget.  Their experience also makes them more capable of dealing with any of the many complications that will arise during the construction process.

Contacts

A benefit of working with a GC that is often overlooked is their familiarity with and relationships with other professionals.  They are likely to know and have influence with Zoning boards, planning commissions, political figures, trade contractors, etc.  This can be incredibly useful if you are dealing with a property that will require any type of special assistance, such as; variances, change in zoning, etc.  Also, don’t rule out the favors that can be pulled in a time of crisis.