What's the Difference Between a Builder and a General Contractor?

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Building under construction (Photo: @g_dezigner via Twenty20)
You’re looking to build a new home or do some extensive renovations. It’s going to be a big project that involves both structural and cosmetic work. There are plenty of things you aren’t settled on yet, but one thing you know for sure: It’s a bigger job than you can handle yourself. So, who do you hire to get it done for you, a builder or a general contractor?
Builder vs. general contractor: the two terms seem like they mean the same thing. But in the construction world, builder and a general contractor are not interchangeable words. The roles they play can overlap at times, but as a profession, they are very different in general. Which one you choose often depends on how you decide to proceed with your project.

What Should You Expect of a General Contractor?

A general contractor often has a background in one or more of the trades, but it isn’t required. The main component of contracting isn’t putting the proverbial shovel to dirt but in arranging the skilled labor necessary to get the project completed.
General contractors should be licensed and have formal training in their field. That usually starts with several years of experience, but can be classroom learning instead. The ability to manage a project is the main skill developed, but budgeting, building code, inspections, and engineering aptitude are all components of a general contractor.
Once training and apprenticeships are completed, a licensing exam is typically required, although every state has their own regulations regarding the process. A general contractor is normally paid based on the percentage above the cost of hiring the trades, so a key component to doing well in the career is to quote accurately.
Roles a general contractor performs include:
  • Either designing the plans or subcontracting out the design process to a draftsperson.
  • Hiring subtrades including electricians, plumbers, carpenters, and other laborers.
  • Purchasing materials for the job and arranging delivery.
  • Obtaining permits for the project.
  • Managing the project schedule to keep it on time.
  • Paying invoices for completed work.

What Should You Expect from a Builder?

On the other hand, a builder might seem like a general contractor since they take the project from conception to completion. However, the process that gets you to a finished project is a little different.
A home builder is often a complete team of tradespeople. That includes framers and carpenters, electricians, plumbers, HVAC installers, and finishers. Also on the team are general laborers who perform “go-fer” tasks and cleanup.
Most notably, the “builder” is almost always a tradesperson who is hands-on in completing some or all of the work on your project, be it a renovation or a complete house build.
When you hire a builder, the quote you receive is for the complete project, start to finish. Their pay comes from budgeting correctly to account for materials, their labor costs, permits, and an additional cost buffer for mistakes and repairs, then having enough left over to collect a paycheck.
Being a builder carries more of a risk than a general contractor. If you have cost overruns, it eats into your pay. As a general contractor, the set rate above costs provides consistent earnings, but not as lucrative as a builder on the average.

Should You Choose a Builder or a General Contractor?

It’s important to consider both options. A general contractor can normally get the job done faster for you, but it typically comes at a higher price point. A builder is generally less expensive but could take a little longer to have a finished product.
Why not get a quote from both contractors and builders to help make your decision? Before you make a call either way, make sure you get a contract in writing for costs and timelines.