General contractor or owner-builder: how to decide

Acting as your own builder can save a markup but moves risk, scheduling and legal duties to you. Decide with eyes open.

What a general contractor does

A GC holds the contract, hires and coordinates trades, buys or manages materials, schedules, pays subs, deals with inspections, and carries insurance and warranty duties.

What owner-building means

You take on those duties yourself. Some places allow it only for owner-occupied homes, may limit resale for a period, or require an exam or declaration. Check local rules.

The honest cost comparison

• Savings: the contractor margin and overhead.
• Added cost: your time, mistakes, weaker trade pricing, and delays.
• Added risk: injuries on site, uninsured work, defects with no one to claim against.

Middle options

• Hire a project manager or consultant for scheduling and coordination.
• Use a GC for structure and envelope, and manage finishes yourself.
• Buy materials directly with clear responsibility for owner-supplied materials.

Checks before you decide

1. Check licensing and permit rules for owner-builders.
2. Ask your insurer and lender what they require.
3. Confirm who is responsible for worker safety; OSHA-style rules may apply to you.
4. Draft a schedule and a budget with a contingency before deciding.

Quick answers

• Is owner-building cheaper? Sometimes on paper; hidden costs and risk often offset it.
• Does a lender allow it? Many require an experienced builder. Ask your lender.
• Who is liable for injuries? Often the party in control of the site. Get legal and insurance advice.

Rules differ by country, state and city. Confirm requirements with your local authority having jurisdiction and with the licensed professionals on your project; nothing here is legal, engineering or financial advice.

Questions people ask

Is owner-building cheaper?

Sometimes on paper; hidden costs and risk often offset it.

Does a lender allow it?

Many require an experienced builder. Ask your lender.

Who is liable for injuries?

Often the party in control of the site. Get legal and insurance advice.

Sources and further reading

• OSHA construction industry
• NAHB

Text Digital Oro

Digital Oro International advertises on The Company Chronicle. This guide was written by our editorial team from public sources and general professional practice; it does not describe a guarantee, quote or offer from Digital Oro International. Confirm current terms, prices and availability with the operator before you decide.