Hiring a general contractor is the single highest-stakes vendor decision in residential construction. A good GC delivers a well-executed project on time and close to budget; a bad GC produces a disaster that takes a year to resolve and costs multiples of the original budget. The difference is not luck. It is vetting.
This guide is part of the Know Before You Hire series. At Home Services Co, we are not a traditional general contracting company — we are a multi-trade service company — but we work with GCs and we see the outcomes of both good and bad hiring on our customers' projects. The framework below is the distillation.
Step one: licensing. General contractor licensing varies dramatically by state. Some states have strict statewide licensing with bonded requirements. Others (notably Texas) have no statewide GC license — instead requiring specific trade licenses for the subs the GC hires. Know your state's rules. Where licensing exists, verify. See verifying a contractor license.
Step two: insurance. General liability with $1M minimum (preferably higher for larger projects), workers' comp, and commercial auto. Verify with carrier. See insurance verification.
Step three: bonding. Bonding matters more on GC work than any other trade — you are paying significant money upfront relative to work completed, and contractor failure can strand your project halfway through. Bonds provide financial recourse. See insured vs bonded vs licensed.
The single most important vetting practice: recent-project references. Ask for three to five recent projects of similar scope to yours. Visit one if possible, or at minimum call the homeowners. Ask specific questions: Did the project finish on time? Did it finish on budget? Did change orders come up, and how were they handled? Did the contractor communicate proactively or did you have to chase them? Would you hire them again for a bigger project? What would you warn me about? These questions produce specific answers from real customers. Scripted references get uncomfortable on the 'what would you warn me about' question.
Multiple bids, comparable scope. The standard is three bids on the same written scope. The bids should be itemized, not just totals — each line should reflect specific work, specific materials, specific quantities. Wildly different totals for 'the same project' usually indicate different actual scope assumptions. Require every bidder to bid against the same scope document. Without this discipline, you are comparing apples to entirely different fruits. See getting three comparable quotes.
The contract. The GC contract is the single most important document in the project. It should include: scope of work (extremely detailed — what is and is not included), payment schedule (tied to milestones, not calendar dates), change-order procedure (written, signed, priced before work proceeds), materials specifications, timeline with milestone dates, what happens if the timeline slips, warranty terms, termination clauses, lien waiver procedure, dispute resolution. A one-page contract is a red flag. A good GC contract runs 10-30 pages. See essential contract clauses and spot a bad contract.
Payment structure. Never pay 50% or more up front. The typical schedule: modest deposit (10-20%) at contract signing, progress payments at specific milestones (framing inspection passes, drywall complete, etc.), final payment only after punch list is complete and final inspection passes. Any contractor who demands most money up front is a contractor who intends to extract value before delivering it. See when to pay a deposit.
Change orders. Change orders are how projects blow budget. Every change should be documented in writing before work proceeds — with the change, the cost, the schedule impact, and both signatures. A GC who makes verbal changes and then bills for them at the end is a GC you cannot effectively control. Written change orders, no exceptions. See change orders explained.
Lien waivers. Every payment should be accompanied by a lien waiver from the GC (and potentially from subs, depending on your state). Without lien waivers, if the GC doesn't pay their subs, the subs can file a mechanics lien on your house — you've paid the GC but you now owe the sub directly. Lien waivers protect you from paying twice. See lien waivers explained.
Permitting. Every significant project requires permits. The GC should pull permits, schedule inspections, and handle the paperwork. Unpermitted work creates long-term disclosure issues at resale and potential forced re-do if discovered. A GC who offers to 'skip the permits' is a GC operating outside the regulatory framework. Skip them, not the permits. See does this job need a permit.
Red flag #1: dramatically low bid. A bid 20-40% below the other two is a bid that is either missing scope, using lower-quality materials, planning to blow through with change orders, or unlicensed and uninsured. The 'savings' becomes expensive later. See why cheapest costs more.
Red flag #2: large upfront deposit. Never pay over 30% before meaningful work is done. Always tie payments to milestones.
Red flag #3: no written scope. 'We'll figure it out as we go' is a recipe for unbounded expansion of cost. Demand written, itemized scope.
Red flag #4: pressure to sign today. Legitimate contractors do not pressure same-day signatures. Every reputable GC expects you to review the contract, consult with your attorney if appropriate, and sign when ready.
Red flag #5: the 'good friend' model. Hiring a friend or friend-of-friend as your GC without going through the vetting process is a common source of bad outcomes — both to the project and to the friendship. If you do hire someone in your network, apply the same vetting process you would apply to a stranger. No shortcuts.
Red flag #6: the disappearing-PM problem. The salesperson who signs you up vanishes; the project manager who actually runs the project is someone you never met, with different skills. Ask explicitly: who will be my project manager, and will I meet them before signing? A good GC introduces the actual PM in the pre-contract conversations.
Project management cadence. A good GC communicates daily or every-other-day during active construction. Daily check-ins (even brief texts) keep the project on track and catch issues early. A GC who goes silent for days at a time during active work is a GC losing control of the project. See daily check-in playbook.
Discovery during construction. Almost every renovation project discovers something unexpected — rot behind walls, outdated wiring, inadequate structural support, hidden plumbing issues. How the GC handles discovery tells you everything about their integrity. A good GC stops, documents with photos, gets your approval on the scope expansion and cost before proceeding. A bad GC barrels through and invoices later. Insist on the stop-document-approve pattern.
Timeline reality. Renovations take longer than quoted. A GC who promises a 6-week bathroom remodel is almost always quoting 8-12 weeks in reality. Accept this or find a GC who quotes honestly. The pain of a 6-week project running 12 weeks (because 'we had delays') is worse than the pain of a 10-week quoted project finishing on time. See keeping renovation on budget.
Firing a GC mid-project. Sometimes necessary, never easy. The warning signs: repeated missed deadlines without communication, visible quality problems, scope expansion without proper change orders, unresponsive to direct messages, subs complaining about not being paid. Document everything. Consult an attorney before firing. See firing a contractor cleanly and what happens if a contractor abandons the job.
Pricing reality varies enormously by project type and scope. Kitchen remodel: $25,000-$100,000+. Bathroom remodel: $15,000-$60,000+. Whole-house renovation: $100,000-$500,000+. Addition: $150-$400 per sq ft of addition. Large projects generally run 1.5-2x whatever you initially assumed. Budget accordingly.
The summary. Verify license, insurance, and bond. Get three comparable bids. Detailed written contract. Milestone payment schedule. Written change orders. Lien waivers with every payment. Pull all required permits. Consistent daily communication. Stop-document-approve pattern on discovery. Accept realistic timelines. Fire cleanly if needed.
Our Home Services Company handles many renovation-adjacent services — see kitchen remodeling, bathroom remodeling, handyman. Related series reading: kitchen remodeler, bathroom remodeler, talking to contractors, mid-project price increase, pricing, book, or the full series.