Question 1

What not to say to a general contractor?

Accepted Answer

When working with a contractor, avoid saying: 1. They are the only one bidding on the job. 2. Your budget. 3. Requesting a discount for upfront payment. 4. You aren't in a hurry. 5. Letting them choose the materials.

Question 2

Why do general contractors charge so much?

Accepted Answer

The value of a good general contractor encompasses top-tier service, resulting in a more positive experience, as quality home improvement services necessitate significant investments in concealed details, often being costlier due to the allocation of additional resources such as time, expertise, and finances.

Question 3

How do I hire a local contractor?

Accepted Answer

When hiring a contractor, follow these checklist and tips: 1. Get multiple estimates. 2. Hire local, licensed contractors whenever possible. 3. Check their past work. 4. Take your time making a sound decision. 5. Check their insurance and bonding. 6. Get everything in writing. 7. Understand your right to cancel, and 8. Don't pay up-front.

Question 4

How much is a contractors license in AZ?

Accepted Answer

License and renewal fees for new license applications are as follows: General Residential (B, B-3, B-4, B-5, B-6, B-10) - Application fee: $180, License fee: $320; Specialty Residential (R) - Application fee: $80, License fee: $270; General Dual (KA, KB-1, KB-2) - Application fee: $200, License fee: $480.

Question 5

What do most general contractors charge per hour?

Accepted Answer

Average general contractor rates typically range from around $50.00 to $150.00 per hour, although some contractors may not charge an hourly rate, instead opting for a fee that's about 10 to 20 percent of the total construction project cost.

Question 6

What is the normal markup for a general contractor?

Accepted Answer

As a general contractor, your profit margin, representing the amount remaining after covering all job costs, typically falls within a markup range calculated as a percentage, with the average markup varying from 7% to 20% or more.

Question 7

How do I choose the right contractor?

Accepted Answer

Here are eight pro tips for finding a contractor from start to finish: 1. Get recommendations. 2. Conduct phone interviews. 3. Meet face to face. 4. Investigate the facts. 5. Make plans and get bids. 6. Set a payment schedule. 7. Don't let price be your sole guide. 8. Put everything in writing.

Question 8

Where is the best place to find independent contractors?

Accepted Answer

You can utilize the following resources to find professionals with the qualifications and reliability you require: LinkedIn, WorkMarket, staffing agencies, Stack Overflow, Chamber of Commerce, and professional organizations.

Question 9

How do you ask a contractor for a quote?

Accepted Answer

Clearly communicate your project requirements to the contractor, request their best possible estimate, and provide a detailed timeframe for your repair, bearing in mind that most general contractors typically do not provide quotes for projects more than three months in advance.

Question 10

How much work can you do without a contractor license in Arizona?

Accepted Answer

In general, contractors must be licensed if the combined cost of labor and materials exceeds $1,000 or if a permit is necessary, irrespective of the labor and materials cost.

Question 11

Does a handyman need a contractors license in Arizona?

Accepted Answer

In Arizona, a contractor license is mandatory for major projects and work exceeding $1,000 in value, encompassing both labor and materials, while minor projects below $1,000 fall under the handyman exemption, making a license generally unnecessary for such tasks.

Question 12

Is it normal to pay 50% upfront?

Accepted Answer

Ensure your upfront payment terms are transparent and uniform, typically involving 25-50% of the total bill, or you can opt for a staged payment approach, releasing portions of the final payment at various project completion milestones.

Question 13

Is it normal for a contractor to ask for money up front?

Accepted Answer

This is a standard practice, as the contractor is required to provide a down payment to the supplier before initiating the custom product, preventing potential complications if the homeowner were to alter their decision after the supplier has commenced the work, leaving the contractor responsible for the payment.

Question 14

What are 50 50 payment terms?

Accepted Answer

A business owner might stipulate a "50/50" term, indicating a 50% deposit upon order receipt, with the remaining balance due upon the customer's receipt of the product or service, often phrased as "50% deposit, balance on delivery."

Question 15

How do you calculate labor cost for a contractor?

Accepted Answer

To calculate labor cost for a worker, use the formula: (Hourly Wage + Hourly Labor Burden) * Hours Worked/Needed; for instance, if a worker is paid $25 per hour with a labor burden of $7 per hour and is needed for 40 hours on a project, the labor cost for this worker would be $1,280 ( ($25 + $7) * 40 ).

Question 16

What to expect from a general contractor quote?

Accepted Answer

The general contractor fee is typically determined through a markup percentage applied to the total construction project cost, calculated based on material costs, subcontractor labor, and additional expenses that may occur.

Question 17

Is it normal for a contractor to ask for 50 down?

Accepted Answer

Contractors may request a 50% deposit for relatively small jobs, such as a $16,000 bathroom remodel, while a 10%–20% deposit is more common for larger projects like a $100,000 full-home renovation.

Question 18

What is a reasonable markup?

Accepted Answer

Although there is no fixed "ideal" markup percentage, many businesses use a 50 percent markup, also referred to as "keystone," indicating that the price charged is 50% higher than the cost of the product or service.

Question 19

How do you interview a general contractor?

Accepted Answer

When interviewing a contractor, consider asking questions such as their years in business, possession of a contracting license and insurance, willingness to obtain permits and schedule inspections, project timeline, payment schedule, and the presence of a dedicated team for your project, among others.

Question 20

How many contractor quotes should I get?

Accepted Answer

The number of estimates you should gather for a home improvement project should be based on your need to make a well-informed and satisfactory decision, rather than adhering to a specific rule such as obtaining three estimates.

Question 21

What are the 2 methods of selecting a contractor?

Accepted Answer

Two common contractor selection methods are low-bid, where the owner selects the contractor based on the lowest bid, and qualifications-based, which considers the contractor's qualifications and expertise.

Question 22

What is the best company type for a contractor?

Accepted Answer

To reduce personal risk, a general contractor may opt to establish a limited liability company (LLC) or corporation, which legally separates the entity from the owner, safeguarding the owner's personal assets from the company's debts and legal liabilities in most situations.

Question 23

What should I keep track of as an independent contractor?

Accepted Answer

Maintain thorough records by taking photographs and archiving receipts, including digital and physical invoices, credit card statements, office expenditures, and other tax-deductible transactions, while also managing an independent contractor spreadsheet to monitor both income and expenses.

Question 24

Should I tell a contractor my budget?

Accepted Answer

A reputable remodeling contractor will typically inquire about your budget to provide cost-effective recommendations, so it's advisable to be open and honest when discussing your budget with them.

Question 25

What should a contractor quote include?

Accepted Answer

Every estimate should include essential elements such as a job description outlining the work, a breakdown of materials and labor costs, the total project cost, and the contact information for the sales and company representatives.

Question 26

What can a handyman legally do in AZ?

Accepted Answer

Small repairs and services under the $1,000 threshold, such as painting drywall and furniture assembly, do not necessitate a license, while larger projects require either a general or specialty contracting license obtained from the Arizona Registrar of Contractors.

Question 27

How much does it cost to get a general contractor's license in AZ?

Accepted Answer

License and renewal fees for new license applications in various classifications include: General Commercial (A, B-1, B-2) with an application fee of $200 and a license fee of $580, Specialty Commercial (C) with an application fee of $100 and a license fee of $480, and General Residential (B, B-3, B-4, B-5, B-6, B-10) with an application fee of $180 and a license fee of $320, among others.

Question 28

Can I be my own general contractor in Arizona?

Accepted Answer

A sole proprietorship (individual), partnership, limited liability company, or corporation can seek a contractor's license if they have a qualified individual with the requisite experience, knowledge, and skills employed on a regular basis as the qualifying party.

Question 29

What is the penalty for hiring an unlicensed contractor in Arizona?

Accepted Answer

Engaging in contracting without a license, as per A.R.S. § 32-1151, constitutes a class 1 misdemeanor under A.R.S. § 32-1164, with potential penalties including a maximum six-month county jail term and a maximum fine of $2,500, along with an 83% surcharge.

Question 30

What does 100% upfront mean?

Accepted Answer

Companies typically prefer early payment, often through up-front payments, where customers either pay the full amount or a partial sum before receiving the service or delivery, aligning with the company's best interests.

Question 31

What are typical payment terms for contractors?

Accepted Answer

Payment terms like Net 10, Net 30, or Net 60, as indicated on the invoice, signify that the contractor's payment is due 10, 30, or 60 days from the date of the invoice, with typically few associated risks, making it a common choice for independent contractors.

Question 32

What does net 14 mean?

Accepted Answer

Payment terms such as Net 14 or 14 Days indicate that the net amount outstanding on the invoice must be paid within fourteen calendar days from the invoice date, while Net 15 specifies a payment deadline of fifteen calendar days from the invoice date.

Question 33

What is contractor negligence?

Accepted Answer

In the context of contractors and construction, negligence encompasses any action or lack thereof that results in a failure to exercise a reasonable duty of care, and in legal terms, it occurs when such actions or inactions lead to damage or injury to another person.

Question 34

Do general contractors negotiate?

Accepted Answer

Numerous contractors are open to reducing their costs or negotiating specific contract terms when competing for a project, as demonstrated by over 80% of contractors in a recent Angie's List poll who expressed their willingness to lower their prices to secure a job.

Question 35

Should a contractor ask what your budget is?

Accepted Answer

Once you have committed to working together, it is crucial for your contractor to be informed about your budget, as early discussions regarding budget and financing help ensure that the project's scope remains suitable.

Question 36

What is typical markup for general contractor?

Accepted Answer

As a general contractor, your profit margin typically ranges from 7% to 20% or more, representing the amount remaining after covering all job costs, and this margin is often calculated as a percentage markup on expenses.

Question 37

What is the average profit of a general contractor?

Accepted Answer

The average net profit margin for construction businesses typically falls within the range of 3-7 percent, as reported by research from IBIS World, and to achieve profitability, these businesses must consider all costs, encompassing labor, materials, and overhead.

Question 38

Is a 50% markup good?

Accepted Answer

Although there is no fixed "ideal" markup percentage, many businesses commonly utilize a 50 percent markup, often referred to as "keystone," which equates to charging a price 50% higher than the cost of the goods or services provided.

Question 39

How do I prepare for a general contractor meeting?

Accepted Answer

Prior to your meeting, gather project ideas, information, and a comprehensive list of "needs" and "wants," establish your desired and maximum budget, and compile a set of specific questions for the contractor.

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