Hiring a General Contractor for your building can be a real job if you have no idea of how to hire a general contractor or hiring a builder. Hiring general contractor or finding the right professional builder to handle a building or a major home improvement project is tricky. Getting a great job at a fair price is even trickier.

Let me explain it with a case in point here: I remember, a few years ago, on of my friend who also happens to be my neighbor, launched a major remodel and hired a "contractor friend" to manage all the remodeling work. The friend agreed to work and the contract was fixed on a "time and materials" basis. The contractor charged my neighbor friend an hourly rate and passing along expenses for plumbers, electricians, and other workers. My friend agreed to pay for all materials. The contract sounded like a good deal, but how it would actually work was not that simple.

As per my estimate, my friend's remodel should have cost $150,000 tops. Instead, he spent more than $275,000. The contract was fixed on “time and materials” basis and my friend had to pay to the contractor on an hourly rate. Hours raged out of control, and the contractor adopted some shady practices. He employed his own family members to be his subcontractors and paid them out of my friend's pocket. Is this how "friends" do your work?

What I want to explain here is that you should always shop around for reputable contractors and forge an agreement that is clear and fair. Do not fall prey to shady practices of contractors or you will end up spending much more than your budget on building and remodel.

Let us now understand how to find a general contractor.

To find a general contractor or builder, take help of personal recommendations, local building-supply dealers and online services. Collect information and make a list from all sources and make sure the service you use has a strong method of certifying their contractors. Use the telephone directory as a last resort.

Once you are ready with the list of general contractors, call and pre-qualify several of them to be sure that each one is licensed and insured for worker's compensation, personal liability and any property damage. Now that you have a sorted out list of contractors, you should personally go and meet four or five or them individually to make sure they can handle your work and schedule. Ask them for names and numbers of a few of their satisfied customers. Call all those references to check if they were happy and satisfied with the contractors. If possible, visit past clients' homes to see the contractor's work first hand. There is nothing to be shy in this. Most people who have undergone a successful remodel will be proud to show off their homes.

The nest step is to ask at least two or three contractor candidates, copy a formal bid based on exactly the same plans and specifications as yours’. I suggest you not to go for the lowest bid as this may indicate inexperience or desperation on the part of the contractor. As general, if a bid looks too good to be true, most probably it is good.

The contractor is going to handle your major construction and on occasions, you may have to deal with difficult issues. Therefore, it is better to create a good relationship or chemistry with your contractor. Prior to the contract, check the contractors’ commitment to your project. Ask how long they have been in the business and whether they will have other ongoing jobs while they're working on yours. If they have other work coinciding with yours, ask how much personal supervision they will give to your job.

When you have settled on one contractor, ask for his contractor's license and name of the insurance carrier and agency so you can check the coverage. This is a very important point to keep in mind before finalizing a general contractor.

When your construction or remodel job is finished, and at any point of time, you feel that you have been cheated or wronged by any means, you should lodge a formal complaint with the contractor's licensing board. This is one reason why it is important to work with licensed professionals. You may request arbitration or a hearing through that board. You can also contact the Better Business Bureau or bring suit against the contractor or his company You also have the option to bring the matter before small claims court.

If the contractor doesn't pay subcontractors or for materials (depending on the type of contract), the people owed money may be able to place a lien against your property. You can protect yourself from this on a large project by adding a release-of-lien clause to your contract and issuing your payments to an escrow account to be held until the work is completed. This is an expensive process but safer for a large project.