Builder vs. General Contractor: Which Is Best For Your Project?

Building a home is an incredibly exciting experience—but it can also be highly stressful. Between drawing up plans and choosing the right people to make your vision a reality, you can quickly become overwhelmed. That’s why you need to hire someone to help you get your ducks in a row. This guide breaks down the difference between a builder versus a general contractor so you can decide who to hire to construct your dream home.

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

Builders and general contractors are instrumental in the construction of a new home. However, each type of pro approaches the process from a different angle. A local general contractor oversees the entire project from start to finish, while a builder focuses on the actual construction of the house. Here are the main differences between the two roles.

Builder vs. General Contractor: Responsibilities

A general contractor is a jack-of-all-trades. They will work with you through the entire home-building process, from planning and getting building permits to managing subcontractors and tracking progress. Your contractor’s job is to ensure everything goes smoothly and they complete the project within the scheduled timeline. 

Builders focus on building the house. They pour the foundation, frame the home, and install roofing and siding. Additionally, a builder is responsible for laying piping and ductwork, installing insulation and soundproofing, and fitting windows. They will not install HVAC units or complete electrical or plumbing work; those tasks are left to subcontractors hired by the general contractor. Some custom builders have a general contractor on staff to manage the construction process from start to finish.

Builder vs. General Contractor: Project Types

General contractors have expertise that enables them to oversee various projects, from design to carpentry to electrical work. This diversity means you won’t have to keep tabs on all the subcontractors working on your home, giving you peace of mind during a stressful time.

Builders have a more limited scope of experience since they’re laser-focused on the actual building of the house. They may not handle tasks like applying for permits, which general contractors can do for you. However, some home builders may take care of permitting as part of their contract, so it’s best to ask before you hire.

Builder vs. General Contractor: Specialization

General contractors don’t specialize in just one area; they are experts in project management and work with dozens of subcontractors. However, a general contractor usually isn’t involved in the physical aspect of building a house, so they will need to hire a builder for this purpose.

Many builders have decades of experience building houses from the ground up, which means they’re capable of creating your dream home, whether a spec house or a custom house. Builders will focus on what they’re best at—following plans to construct a home you’ll be proud to live in.

Builder vs. General Contractor: Cost

The cost to build a house typically ranges from $139,000 to $526,000, with an average cost of $320,000. A general contractor costs about 10% to 20% of the overall project cost, so expect to pay $30,000 to $60,000 if you’re building a $300,000 home. General contractors often charge $300 to $500 daily, plus $150 to $250 per day per subcontractor.

When building a new home, expect to spend about 40% on labor for builders and other contractors. That $300,000 home equates to $120,000 spent on labor and $180,000 spent on materials, design fees, and permits. The cost of hiring a builder depends on your location and the builder’s expertise, but you can expect to spend around $40 to $200 per square foot in labor costs.