Commonly referred to as a "mark-up", General Contractor (GC) Fees are included in every project so it is important to understand the value you are getting for your buck.
Let's start with an analogy that simple for everyone to understand: Selling your home.
When you go to sell your house, you hire a listing agent. When you sell your house, you pay your listing agent and the buyer's agent commission for completing the transaction. Most never even think twice about this process.
If you really wanted to, you could sell your house on your own. You could do the research to appraise the value of the home, implement marketing, do showings with prospective buyers, manage negotiations, write contracts, and deal with lawyers and title companies etc. This sounds very time-consuming - and it is! Especially if you are not experienced doing so. Inexperience will most likely result in not get the best value for your home and leaving money on the table in addition to your lost time. So it's worth paying an agent to help us with all of this because they are experienced and will likely get more value out of the home than it cost you to pay them to sell it, therefore it's not really an "additional expense". If you tried to sell your home on the open market yourself, you would not only incur the marketing costs but also the time it takes to sell the property could be expensive to you.
Now let's relate that to your home renovation. Take the example of selling your house, which is a relatively simple concept to understand in terms of a process versus completing a large renovation project which is more akin to fixing your own car without being a mechanic. Most of us probably wouldn't do that either if we didn't have experience because we know the value of having someone with the knowledge and experience to do that for us. It's worth the price to get it done right.
You maintain your vehicle because it's a pricey investment/expense. Well, your home is a much BIGGER investment! Your car depreciates, and your home appreciates (hopefully!) So should we not make sure we are taking care of our homes the way a mechanic maintains your vehicle? We think so!
So when you see that line that says "Mark-up" or "GC Fee" on your project, remember this is not an added expense that you could save if you did this on your own, but instead as an investment to obtain the maximum value.
When hiring a GC, here what you get:
Builder's Pricing - We benefit from builder's discounts with vendors and suppliers and you pay what we pay. These cost savings alone are usually less than the cost of the GC fee itself.
Sourcing Trades - We have the best trades at our fingertips. We have spent years vetting and working with experienced and qualified trades with time-tested extraordinary craftsmanship.
Price Negotiation - We work for you. We negotiate and get the best price for you.
Contracts - We manage all the contracts with suppliers and vendors for you so that all you are left with is one consolidated contract and invoice.
Project Scheduling - We manage and coordinate timelines and scheduling with all the trades and suppliers.
Project Management - We oversee all the work and ensure it meets our high standards.
Warranty - If you experience any issues, we take care of that for you at our expense. No worries.
It's about the value received. If the value being received is greater than the cost, this is a worthwhile expense.