Question 1

What not to say to a general contractor?

Accepted Answer

Avoid these seven things when dealing with a contractor: never reveal that they are the sole bidder on the job, keep your budget undisclosed, refrain from requesting a discount for upfront payment, avoid mentioning that you're not in a hurry, don't let the contractor select the materials, and follow other guidelines for a successful contractor-client relationship.

Question 2

What is the hourly rate for contractors in Arizona?

Accepted Answer

The general contractor salary in Phoenix, AZ varies, with top earners making an annual salary of $100,816 or an hourly wage of $48, the 75th percentile earning around $87,000 or $42 per hour, the average salary being $75,814 or $36 per hour, and those in the 25th percentile making approximately $47,400 annually or $23 per hour.

Question 3

Do general contractors need a license in Arizona?

Accepted Answer

A licensed contractor is required for any business engaging in building, altering, repairing, adding to, subtracting from, improving, moving, wrecking, demolishing, or performing any related work on buildings, highways, roads, railroads, excavations, structures, developments, or improvements.

Question 4

Why do general contractors charge so much?

Accepted Answer

The value of a good general contractor encompasses superior service, which significantly enhances the likelihood of a positive experience in home improvement projects due to its extensive focus on hidden details, and while it may be more expensive, it necessitates substantial investments in resources such as time, expertise, and finances.

Question 5

How much does a handyman make an hour in Arizona?

Accepted Answer

As of October 13, 2023, the average hourly pay for a Handyman in Arizona is $25.12 per hour.

Question 6

How long does it take to get a GC license in AZ?

Accepted Answer

The Arizona Registrar of Contractors is dedicated to timely license issuance, yet they process applications on a first-come, first-served basis, with an average processing time of 20-30 days.

Question 7

How long does it take to get a general contractor license in AZ?

Accepted Answer

You must have a minimum of four years of experience that meets or exceeds the requirements of the license classification for which you are applying.

Question 8

What is the normal markup for a general contractor?

Accepted Answer

Your profit margin as a general contractor, representing the amount remaining after covering all job costs, typically relies on a percentage markup, with the average markup ranging from 7% to 20% or higher.

Question 9

Do general contractors negotiate?

Accepted Answer

When competing for a job, numerous contractors are open to cost reductions or negotiation of specific contract terms, as demonstrated by a recent Angie's List poll in which over 80% of contractors expressed their willingness to lower their prices to secure a project.

Question 10

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

Accepted Answer

In the realm of contracting, it's customary to request a 50% down payment from homeowners at the outset of a project, followed by an additional 25% as a "progress payment" when the project reaches its halfway point, and the remaining 25% upon project completion.

Question 11

What can a handyman legally do in AZ?

Accepted Answer

You must obtain an Arizona handyman license when performing work exceeding $1,000 in value, while tasks such as painting, drywall, and furniture assembly, which fall below the $1,000 threshold, do not necessitate a license.

Question 12

What type of work can a handyman do legally in Arizona?

Accepted Answer

In Arizona, unlicensed handymen have the capability to perform tasks such as installing drywall, assembling furniture, repairing windows, installing doors, and replacing fixtures.

Question 13

What is the job description of a contractor?

Accepted Answer

In broad terms, a contractor is accountable for the comprehensive management of a construction project, encompassing planning, leadership, execution, supervision, and inspection, from project initiation to completion, irrespective of its scale.

Question 14

What is the rule of thumb for contractor rate?

Accepted Answer

Negotiating a contractor pay rate can be straightforward, especially if you have experience in placing direct hires for the same position, as a common approach is to divide the typical annual salary for a direct hire by 2,080 hours.

Question 15

How do I get a general contractor's license in AZ?

Accepted Answer

To apply for a license, follow this checklist: if you're applying as an LLC or Corporation, form a legal entity, choose your classification based on classification requirements, pass required exams (e.g., SRE: GMetrix), submit background checks and copies of government-issued IDs for all persons involved, complete the necessary bond, pay the required fees, and finally, submit your completed application.

Question 16

How do I become a general contractor in Phoenix?

Accepted Answer

To obtain a contractor license in Arizona, follow these steps: first, determine your license type; second, identify your qualifying party; third, take the Arizona Contractor Statutes and Rules Exam and the Trade Exam; fourth, complete a criminal background check; and fifth, purchase your contractor's bond in the required amount.

Question 17

Is it normal for a contractor to charge for an estimate?

Accepted Answer

Business philosophy plays a role, as some companies view a free estimate as a "guess," while a paid estimate is considered a more accurate cost estimation, while others prefer compensation for their estimation work, and some contractors believe that charging for estimates helps filter out clients who are not genuinely committed to hiring their services.

Question 18

What percentage do most general contractors charge?

Accepted Answer

On average, general contractors typically charge approximately 10% to 20% of the total construction costs for a project, with larger general contractor companies potentially charging up to 25% of the project's costs, and the subcontractor's pricing often serving as a key reference point for determining their markup.

Question 19

What is typical contractor overhead and profit?

Accepted Answer

This closely aligns with the industry-standard "10 and 10" guideline, where 10% represents overhead and 10% represents profit; thus, following this rule, the combined overhead and profit, also known as gross profit or margin, would amount to 20%.

Question 20

Why do contractors charge so much?

Accepted Answer

The value provided by a reputable general contractor encompasses exceptional service that significantly enhances the likelihood of a positive experience; quality home improvement services entail substantial investment in intricate details, making them potentially costlier due to the allocation of significant resources, including time, expertise, and financial commitment.

Question 21

What does 25 upfront mean?

Accepted Answer

An upfront payment policy, a standard practice for contractors, freelancers, and service-based businesses, necessitates customers to make either flat-rate deposits (e.g., $1,000) or percentage-based deposits (e.g., 25% of the total estimate) before project commencement or completion.

Question 22

What are typical payment terms for contractors?

Accepted Answer

"Net 10, 30, and 60" represents the prevalent payment schedules for medium-sized construction firms, signifying the respective timeframes of 10, 30, or 60 days during which an owner is expected to settle an invoice after its receipt.

Question 23

Does a handyman need a license in AZ?

Accepted Answer

In Arizona, a contractor license is mandated solely for substantial projects and tasks exceeding $1,000, encompassing both labor and materials, while minor projects valued under $1,000, often referred to as the "handyman exemption," typically do not necessitate a contractor license for handypersons.

Question 24

Can an independent contractor have a job description?

Accepted Answer

When crafting a job description for an independent contractor, the specific content will vary based on the nature of the project, but a valuable starting point can be to research job descriptions for full-time employees in a comparable role.

Question 25

How do I price myself as an independent contractor?

Accepted Answer

Calculate your rates by adding your desired salary and overhead costs, then multiply this sum by your profit margin; subsequently, divide the result by your annual billable hours to establish your hourly rate (e.g., $99,000 ÷ 1,920 = $51.56), and finally, multiply your hourly rate by 8 to determine your day rate.

Question 26

What is the markup for a 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 typically calculated using a percentage markup, with an average markup varying within this range.

Question 27

What can a general contractor do in AZ?

Accepted Answer

General Commercial Contractors (B-1 licenses) enable you to undertake projects of any scale, encompassing large commercial endeavors and small home remodeling tasks, whereas General Residential Contractors are restricted to residential work, including construction, remodeling, or repair projects.

Question 28

Is it hard to get a Contractors license in Arizona?

Accepted Answer

While not overly challenging, becoming a licensed contractor in Arizona typically requires approximately $2,000 for expenses such as books, schooling, the test, and the license fee, which alone amounts to nearly $1,000 for a two-year period, and passing both the contracting and Arizona law tests with scores above 70% is necessary.

Question 29

Can a homeowner act as a general contractor in Arizona?

Accepted Answer

In accordance with Arizona law, property owners are allowed to construct or enhance their property without the need for a license, provided that the property is not intended for sale or rental; however, engaging in either of these activities within one year of project completion constitutes prima facie evidence of intent for sale or rental.

Question 30

Does Arizona allow independent contractors?

Accepted Answer

In Arizona, independent contractors are permitted, and the relationship between an independent contractor and the entity or individual employing them is regulated by A.R.S. 23-1601, with the worker being presumed to be a contractor if the statute's provisions are adhered to.

Question 31

Can I back out of a signed estimate?

Accepted Answer

An estimate, a non-legally binding document, serves as a cost approximation for a project sent from a business to a client, representing an offer that can be withdrawn by the providing small business or rejected by the client, without constituting a commitment.

Question 32

Can you negotiate pricing with contractors?

Accepted Answer

When seeking a contractor, it's advisable to shop around, as many contractors are open to cost reductions or negotiation of specific contract terms when competing for a project, with over 80% of contractors in a recent Angie's List poll expressing their willingness to lower prices in order to secure a job.

Question 33

What is the average overhead for a general contractor?

Accepted Answer

A lower percentage of overhead is generally more favorable for a business, as it translates to higher overall profits, and while the average overhead costs for construction typically hover around 10%, this figure can fluctuate depending on the project's scale, with larger projects often incurring higher overhead, while smaller ones tend to have lower overhead, on average.

Question 34

Can a contractor change a quote?

Accepted Answer

Therefore, businesses and contractors maintain the prerogative to modify their estimates when unforeseen factors emerge, while in some cases, they will furnish a final invoice that elucidates the discrepancies in costs incurred.

Question 35

What to say when a contractor asks what is your budget?

Accepted Answer

When your contractor requests your budget, it's essential to be candid, especially if the project entails their presence in your home for an extended period, to ensure you receive guidance aligned with your financial and aesthetic objectives.

Question 36

What should a contractor's estimate include?

Accepted Answer

In an estimate, include a job description detailing the work to be done, a breakdown of materials and labor costs, an accurate total project cost calculation, and prominently display sales and company contact information.

Question 37

Should contractors give you an itemized estimate?

Accepted Answer

In summary, always request an itemized contract for construction projects to save time, reduce potential complications, and facilitate effective price and quote comparisons during the bidding process.

Question 38

How do you negotiate a contractor job?

Accepted Answer

To enhance your earning potential in contract negotiations, avoid initially stating your desired rate and instead start with a slightly higher figure, typically around 10 percent above a rate you are willing to accept, while remaining mindful of industry-standard rates to inform your approach.

Question 39

Why are contractors so hard to deal with?

Accepted Answer

Contractors often grapple with a heavy workload, juggling multiple projects simultaneously, which can impede their ability to promptly address emails or phone calls; furthermore, they may prioritize on-site work over administrative duties such as responding to emails or phone calls.

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