Check out builder's background before you sign

Selecting a home builder? Then you might be able to spareyourself a peck of problems by thoroughly researching the builder'sbackground before you commit.

"There's no such thing as a consumer who is too cautious inselecting a home contractor. Getting the wrong one can be theequivalent of falling into a pit full of snakes," said DouglasBregman, author of books on real estate.

If the builder's workmanship is poor, your home could haveserious structural problems. If he's unreliable, the job could takefar longer than planned.

At the very least that could inconvenience you. A delay couldalso force you to make expensive temporary housing plans while youwait for your new home.

"There's a lot of room for precaution," said Jay Lenrow, a realestate attorney.

Regrettably, the recession-era downturn in home constructionmeans more reasons for sweaty palms, real estate specialists say. Anumber of builders are on the brink of bankruptcy, and some alreadyhave gone under.

What would happen if, midway through the construction process,your builder failed? Then either the home's ultimate completion orthe return of your deposit money could be called into question.

Of course, you always can take your builder to court. Buttrying to win a court case against a financially ruined builder iscertainly no fun. Better to find a good builder from the outset thanto wrangle with a bad one later.

Screening builders can be a difficult process, said William C.Young, head of consumer affairs for the National Association of HomeBuilders.

Furthermore, trying to check on a builder through a localgovernment consumer affairs office or Better Business Bureau oftenyields little information of value.

"All they can tell you is the official opinion. They have to bevery careful. They can't tell you anything that's not on therecord," he said.

While you'll never be able to gain perfect knowledge of abuilder and his finances, real estate experts suggest these ways oflearning what you can:

Create a short list of builders worthy of consideration.

Friends and associates who've had a good experience with aparticular builder are your best bet for recommendations.

Local architects often know which builders are good.

Seek references for builders on your short list.

The idea here is not to let the builder pick and choose thenames. A hand-picked list probably will exclude those who might havebeen unhappy with the builder's work. Rather, request from acustom-home builder a complete list of homes he's finished in a givenperiod.

Be prepared for resistance from some builders in your quest fora complete list. Young said builders are sometimes reluctant to giveout customers' names on the grounds that the customers wouldn't wanttheir privacy violated. They might want to call ahead to getcustomers' permission.

Visit any subdivisions already done by a builder who doessubdivision work.

It's best to make such a visit on a Saturday or some other timewhen people probably will be out in their yards or readily accessiblefor conversations.

Don't be afraid to question those living in the developmentabout their experiences with the builder.

Ask open-ended questions: "Did the builder do a good job?" "Wasthe house well-designed?" "Did it meet your needs?" "Were there anysurprises?" "If you had it to do over again, what would you dodifferently?"

Ask for a financial statement from the builder.

"One of the ways builders get in trouble in times of economicdownturn is by taking money from a current customer to pay bills foranother job," Lenrow said.

It's naive to think most builders - who operate privately heldcompanies - will be pleased to provide such reports, Young said.

Look to public records to learn about your builder's background.

Go to the local courthouse and find out if lawsuits are pendingagainst the builder or whether judgments have been brought, Bregmansaid.

Educate yourself on home building.

One paperback that could prove valuable is Dreams to Beams: AGuide To Building the Home You've Always Wanted. Published inconnection with the National Association of Home Builders, this121-page paperback discusses selection of a home contractor as wellas other related topics.

The book can be obtained for $9.95 plus $3 shipping and handlingby writing Home Builder Bookstore, 15th & M Street, N.W.; Washington,D.C. 20005. Or call (800) 368-5242.