Structure your dream house can rapidly become a problem of unmet schedules,cost over runs,shabby workmanship and limitless arguments.

I have been closing and originating construction loans for numerous years now and I have experienced clients dumping contractors and even contractors dumping clients. By that time in many cases the task is running behind schedule and over budget. Choosing a new professional at this phase is challenging and additional hold-ups are inevitable.

Investing a bit more time and paying a bit more attention to the procedure of choosing your professional can avoid all this.

For the most part the writing is on the wall from the start,but wishful thinking gets in the way of logic,which results in catastrophe down the road. A great variety of posts have been written on the subject,and you should try reading a minimum of a couple of well prior to making your selection of a contractor.

This post is based upon my experience and individual observations. You may wish to write the main points down and add others that I have not covered and certainly contribute to the list from your own experience of handling people. This way you will internalize the subject and end up being a naturally better judge of those you do business with. If you reside in Orange County California like me andand also you need a professional in business construction,try here for general construction including seismic retrofit and truss repair :

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Throughout the processing of your construction loan,some info is gathered from the professional but that should not stop you from your due diligence. Here is a list of products to check and to keep an eye out for:
1- If your state requires a state license,ask for the number. Don’t stop at that. Call the pertinent state board and check on the license’s status. You don’t understand who controls contractors in your state? Ask Him/Her. And take notice of the reaction.

There is no need to be shy. A honest and legitimate businessman will have no problem offering the info. We are involved in a highly regulated service and we proudly provide the pertinent info along with phone numbers and links to the state bodies on our About Us page.

2- Ask for references. Pay attention to the reaction. Too mindful a reaction is a sign of uncertainty.

3- Are you developing a home from the ground up? Ensure the professional has actually built a total job in the past. Experience counts; a ground up construction or a major remodel is an extremely various animal from room and bathroom additions.

4- Visit his/her place of business. Not all contractors have a workplace,but you need to make certain you are not handling a unreliable operation.

5- Your construction loan bundle will consist of paper work for the professional to finish. How does he manage that? The following is a list of bad indicators. Doesn’t have the time to finish the lender’s line item cost breakdown and demands using his own. Doesn’t comprehend why the lender needs to be asking for credit references. Doesn’t see why the construction loan lender should need to see the construction contract? Insists that in his experience non of the above are needed and that this lender don’t understand anything about construction loans.

6- Be careful of the professional who chooses to provide a “complete bundle” rate. No construction lender will accept that and neither must you. The line item cost breakdown does not have to be completed on every line,but the more the merrier. Read it carefully,it will determine the quality of the house you end up with.

7- Demand a product’s list. You don’t need the professional who doesn’t have the time for this. Some loan providers don’t need this and when they do little attention is paid to it. Insist on a total list of all products and components. Go to the showrooms,choose them and note your options by make,brand and/ or quality. This list should be signed by the professional and you and be made a part of the contract. Stating “A great kitchen area will cost a number of dollars per foot” doesn’t indicate much when you go to the display room at the end of the job just to learn that you dislike what the construction loan budget has actually permitted.

8- As a part of the construction loan procedure the professional will be asked to provide proof of Liability Insurance as well as proof of Workman’s compensation. If he/she does not directly employ anyone,he/she may very well not have Workman’s Compensation Insurance. Grievances about Liability Insurance are a sure sign of trouble.

9- As material expenses are rising,payment of deposits on some shipments may be needed by suppliers and some construction loans will allow that. Be aware of the professional who asks for up front cash.

10- Construction loan dispensations are made in phases. Never ever pay a contractor prior to your regional county or city inspector has actually approved that phase. The lender’s inspector just verifies portion of completion not compliance,so his approval does not indicate that your regional authorities will also sign off.