Work that home builders conduct on the parcel of land that you recently purchased to build your dream house on can make or break your residential real estate plans. Pick the wrong contractor to build your new house and you could end up paying thousands more for your house.

Stay out of real estate trouble

At the truly bad end, if you cut a deal with the wrong home builder, you could find yourself center of a local, regional or national real estate scam. Watchfulness can help you to avoid getting scammed. Beginnings of watchfulness start with asking around about home builders and contractors who you are thinking about working with.

Another way to steer clear of real estate home builder scams is to familiarize yourself with signs that a home builder might be shady. Although there may not be a list of all the scams that shady home builders could run, below are a few signs that a home builder may not operate to the letter of the law:

  • Lack of permit – It may not be enough for the contractor who’s building your new house to have a general construction license. To perform certain types of work on your house, a contractor might need one or more permits. Types of permits that your city or state government might require include electrical, gas, heating or cooling permits. These permits might be needed to enlarge, replace or repair appliances or entire parts of your new house.
  • Bad history – Shady contractors may have a history of performing below par work on new houses that they work on or repair. One way to tell if a contractor has a bad performance history is to check construction performance review websites. You could also check with professional construction and home builder networks and ask for feedback on a contractor that you’re thinking about working with.
  • Ongoing problems – If a contractor keeps finding problems as they build your house, you could be getting scammed. This type of contractor might be in the business to turn a fast profit, not to serve clients.
  • Conflicting stories – Repeatedly changing stories about defects and problems at the property might signal that a contractor is being dishonest.
  • Payment before work begins – Avoid paying a contractor in full before she starts working on your new home.
  • Keep away – Shady home builders might encourage you to stay away from your own property until after they finish building your house. Because it’s your property, stop by and check on work that home builders perform throughout each stage of the home building process.

Don’t let a bad home builder wreck your dream home

Wrecking your dream house isn’t the only thing that a bad home builder could end up doing. A bad home builder could damage your exterior property, making it that much harder for you to restore your real estate investment. Even more, a bad home builder could involve you in a real estate scam that could have a regional or national reach.

Because a shady real estate contractor may do everything in his power to keep you from discovering what he’s really up to, it’s on you to research contractors that you’re considering working with. Check with government agencies, review forums and professional real estate networking organizations.

Ask for first person referrals or feedback on the contractor. Don’t just take the contractor’s or the home builder’s word. Also, avoid getting conned by glossy construction websites. Trust your gut and take your time while researching and choosing a contractor to build your dream home.

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