Construction Loans for New Home, Remodeling, Lot purchase and Permanent Finance For Residential Properties

Building your dream home can quickly turn into a nightmare of unmet schedules, cost over runs, shabby workmanship and endless arguments.

I have been originating and closing construction loans for a good number of years now and I have experienced clients dumping contractors and even contractors dumping clients. By that time in most cases the job is running behind schedule and over budget. Choosing a new contractor at this stage is difficult and further delays are inevitable.

Spending a little more time and paying a little more attention to the process of choosing your contractor can avoid all this.

In most cases the writing is on the wall from the very first day, but wishful thinking gets in the way of logic, which leads to disaster down the road.

A good number of articles have been written on the subject, and you should try reading at least one or two well before making your choice of a contractor.

This article is based on my experience and personal observations. You may whish to write the main points down and add others that I have not covered and indeed add to the list from your own experience of dealing with people. This way you will internalize the subject and become a naturally better judge of those you do business with.

During the processing of your construction loan, some information is collected from the contractor but that should not stop you from your due diligence. Here is a list of items to check and to look out for:

1- If your state requires a state license, ask for the number. Don’t stop at that. Call the relevant state board and check on the license’s status. You don’t know who regulates contractors in your state? Ask Him/Her. And pay attention to the reaction.

There is no need to be shy. A legitimate and honest businessman will have no problem providing the information. We are involved in a highly regulated business and we proudly provide the relevant information 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 quick a reaction and fast talk is probably a lie and a bluff. Too cautious a reaction is a sign of uncertainty. In any event write the names and numbers down and do call them. Go see them. Most people will actually welcome you simply to show off their achievement.