In general, if you are more specific in defining your dream home, then the more accurate your estimated costs will be… and the fewer costly change orders will be necessary. Carefully review plans and specifications to minimize change orders. Use checklists to analyze the plans against your lifestyle and convenience needs. Get a quote from several builders. The more detail you have, the more sure you can be that you are comparing 'apples to apples'.

· Start with the base home price and standard specifications.

· Make sure the builder lists any contingencies that may increase the cost to you.

· Specify any upgrades or products and features that you want.

· Specify the timeframe for completion.

Vagueness and relying on verbal information and pricing from the salesperson and other staff members can be an extreme source of future frustration and disappointment. Get everything in writing.

Other points to negotiate with your builder:

· Change Orders: After construction has begun, changes or change orders will often be necessary or desirable. Insist that each change order be documented on paper, with the cost, and signed by the builder. This will eliminate many of the verbal miscommunications or misunderstandings between the builder's staff and customer.

· Progress Payments: Many builders require progress payments during construction. Insist that all construction draws to be co-approved by you and the bank. This is your guarantee that the builder does not get the draw until the work meets with your approval. Your lender should make out the progress payments ('draw checks') to both you and the builder. This gives you leverage over the construction process.

· Lien Waivers: Make sure the builder requires subcontractors to sign a lien waiver, once they have been paid for their work on your home. Ask for copies. This prevents a subcontractor from placing a lien on your home for unpaid work.

· Allowances: Builders usually provide an "allowance" for kitchen, flooring, etc. For example, if there is an $10,000 allowance for carpeting and the homeowner chooses carpeting that costs more, the homeowner will need to pay the difference. If the carpet selected costs less, the money is reimbursed to the homeowner. During negotiations, visit the showrooms of the designated suppliers and determine whether you can work within the allowances. Often, the subcontractor will "upsell" you to a higher quality item, and you will pay the difference. Better builders give the homeowner a "homework list" that details what types of fixtures and appliances they will need to decide upon as a guideline and a starting point for their research and decision-making.

· Who Is In Charge: Who makes the decisions? Whether it is both spouses, or one, it should be clear. And if a couple makes decisions jointly, the builder should respect that arrangement.

· Warranty: What type of warranty does the builder offer, and how long is it in force?

· Final Contract: It may be worth having a trusted attorney review the contract and explain it to you. Remember that attorneys are trained to find potential problems. You must manage them, or they can kill a good deal. If you use an attorney, be sure to ask him or her to identify the 2 or 3 major issues to negotiate. Focus on understanding these issues, and ignore all of the minor points that the attorney brings up. These minor points can become needless points of disagreement between you and the builder. It is important for you to know what to expect from the builder, what he expects of you, and what you are each liable for before you sign anything. This should be the goal of the final contract review.