1. Ask your builder for references-lots of them. Then take the time to call these people.
  2. Check to see if your builder builds home within the city limits of where you live. City inspection departments often have more stringent requirements which marginal builders will avoid. County inspection requirements (if there is a county inspection department at all) are generally more lax. A builder who does not build inside the city limits may do so for this reason.
  3. Ask to see proof of liability insurance. Make sure the policy will extend through the time it takes to complete your construction. Insist that the policy limits exceed the entire contract value of the house you are building. Policies issued or underwritten through Zurich Insurance Company have been especially problematic in the past.
  4. Call the Alabama Home Builders Licensure Board. They have lists of complaints filed by consumers. While the Licensure Board will not tell you any details about the complaints, any builder who has complaints against him at that level should be viewed with more scrutiny.
  5. Refuse to sign an arbitration clause. Any builder who insists on an arbitration clause should be viewed with great scrutiny. No one thing prevents more homeowners from being able to make a builder accountable for their mistakes than an arbitration clause.
  6. Throughly read your entire sales/construction contract before signing.  This is a situation that you can contact your own attorney and make sure that the contract is in your best interest. (see post : What do I need to know about my sales/construction contract? )
  7. It building a home, make sure there is a change order provision in your contracting, requring the signature of both you, the homeowner, and the builder and make sure you have a copy on file of all the change orders that you sign.  This way at the end of the construction you are not blindsided by a bill for things that the builder says you verbally requested. 
  8. DO NOT SIGN A LIMITED WARRANTY.  Under Alabama law, a homeowner has six years in which to file a claim against a builder.  Builders have begun trying to hide behind limited warranty and claiming they are good for the homeowner, when in fact they are an attempt to limit the builder’s liability and the rights of the homeowner.