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Builder contract for new house

Dear Ms. Builder: My husband and I just finished our plans for our new 2,500 sq. ft. house. We have heard many horror stories about contractors leaving without finishing the job. How can we protect ourselves? - Meg H.

Dear Meg: Although the vast majority of contractors are reputable and trustworthy about completing a satisfactory job, you are wise to plan initially. We all have seen the stories on the 6:00 news of some poor widow standing by a half-completed house and the contractor has absconded with her life savings.

As with any work you are having done, check with the Better Business Bureau and with other homeowners that the contractor has worked for. Make sure to see the actual homes and meet the homeowners. Do not accept just a list of two or three satisfied customers' telephone numbers.

Be wary if a contractor asks for a large deposit. Most successful contractors should be financially able to purchase the materials. If they are so tight on cash that they must demand large initial payments, this is not a good omen of things to come.

You do not pay your hairdresser before your styling is done. You normally do not pay for your dinner at a restaurant before the food is served and you found it to be edible. Your contractor should be the same.

It is usually a wise investment of several hundred dollars to have your attorney review your construction contract. Also make sure the building plans are completely finished and all of the construction specifications are detailed before signing the contract.

Some state laws allow contractors to request a deposit at the time the contract is signed. There are legitimate payment requests by a contractor. If you select custom cabinets or fixtures that are not returnable, then the contractor may reasonably ask for some cash to cover the cost of these unique items.

If your contractor requests a cash advance before starting the job or at various stages, ask how the amount is determined and what it is for. People sometimes end up advancing more money than is needed at various stages of construction.

In your contract, you may agree to pay biweekly or monthly for work that is satisfactorily completed. If you choose this approach, have the contractor included a cost breakdown of the various stages of construction. This will help you to gauge if the regular payment amounts are reasonably.

The following is a typical percentage breakdown of the costs to build an average house. You can use these numbers, as many financial institutions do, to gauge the amount of the costs at various stages. The numbers add up to 100%: excavation - 2%, sewers/septic - 3%, footings - 2%, foundation - 13%, floor joists - 4%, subfloors - 2%, stud walls - 2%, wall sheathing - 2%, roof rafters - 4%, roof sheathing - 2%, roof shingles - 2%, windows/doors - 3%, siding/brick - 4%, room partitions - 3%, plumbing

- 9%, electrical - 4%, heating/air cond. - 6%, insulation - 1%, drywall hanging/finishing - 6%, basement floor - 2%, hardwood floors - 1%, interior trim - 3%, interior doors - 2%, cabinets - 2%, appliances - 1%, kitchen/bath flooring - 2%, indoor/outdoor paint - 2%, interior decorating - 2%, carpeting - 2%, garage - 1%, gutters/downspouts - 1%, driveway/sidewalks - 3%, landscaping - 2%.

Don't feel embarrassed to discuss the payment schedule with your contractor. If he or she is reputable, they will not be offended by your concerns. They will probably be impressed that you have done your homework and may be more careful. Visit the building site often, even if just for a couple of minutes to show you are watching.

Send your questions to Ms. Builder, 6906 Royalgreen Dr., Cincinnati, OH 45244 or visit www.dulley.com/msbuilder.