The most important decision that you will make when you build your new home is which contractor you will choose for the job. A lot of people like to use the phone book for this job, but going a little deeper than that and putting a little more effort into choosing your contractor will end up saving you a lot of headaches and money.

Using the phone book to find the contractor you want is not entirely a bad idea. For someone moving to a new area, it is often one of the most feasible options. Having the ability to ask friends or neighbors about a good contractor is usually not available when you move to a new area, so you need to take some precautions when looking in the phone book for a contractor.

Get at least three bids from three different contractors to build your property. Make sure they all get the same blueprints and look at the offers in comparison to each other. If one offer is significantly lower than the other two, this is usually a sign of desperation for work (not always a bad thing) and inexperience. Do a little research on the contractor that bid the lowest price and check up on his references.

Giving someone who is well experienced and desperate for work is always a good idea, as long as you are sure that they are a good fit for you. Make sure you can live with this contractor being in your life for a few weeks or months. You need to have a good relationship.

As far as the contract that you will have, you should almost always go with a fixed price contract. This means that if there are unexpected costs that come up, the contractor will take care of them, not you. Building materials may change in price or the price of labor may go up and if you sign a time and materials contract, you will be responsible for making up for these new costs.

When writing up the contract, be specific. The date the project will begin and approximate date that it should be done needs to be in the contract. Make up a list of materials that you want to be used in the home. If you want 12 inch by 12 inch travertine tile, specify this. As with any important financial decision in your life, the devil is in the details.

Give your contractor an incentive to get the job done right and done early by offering a bonus if he does so. On the same token, do not be afraid to threaten a penalty if the project is done badly or finished late. All contractors should give you a warranty on their work that should be for at least 10 years.