Know Your Rights When Dealing With Home Builders

"The biggest mistake is not doing your research on the front end," attorney Paul Sheridan said.

Before hiring a builder, talk to people who live in homes that person built.

"You have a great database right there in front of you. Literally walk up and down the street," Sheridan said.

You can also look up inspection reports on those homes.

"Find out what subcontractors he uses. Find out what suppliers he uses and contact the suppliers to make sure he's paid his bills in the past, timely pays his bills and that money wasn't an issue," Sheridan said. Another red flag is a big down payment.

"A builder that needs all his money upfront or a large portion of the money upfront is somebody that should be questioned," Sheridan said.

Sheridan also suggests making sure the contract is specific, including how much is "allowed" for things like flooring, cabinets and appliances. Plus, be involved.

"The homeowner has the greatest interest in the way the house is being built. Don't just leave it to your general contractor to get it done right. Visit the house as often as you can," Sheridan said.

That way if there are problems, you can fix them along the way.

According to attorneys, another issue to keep in mind is water. Walk around the property you are considering. If it is the lowest house in the neighborhood, water will probably flow toward it. A peaceful creek can turn into a mini-river with a heavy rain.