Don't hire an unlicensed contractor.

Don't hire a contractor without first shopping around.

Don't pay cash.

Don't sign anything until you completely understand it and agree to the terms.

Don't act as an owner/builder, unless you are very experienced in construction.

Don't make agreements with subcontractors or workers without consulting the prime contractor.

Don't make a down payment that exceeds the legal limit (10% or $1,000, or 2% or $200 for swimming pools, whichever is less).

Don't let your payments get ahead of the contractor's completed work.

Don't hesitate to ask questions of the contractor.

Don't make final payment until all phases of construction have been completed according to the terms of the contract.

Plan your project carefully.

Shop around before hiring a contractor.

Get at least three written bids on your project.

When requesting bids, provide all contractors with accurate plans or drawings that will enable them to determine the scope and cost of work.

Check with the Contractors State License Board to make sure the contractor is properly licensed, and to check the status and disciplinary history of the license.

Check out contractors with your local building department, trade associations or unions, consumer protection agency, and the Better Business Bureau.

Get references for previous projects the contractor has done, and follow up on them. Look at work and ask if the homeowners were satisfied with the results.

Consult with more than one lending institution regarding the type of loan to obtain.

Pay only 10 percent of the project price or $1,000 as a down payment, whichever is less, and make sure your contract provides for a "retention."

Make sure everything you and your contractor have agreed to is included in your contract,and don't sign anything until you understand and agree with all terms.

Ask your contractor about inconveniences that may occur, and plan accordingly.

Keep a job file.

Take precautions to prevent mechanic's liens from being filed against your property and ask for lien releases from subcontractors and materials suppliers.

Make frequent inspections of the work, including a final walk-through.

If problems or disagreements occur, try first to negotiate with the contractor.

The contractor's name, address, and license number and the name and registration number of any salesperson who solicited or negotiated the contract.

The approximate dates (not number of working days) when the work will begin and be substantially completed.

A description of the work to be done, a description of the materials and equipment to be used or installed, and the price for the work.

A schedule of payments showing the amount of each payment in dollars and cents.

A Notice to Owner regarding the state's lien laws, and the rights and responsibilities of an owner of property.

You can't verify the name, address and telephone number or credentials of the contractor.

The contractor gives you a toll-free phone number and a post office box as his or her address.

The salesperson tries to pressure you into signing a contract by using scare tactics, intimidation or threats. (If you are pressured into signing, remember you usually have three days to cancel a contract.)

The company or salesperson says your home will be used for advertising purposes (as a model job, or show-house, or by display of their sign), and that you will be given a special low price.

The contractor tells you this is a special price available only if you sign the contract today.

The contractor doesn't comply with your request for references, or the references have some reservations about the contractor's work.

You are unable to verify that the contractor is licensed, insured, and/or bonded when required.

You are asked to pay for the entire job in advance, or to pay cash to a salesperson instead of writing a check or money order to the company itself.

You are asked to sign a completion certificate for the job by appeal, threat, or trick, before the job is properly completed.