If you check references, you might be surprised by what you hear. Without the builder around, you can ask important questions regarding quality of work, on time delivery, how easy it was to deal with the builder, etc.
Get in your car and go view the previous work.
Actually, viewing previous jobs can tell you a lot about how your project will look after the fact. If a retaining wall is bowed or cracked after two years, that may be how your project turns out.
Make sure your agreement is in writing and covers all important points.
It is surprising how many expensive projects are done on a piece of paper on a truck hood. It is important to be forward thinking about potential problems. You must establish deadlines and completion metrics. What type of materials are going to be used? Who decides?
Hire a lawyer.
If the project warrants it, you may want to get a real estate attorney to help negotiate and write the agreement between you and the builder. Paying an attorney a few hundred or a few thousand dollars may help save money on the backend.
Ensure materials have been paid for.
Ensure that all materials are paid for prior to them going on to your property, if the builder does not pay for the, lets say the lumber, then the supplier will likely put a lien on your property and demand payment. Clearly, you do not want to pay someone twice for the supplies.
Subcontractors need to be paid.
Ensure that you know of any subcontractors that will be used and ensure they are paid for their work. Again, you do not want to pay someone twice for the same thing.
Pay as you go.
Ensure payment terms are such that they require work to be performed in order to receive payment. Only hand over money that you are prepared to lose, because you just might. You want to have the builder to have an incentive to work, not just take your money. On the other hand, do not be so tight as to appear that you are not going to pay.
Do your job as the property owner.
As the customer, you need to pay on time and only make necessary changes. If you make changes, you need to get those changes in writing, signed by both parties, clarify whether there is any additional cost and how it will affect the due date. No matter how bad it gets, try to stay calm. If a dispute arises, emotions may boil over and as a result make both parties look bad.
Take pictures or video of the before, during and after.
A picture is worth a thousand word and should the relationship end up in court, a nice video or picture display to the judge can really help a case.
Keep all paperwork.
Demand receipts and a written change order signed by both parties detailing any changes and the associated costs. Nothing is worse than knowing you had paperwork to support your case, but you cannot find it or know the other side has the only copy.