Things that you should do to check references on your builder.
When checking on your builder make sure you check out the company, the owner and the salesman. Google them by name and see if you find anything. It is really easy to change a company name, it is a little harder to change a personal name. Chances are good that if someone has had a bad experience with the builder they have posted a site like this one.
Check with others who have built with this builder before. You should be checking things like completion dates, missed deadlines and quality.
Check with suppliers. Places like hardware stores, plumbing suppliers, window manufacturers. Ask for a list of suppliers from your builder, if the majority of them are not local chances are good that he has left unpaid bills behind at the locals.
Check with the BBB. it is mostly a waste of time as the only way the BBB gets involved is if someone has already reported them and from my understanding BBB sends the company a letter and if they can justify their actions either in lie format or truth the complaint gets dropped.
Make sure your house is registered with the warranty company. It is not good enough for your builder to be a member of the warranty program. This MUST be done after the initial small deposit and before the first draw.
Make sure your deposits/draws are insured should your builder vanish. DO NOT take your builders word for it, contact the insurance company and get proof of insurance.
After the house is started talk to the workers. If they are unhappy with the builder chances are good that you are not getting quality that you are paying for.
Have regular meetings with the building inspector, they can tell you if things are going wrong.
Things to watch for.
If your builder is playing divide and conquer with you and your spouse he might be a bad builder.
If your builder is defensive about his word not being good enough you might have a bad builder.
DO NOT be lazy. It is a very stressful and hectic time, but it is worth the effort to look into these things before you get too far in.
If you discover that your builder is a bad builder go back to your contract and hold the line regardless of the pressure the builder is going to put on you to pay them. If the next draw is lockup make sure you are to lockup... If your contract is not explicit as to what the stages are, now is the time to get them defined. If they are asking for money they are more likely to be willing to add the stage payment definitions to the contract. They should have been there to begin with.