When it comes to any construction project, the five worst words a banker can hear are “We changed that this morning,” says Tim McNamara, vice president-capital markets at AgStar Financial Services in Apple Valley, Minn. That’s how cost overruns can occur.

“To help minimize that problem, we require construction agreements,” he says. A construction agreement must be signed by the builder, the owner and the lender. The agreement states that before a change can be made to the project, all three parties must agree. Doing this, says McNamara, helps everyone think through each decision to determine if the change is really the best solution.