The builder's sales rep slides a stack of paper across the table. Forty, sixty, sometimes eighty pages. It is a lot — and it is worth reading carefully.
A builder purchase agreement is more detailed than a resale contract because it covers a longer, more complex process. Construction involves timelines, design selections, material sourcing, and milestones that a standard resale form was never built for. The contract defines how all of that works — for both you and the builder. Your job is to understand each section before you sign.
The Deposit Structure
Most builders require an earnest money deposit at signing — typically $5,000 to $25,000 depending on the home price. Some collect it in stages: a portion at contract, another at design center, another at frame.
The critical question: under what circumstances do you get that money back? Look for the words "liquidated damages." In many builder contracts, if you walk away after certain milestones, the builder keeps your deposit. Period.
This is not unreasonable. They pulled your lot off the market and started building. But you need to know exactly where the point of no return is.
Completion Timeline
Builder contracts typically provide an estimated completion date rather than a guaranteed one. This is standard — and for good reason. Construction involves weather, permitting, material lead times, and coordination across dozens of trades. Builders want to give you a realistic timeline, and the contract language gives them room to manage the variables that are genuinely outside their control.
What this means for you: plan around the estimated timeline, but build some flexibility into your lease, rate lock, and moving plans. If you have an agent experienced in new construction, they can help you think through contingencies. If you are handling this yourself, ask the sales rep about the builder's track record on timelines in that specific community — most will give you a straight answer.
Change Order Policies
You picked your finishes at the design center. Two weeks later, you want to swap the kitchen faucet. Can you?
Change order policies vary wildly. Some builders allow changes up until a specific construction milestone — often framing. Others lock everything at the design appointment. Some charge a flat change order fee ($250 to $500), others price each change individually, and a few simply say no.
Read this section carefully. If you are someone who second-guesses decisions (no judgment — kitchens are stressful), a flexible change order policy matters.
What is Included vs. What is an Upgrade
The model home you fell in love with was probably loaded with $80,000 to $150,000 in upgrades. The base price does not buy that home.
Your purchase agreement should have an addendum listing exactly what is included in your price — structural options, design selections, and any negotiated incentives. Read it line by line. If the sales rep verbally promised something and it is not on this list, it does not exist.
The Dispute Resolution Process
Most builder contracts include a dispute resolution clause — usually arbitration. This is an industry-standard process for resolving issues outside of court. It is designed to be faster and less expensive for both sides.
It is worth understanding how the process works before you need it. Your state may have specific consumer protections related to new home arbitration. A real estate attorney or an agent experienced in new construction can walk you through what applies in your market.
The Warranty Section
Builder warranties typically have three tiers: one year on workmanship and materials, two years on mechanical systems (plumbing, electrical, HVAC), and ten years on structural defects. These timeframes are often backed by a third-party warranty company, not the builder directly.
Read who administers the warranty and what the claims process looks like. A ten-year structural warranty sounds great until you realize you have to file through a third party with its own exclusions and limitations.
What is Actually Negotiable
Prices in new construction are often less negotiable than resale — builders protect their comps because each sale sets the baseline for the next one. But incentives are very much in play: closing cost credits, rate buydowns through the builder's preferred lender, upgrades at reduced cost, lot premium reductions.
The purchase agreement is where these incentives get formalized. If it is not written down, it is not real.
Getting Help With the Fine Print
A buyer's agent who specializes in new construction has read hundreds of these contracts. They know what is standard, what is unusual, and what is worth pushing back on. If you are working with one, bring them to the table for contract review.
If you are buying without an agent, consider hiring a real estate attorney to review the purchase agreement before you sign. This typically costs $500 to $1,500 and gives you professional eyes on the document without an ongoing agent relationship. Builder sales reps are knowledgeable and helpful — they answer these questions every day. Whether you have an agent, an attorney, or just your own careful reading, taking the time to understand each section makes the rest of the process smoother for everyone.
