Questions to Ask Before You Sign a Builder Contract

Buying a new build feels simpler than buying a resale. There is a model home, a price sheet, and someone pleasant at a desk who can answer most things. What is easy to miss is that the paperwork is not the contract you would sign on a resale, and the person at the desk works for the builder. Neither of those is sinister. They are just facts worth knowing before you sign, because the terms are set in the builder's document and most of your leverage exists before you put your name on it.

You are not signing the standard resale contract

Most existing-home sales in North Carolina run on a standard form that buyers and sellers across the state use, with a familiar due diligence period and familiar remedies. Builders generally use their own contract instead, drafted by their own counsel, and the differences are not cosmetic.

Read it as a different document rather than skimming for the parts you recognise. Pay attention to how and when you may terminate, what happens to your deposit if you do, how disputes are resolved, and what the builder is committing to on timing and specification. If there is an arbitration clause or a limitation on warranties, you want to know that before signing, not when something goes wrong.

This is the point in the process where having an attorney read the contract earns its fee several times over. On a resale, an attorney typically enters at closing. On a new build, the contract is where the risk sits.

What is the deposit, and what makes it refundable

New-build deposits are often larger than the earnest money on a resale, and the terms are usually less forgiving. Ask three plain questions: how much, who holds it, and under exactly what circumstances do you get it back.

Pay particular attention to whether the deposit is still returnable if your financing falls through, if an inspection finds something serious, or if the house is finished far later than promised. Some contracts protect the buyer in those situations and some do not. Also ask what happens to money spent on upgrades and options, which is frequently treated differently from the base deposit and is often not refundable at all.

Completion dates, delays, and what you can actually do

Almost every builder contract contemplates delay. The question is what the document gives you when it happens. Look for whether there is a firm completion date or only an estimate, what causes are excused, whether there is an outside date beyond which you may terminate, and whether you have any remedy at all short of walking away.

This is not academic if you are selling a home or ending a lease to make the move. Line the two timelines up before you commit, and build in more slack than feels necessary. Our guide to buying and selling at the same time covers how to keep both ends from pinching, and interest rate locks have their own expiry dates, which is a conversation to have with your lender rather than the sales office.

What is actually included in the price

The model home is furnished, upgraded, and landscaped to sell. Ask for a written specification of what the base price includes, and then go through the model asking which of what you are looking at is standard.

Allowances are where budgets quietly break. A flooring or lighting allowance is a sum the builder has budgeted, and anything you choose above it is yours to pay. Ask what each allowance is and whether it buys what you would actually pick. Ask how change orders are priced once construction starts, and when the window for changes closes, because it is usually earlier than buyers expect.

Then ask what is not in the contract at all: fencing, blinds, screens, gutters, final grading, sod and irrigation, driveway width, mailbox, appliances. Lot premiums, and any road, utility, or association fees charged at closing, belong on the same list. None of this is a trick, but added up it is real money and it is better on a sheet of paper than in a series of surprises.

You can still inspect a brand-new house

New does not mean faultless, and no building inspection by a local authority is a substitute for someone working on your behalf. You can hire your own inspector, and on a new build the useful pattern is more than one visit: once before the walls are closed up, when framing, wiring, and plumbing are still visible, and again before closing.

Ask what warranty comes with the house, what it covers, for how long, and who honours it. Ask how the pre-closing walk-through works, how the list of items to be corrected is recorded, and what happens to anything still outstanding at closing. Getting that in writing is ordinary practice and reasonable to ask for.

The sales agent represents the builder

The person in the sales office is usually pleasant, well informed, and working for the builder. That is their job and there is nothing wrong with it, but it means their obligation runs to the seller, not to you. Anything you tell them about your budget or your timing is told to the other side of the negotiation.

You can bring your own agent, and in most cases the builder has anticipated it. The one thing to know is that you generally need to be represented from your first visit, because many builders will not recognise an agent introduced after you have registered on your own. If you are considering a new build, that is the single most useful thing to get right early. Our page on bringing your own agent to a new build explains how it works, and you can see what is being built around Denver as a starting point.

If you would rather not have an agent, that is a legitimate choice too. Just make it deliberately, with the contract read and the questions above asked, rather than by default because the model home was lovely and the paperwork was already on the table.

This is general information, not legal advice; confirm specifics with your agent or a real estate attorney.

Gonzalez Realty is an Equal Housing Opportunity firm. We do not discriminate on the basis of race, color, religion, sex, handicap, familial status, or national origin.