Buying New Construction: What's Different
Walking through a model home is exciting, but buying new construction is a fundamentally different process than buying a resale home. The contracts are different, the negotiation dynamics are different, and the timeline is different. Buyers who walk in expecting the same experience they would have with a resale home often make costly mistakes.
The Builder Contract vs. a Standard Purchase Agreement
When you buy a resale home, you typically use a state-standard purchase agreement that is relatively balanced between buyer and seller. When you buy from a builder, you sign the builder's contract — a document written by the builder's attorneys to protect the builder. These contracts are often 20 to 40 pages long and heavily favor the builder. They typically give the builder the right to make material substitutions, change the floor plan slightly, extend the closing date, and retain your deposit under a wider range of circumstances than a standard contract would allow. You should have a real estate attorney review the builder's contract before you sign. Many buyers skip this step because they assume a big-name builder's contract is fair. It is not. It is a legal document designed to protect the builder, and an attorney can identify clauses you should negotiate or at least understand before committing.
The Design Center and Upgrade Process
After signing the contract, you will visit the builder's design center to select finishes — countertops, flooring, cabinets, fixtures, paint colors, and more. This is where builders make a significant portion of their profit. The base price of the home typically includes builder-grade materials (the cheapest options), and every upgrade is priced at a premium. A kitchen countertop upgrade that costs $3,000 in materials might be priced at $8,000 through the builder's design center. Some upgrades are worth doing through the builder because they are structural or would be disruptive to install later — things like electrical rough-ins for future fixtures, plumbing for a wet bar, or upgraded insulation. Cosmetic upgrades like flooring, light fixtures, and hardware are usually cheaper to do yourself after closing.
Construction Timelines and What to Expect
Depending on the market and the builder's backlog, new construction can take anywhere from four to twelve months from contract signing to closing. During this time, you should request regular updates and visit the site at key milestones: after the foundation is poured, after framing is complete, and before drywall goes up. The pre-drywall walk-through is critical because it is your last chance to see the electrical, plumbing, and HVAC systems before they are hidden behind walls. Take photos of everything at this stage. Construction delays are extremely common — weather, material shortages, subcontractor scheduling issues, and permitting can all push your closing date. Build at least a 30-day buffer into your planning, and do not give notice on your current lease until the builder confirms a firm closing date.
Deposits and Earnest Money
Builder deposits are typically larger than resale earnest money deposits. Expect to put down $5,000 to $25,000 or more depending on the home's price and the builder. Some builders require additional deposits at certain milestones — for example, a second deposit when you complete your design center selections. Understanding when and under what circumstances you can get your deposit back is critical. Many builder contracts have very limited refund provisions compared to standard purchase agreements. If the builder cancels, you usually get your deposit back. If you cancel for a reason not covered in the contract, you may forfeit it entirely. Read the deposit refund provisions in the contract carefully and negotiate them if possible before signing.
Key Takeaways
- ✓Have a real estate attorney review the builder's contract — it is written to protect the builder, not you
- ✓Structural and pre-wire upgrades are best done through the builder; cosmetic upgrades are usually cheaper after closing
- ✓Build a 30-day buffer into your timeline and do not terminate your lease until the builder confirms a firm closing date
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