How to Read a New-Construction Contract Before You Sign

A guide to the parts of a new-construction purchase agreement that most buyers skip, and why each one matters.

A new-construction contract is not written like a resale purchase agreement. It comes from the builder's side, and it is written to protect the builder's numbers. That does not make it unfair, but it does mean you need to read it differently.

Start with the lot premium. This is the extra charge tied to where the home sits on the plat, whether that is a corner, a view, or a larger yard. Ask how that number was set and whether it is negotiable. Builders often treat the base price as fixed and the lot premium as the place they will actually move.

Next, look at the design center allowance. Most contracts include a dollar figure for finishes like flooring, cabinets, and countertops. That figure is almost always lower than what a typical buyer ends up spending once they are standing in the design center choosing samples. Ask for the allowance in writing, ask what happens to unused allowance, and ask for a sample of what past buyers actually spent past that number.

Check the completion date language carefully. Many contracts give the builder wide room to push the date without penalty. Know what your rights are if the home is not ready when your current lease ends or your existing home sells.

Read the change order section. Once you are under contract, any change to the plan, finishes, or structure usually goes through a change order process with its own pricing and its own timeline. Know the cost of changing your mind before you need to change it.

Finally, look at what happens to your deposit if you walk away, and what happens to the builder's obligations if they cannot deliver on time or as described. These clauses are usually not symmetrical. Knowing that going in changes how you negotiate everything else.