A new home construction contract checklist organized by the terms that decide your costs and remedies — arbitration, deposit forfeiture, warranty and habitability, inspection rights, closing costs, material substitution, and post-closing access.
Key Takeaways
- A new construction purchase agreement is drafted by the builder and is weighted in its favor — reviewing it clause by clause before signing is how you understand what you are agreeing to.
- Seven categories carry the most consequence: dispute resolution, deposit forfeiture, warranty and habitability, inspection rights, closing costs, material substitution, and post-closing access.
- For each clause, ask the same two questions: what does it require, and what outcome does that produce for me?
- Enforceability of many provisions — habitability waivers, deposit forfeiture — varies by state, so your protections depend partly on where the home is located.
- Get verbal promises in writing; a representation that is not in the signed agreement is difficult to enforce.
Buying a newly built home is different from buying a resale. There is no prior owner on the other side of the table — instead, you sign the builder’s own purchase agreement, a standardized document prepared by the builder’s attorneys and presented to every buyer in the community. Because one party drafts it and the other is asked to accept it largely as written, the agreement is, in contract terms, a contract of adhesion. That does not make it invalid. It does mean the terms are written with the builder’s interests in mind, and the responsibility to understand them falls to you.
The checklist below is organized around the categories that most often determine a buyer’s costs and remedies. It is not legal advice; it is a structured way to read the document before you sign so that nothing in it is a surprise after closing. For a deeper look at any single category, the linked clause explainers go further.
How to Use This Checklist
Print the purchase agreement and read every page — not the sales summary, the agreement itself, including any addenda and the warranty booklet it references. For each clause in the categories below, ask the same two plain questions:
- What does this clause require? State it in one sentence in your own words.
- What outcome does that produce for me? What happens to my money, my timeline, or my ability to seek a remedy if something goes wrong?
If you cannot answer the second question for a clause, that is the clause to ask about — of the sales representative, of a real estate attorney licensed in your state, or through an independent contract review. Our standalone pre-signing checklist is a printable companion to this guide.
1. Dispute Resolution: Arbitration & Class-Action Terms
What to look for
Find the section governing how disputes are resolved. Two provisions appear frequently: a mandatory binding arbitration clause, which sends disagreements to a private arbitrator instead of court, and a class-action waiver, which limits you to pursuing claims individually. Note who selects the arbitration provider and where proceedings take place.
Why it matters
An arbitration clause has the effect of waiving a jury trial and, in many agreements, the right to appeal. A class-action waiver means that if the same defect affects many homes in a community, each owner pursues it separately rather than jointly, which raises the practical cost of any individual claim. Neither provision is uncommon in consumer contracts; the point at this stage is to know they are present and what they mean for your options before a dispute ever arises.
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2. Deposit & Earnest Money Forfeiture
What to look for
Locate the deposit forfeiture language and the amount of earnest money required. Identify the exact conditions under which the builder may retain your deposit, whether any portion is refundable, and whether the financing or inspection contingencies give you a defined exit.
Why it matters
Forfeiture provisions allow the builder to keep earnest money as liquidated damages if the buyer does not close. Deposits on new construction can run from a few thousand dollars to a meaningful percentage of the purchase price, so the conditions that trigger forfeiture — and the ones that do not — directly affect how much money is at stake if your circumstances change. Enforceability is governed by state law, and some states limit forfeiture that functions as a penalty rather than a reasonable estimate of damages. Our guide to builder deposit forfeiture clauses covers the state-by-state picture.
3. Warranty Scope & Habitability
What to look for
Read the express limited warranty in full, including its exclusions and its claim procedure. Then check whether the agreement asks you to waive the implied warranty of habitability in favor of that express warranty. Note coverage durations — typically one year for workmanship, longer for structural elements — and the list of items the warranty does not cover.
Why it matters
In many states the law implies a warranty that a new home will be safe, structurally sound, and fit to live in. A waiver replaces that baseline with the builder’s own express warranty, which is generally narrower in both scope and duration. Warranty exclusion lists frequently carve out categories buyers expect to be covered — drainage, cosmetic items, and HVAC performance among them. Whether a habitability waiver is enforceable depends on your state, so the same clause carries different weight in different places. Our habitability waiver explainer breaks down which states protect it.
A warranty booklet can run dozens of pages of exclusions.
A full scan flags every limitation and waiver so none of it is a surprise.
4. Inspection Rights
What to look for
Check whether the agreement limits when, how, or whether you may bring an independent inspector during construction or before closing. Look specifically for the ability to inspect at the pre-drywall stage, before the final walkthrough, and at closing.
Why it matters
The builder conducts its own quality checks, but those are performed by the builder or its agents. An independent, third-party inspector works for you. Pre-drywall is the one window when framing, plumbing, and electrical are still visible; once walls are closed, those systems can only be assessed indirectly. A clause that narrows inspection access reduces your ability to identify issues while they are still straightforward to document and address. In most states buyers retain the practical ability to arrange independent inspections at key milestones — confirm what your agreement says.
5. Closing Costs & Fees
What to look for
Itemize which closing costs and transfer or recordation taxes the contract assigns to you, any daily closing penalty for missing the scheduled date, and any incentives — closing-cost credits or rate buydowns — that are conditioned on using the builder’s affiliated lender. Compare any in-house financing estimate against at least two outside lenders, and confirm each quoted monthly payment includes taxes, insurance, and HOA dues.
Why it matters
Closing-cost assignments move specific dollar amounts from one party to the other; a cost the contract places on you is a cost you pay. A daily closing penalty applies financial pressure to close on the scheduled date even when a delay originates outside your control. Incentives tied to an affiliated lender can be genuine, but they are easiest to evaluate against an independent quote. Reading these terms together tells you the real, all-in cost of the transaction rather than the headline price.
6. Material Substitution
What to look for
Find any clause that reserves the builder’s right to substitute materials, fixtures, or appliances with alternatives it considers comparable. Note whether your consent is required, whether you are entitled to notice, and whether a substitution entitles you to any price adjustment. See the material substitution clause explainer for the typical wording.
Why it matters
A substitution right means the finishes shown in the model home or listed in your selections may be replaced with different products before closing. Where the clause requires no consent and offers no price adjustment, the home you receive can differ from the one you expected without a corresponding change in price. Documenting your agreed selections in writing, and checking them against the home during the walkthrough, is how this category is managed.
7. Post-Closing Access
What to look for
Some agreements reserve a license for the builder to enter the property after closing — to complete punch-list work, to access neighboring lots still under construction, or to perform warranty repairs. Identify the duration of any such access, the notice you are owed, and the conditions under which the builder may enter.
Why it matters
A post-closing access license is reasonable in narrow forms — finishing punch-list items benefits the buyer — but the duration and notice terms determine how it affects your use of a home you now own. A multi-year access right with limited notice has a different practical effect than a short, notice-based one tied to specific repairs. Knowing the scope before closing lets you weigh it rather than discover it later.
After the Checklist
Once you have worked through the seven categories, a few practices apply across all of them. Put verbal promises in writing: a representation about an upgrade, a timeline, or warranty coverage is difficult to enforce unless it appears in the signed agreement or an addendum. Understand your state’s protections, since the enforceability of waivers and forfeiture provisions varies by jurisdiction. And consider an independent review — a real estate attorney or a contract analysis service can identify provisions that affect your remedies and costs.
A checklist tells you which questions to ask. A full contract analysis answers them for your specific agreement — every clause, every exclusion, in plain English.
A checklist is a strong starting point, and reading the agreement yourself is always worthwhile. But a purchase agreement runs to dozens of pages of dense terms, and the provisions that matter most are often the ones written least plainly. A full clause-by-clause analysis reads the entire document — including the warranty booklet and addenda a checklist can only point you toward — and reports what each clause does, why it matters, the risk it carries, and example counter-language you can raise with the builder. If you want that depth for your own contract, you can scan it at fineprint.homes for $49.
Frequently Asked Questions
What should I check before signing a new construction contract?
Review the dispute-resolution terms (arbitration and class-action language), the deposit and earnest-money forfeiture conditions, the warranty scope and any implied-warranty waiver, your inspection rights, which closing costs and fees are assigned to you, the builder's material-substitution rights, and any post-closing access the builder reserves. For each, identify what the contract requires and what outcome that produces for you. This checklist walks through all seven categories.
Is a new construction purchase agreement negotiable?
The core legal clauses in a production builder's standard agreement — arbitration, warranty waivers, deposit forfeiture — are generally presented on a take-it-or-leave-it basis and are difficult to change. Financial terms such as closing-cost credits, design selections, and lot premiums are more often adjustable. Reading the contract closely tells you which terms are fixed and which are open before you raise them.
Do I need a real estate attorney to review a new home contract?
An attorney licensed in your state can tell you which contract provisions are enforceable where you live, since enforceability of clauses like implied-warranty waivers varies by state. A contract review typically costs a few hundred dollars. Whether or not you hire an attorney, reading every page yourself — or having the document analyzed — is the step that surfaces the terms that affect your remedies and costs.
Can a builder keep my earnest money if I do not close?
Many standard agreements include a deposit-forfeiture provision allowing the builder to retain earnest money as liquidated damages if the buyer does not close. The specific conditions, amounts, and any exceptions are spelled out in the contract, and the enforceability of forfeiture provisions is governed by state law. Confirm the exact cancellation terms before you sign.
What is the implied warranty of habitability?
In many states the law provides an implied warranty that a newly built home will be safe, structurally sound, and fit to live in. Some purchase agreements ask the buyer to waive it in favor of the builder's express limited warranty. Whether a waiver is enforceable depends on the state. Check whether your contract includes a waiver and what your state recognizes.
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