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Top 10 Things Buyers Need to Know About New Construction Homes!

There are several portions of builder contracts that buyers need to know.  Whichever builder you choose for your new home in Aldie, or elsewhere, is likely to have a contract that varies in its look and wording as compared with other builders.  The contract will most definitely be very different than the standard contract for real estate for sale in Aldie.  And while the sales associates at new home builders are always very friendly and welcoming, make no mistake that they work for the builder and the best interests of the builder – not the buyer.

It would be a wise decision to make sure you have someone experienced in the process and nuances of the contract that can represent your best interests.  Accordingly, this Top 10 is a good place to start, but certainly is not all inclusive!  Please do not hesitate to reach out to me if you have any questions, or would like assistance through the home buying process!



— Builders have a window sometimes as large as 18-24 months to deliver the finished home to a buyer, at which point the buyer must close relatively quickly – commonly within two months.

— There are usually very stiff penalties to the buyers, as set forth in the contract, if the buyer cannot meet the settlement date.



— The certificate of occupancy is a document issued by the local government which basically states that the home is habitable in its current state.  Typically, as soon as this document is issued, the builder will send the buyers the settlement date.

— Especially depending on the time of year (if freezing temperatures still exist, for instance), this may occur before the home has any grass or sod on the lawn, or it may not have a final coat of paint on the exterior.  None of these affect the habitability of the home, and therefore the buyers may be required to close on the home without some of these jobs being fully completed.



— The contracts almost always contain a provision that allow the builders to alter the lot (grading, trees & shrubbery), home layout (reversing or mirroring the home’s layout), materials inside the home (specific granite options, hardwood flooring brands, etc.).

— Ensure that in the event any of these changes become necessary that the builder notifies you in advance!



— Anything that the sales representatives have alluded to, promised, represented, etc. is not worth anything unless it is in writing in the contract.

— This is one of the most common problems with buyers of new homes is that a contradiction comes up where the builders and contractors are saying one thing, but the sales associate may have represented something else to the buyers.  Get it in writing!



— The incentives that builders advertise – “$10,000 toward closing!” or “Free finished basement!” – will be tied to using their lender and Builder Incentivetitle company.  Those companies, however, are not required to remain competitive in the rates they offer, and particularly in the miscellaneous fees like origination fees.

— Be sure you get at least one other lender to compare rates.  If the builder is attaching $7,500 in extra origination fees or other hidden fees, then suddenly the $10,000 toward closing is not such an amazing deal!  Always compare Good Faith Estimates from the builder’s lender with one of your own choosing!



— Whereas with resale homes for sale having a flexible date by which you must be qualified for financing with your lender, builder contracts are a hard and fixed date.  Should the lender not have everything in order by that date, buyers could be at risk of losing their earnest money deposits which can be tens of thousands of dollars.

— Be sure whichever lender you choose is familiar with working with builders and knows what the fixed date happens to be.  Make sure you keep in contact with your lender as well to ensure everything is going according to plan!



— Builders will normally require that the buyers pay for several closing cost fees that normally would fall to the seller in a resale home transaction.  For instance, buyers will commonly have to pay for the sellers’ Grantor Tax, deed preparation fee, and/or a “processing fee” for the preparation and administration of the contract.

— These additional fees can cost buyers an additional $1,500 – $2,000.  While it is not something that is normally negotiable with the builders, it is still something to be aware of.



No trespassing— For insurance and liability reasons, the builders do not want buyers to visit the home under construction without prior notice or approval.

— Just as when you buy a regular resale home, the home belongs to another party (the seller) up until settlement, the same is true when building a new home.



— Normally, deed is delivered to a new buyer in the form of a General Warranty Deed, which offers the most protection to the new owners.  However, builders almost always deliver a Special Warranty Deed, which provides a lesser protection for the buyer.

— It becomes even more important that buyers consider purchasing owner’s title insurance to protect themselves against the shortcomings of Special Warranty Deeds.



— On occasion, builders will include a deed restriction stating that the buyers shall not sell the property for profit within a certain period of time – commonly two years.  In the event that a buyer does sell the home for profit, they may be subject to providing a percentage of the profits to the builder.

— These restrictions have not been as common recently as they were in years past, but definitely something buyers want to verify ahead of time!

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Alex Bracke

Alex is originally from the Midwest and has lived in Northern Virginia for several years. With a background in Law Enforcement, Alex uses his unique expertise of the area combined with the Midwestern values he learned early in life to provide his customers with truly unparalleled service. Alex enjoys spending his free time with his family and friends, or in most any outdoor activity to include hiking, playing tennis or basketball, working in the yard, or touring the local breweries and wineries.

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