Builder Contracts Are Not Resale Contracts

When you buy a resale home in Texas, both sides usually sign a contract promulgated by TREC, the state agency that standardizes real estate forms — the One to Four Family Residential Contract that nearly every agent in the state has walked hundreds of clients through. It’s a known quantity, drafted by a regulator to balance both parties, with an option period, standardized earnest-money handling, and well-worn remedies when things go sideways.

When you buy from a production builder, you will almost never see that form. TREC does publish new-home contract forms, but builders aren’t required to use them, and most don’t. Instead you’ll be handed the builder’s own purchase agreement — often twenty to sixty pages drafted by the builder’s attorneys, for the builder. That’s not a scandal; it’s how the industry works, from the big national names in communities like Santa Rita Ranch to smaller regional builders. But it means the protections you’d take for granted in a resale deal are not automatically there. You have to know what’s missing and what can be negotiated back in.

The deposits work differently — and mean something different

In a resale, your earnest money sits with a neutral escrow agent, and a modest option fee buys you a short window to walk away for any reason. In a builder contract, expect the deposit structure to be heavier and stickier: a larger earnest deposit at signing (frequently a percentage of the base price rather than a flat figure), and then — the part that surprises people — separate design-center deposits when you pick options and upgrades. Builders commonly require a meaningful share of your total option spend up front, and those dollars are often non-refundable once your selections go into production, because a floor plan customized to your taste is harder for them to resell.

There is usually no option period at all. Your rights to terminate are whatever the contract says they are — often limited to financing failure within a defined window, and sometimes not even that. Before you sign, know exactly which dollars come back to you in which scenarios, and get the answer from the contract text, not the sales counselor’s summary.

The completion date is a target, not a promise

The TREC resale form has a closing date, and missing it has consequences. Builder contracts, by contrast, are written with generous flexibility on the builder’s side: estimated completion windows rather than dates, automatic extensions for weather, labor, materials, and permitting, and often a long outside deadline — sometimes a year or more — before you have any remedy at all. Meanwhile your obligations tend to stay firm.

The practical risk isn’t usually the delay itself; it’s what the delay does to your financing. A build that slides two or three months can blow through a rate lock, and extension costs typically land on you unless you’ve negotiated otherwise. If you’re selling a current home or timing a lease, build slack into your plan and ask, in writing, what happens to your deposits and your lock if the home isn’t ready when projected.

Inspection rights: negotiate them in, then actually use them

A resale contract assumes inspections. Many builder contracts are silent or restrictive — some limit third-party inspectors, require advance notice and scheduling through the builder, or disclaim any obligation to fix what your inspector finds beyond code minimums. This is one of the highest-value things to negotiate before signing: explicit language allowing your own licensed inspector on site at the three stages that matter.

• Pre-pour — the one chance to look at plumbing rough-ins, forms, and post-tension cabling before concrete makes everything permanent. On Central Texas clay soils east of I-35, foundations deserve extra respect.
• Pre-drywall — framing, electrical, HVAC ducting, and window flashing, photographed while the walls are still open. Those photos are useful for the life of the house.
• Final — a full inspection before your blue-tape walk, so the punch list is your inspector’s, not just what you noticed on a walkthrough.

City inspections and the builder’s internal quality checks are real, but neither works for you. A few hundred dollars per phase — verify current pricing with inspectors — buys the only set of eyes in the process whose client is you.

Warranties: read the tiers, not the brochure

New homes usually come with a tiered warranty rather than the “as-is with disclosures” posture of a resale. A common structure — described generically, since every builder’s program differs — runs one year on workmanship and materials, two years on major systems like plumbing, electrical, and HVAC, and ten years on defined structural elements. The details matter more than the headline: what counts as “structural” is a narrow, specific list; claims often must go through a third-party warranty administrator; and many contracts route disputes to binding arbitration rather than court. Get the actual warranty booklet before you sign, not at closing, and have your attorney look at anything you don’t understand. That’s not us being dramatic — it’s just cheaper before ink than after.

Appraisals, upgrades, and the gap nobody mentions in the design center

Design centers are genuinely fun, and that’s the danger. Appraisers value the finished home against comparable sales, and upgrade dollars rarely appraise dollar-for-dollar — the $60,000 you spent on options may show up as a fraction of that in the appraised value, especially in a young community where the comps are the builder’s own base-price sales. Most builder contracts put that gap squarely on you: if the appraisal comes in under your contract price, you bring the difference in cash. Ask how the contract handles a low appraisal before you fall in love with the waterfall-edge island, and keep your options spend inside what you could cover if the appraisal is stubborn.

Preferred lenders: run the real math

Builders commonly tie their best incentives — closing-cost credits, rate buydowns, sometimes design-center allowances — to using an affiliated or preferred lender. Sometimes that package genuinely beats outside financing; sometimes an outside lender’s rate wins even after you give up the incentive. The only honest way to decide is to price both paths in actual monthly and lifetime dollars, side by side, on the same day. You’re generally entitled to shop; the incentive just changes the math. We run this comparison for clients constantly, and the answer flips more often than you’d guess.

Why we’re in the room

None of this is a reason to avoid new construction — communities like Easton Park and Wolf Ranch are some of the best options in the metro right now, and we help clients buy in them enthusiastically. It’s a reason not to walk in alone. The sales office works for the builder; the contract was written for the builder; the lender is often affiliated with the builder. Experienced representation is how the terms move from the builder’s standard to meaningfully better — negotiated inspection rights, protected deposits, incentives beyond the flyer, and a second reader on sixty pages of someone else’s paperwork. Our full breakdown of how we work new construction, plus an index of every active community from Georgetown to San Marcos, lives on our new construction page. One logistical note worth repeating: register your representation on your first visit to any sales office — most builders require it, and one solo walk-through can forfeit it for that community.