The differences in a builders contract versus a resale contract

This blog is for all the buyers out there looking to buy a new build. Many buyers may not realize this but when you deicide to buy a new build be prepared to encounter contract negotiations that are a bit different then the typical resale contract. The one main thing to know is this, many builders have their own on-side real estate agent who works exclusively for the builder. While this might seem ideal for a buyer, the buyer needs to still have their own agent because the builder’s agent has the best interest of the builder at heart while a buyer’s agent has the buyers best interest at heart.


Here is a list of some of the main differences you as a buyer can expect when buying a new build versus buying a resale:


1.     You will have to pay more money upfront for a new build – Builders are going to require more money upfront because they are taking more of a risk if the deal doesn’t go through for some reason. For example, if you decide to back out of the offer but have already chosen all the appliances and paint colors in the house, the builder has to sell your decisions to another buyer.

2.     The lending process – This part is similar to a resale in which buyers have a certain amount of time to apply for their mortgage and get approved. But unlike resale, buyers may not be able to lock in an interest rate until closing time is closer.

3.     Basically no price negotiation – Builders rarely negotiate the price of their new builds unless they have a slow down (but in this Denver market, that is very rare). If you decide you want to wait to see where prices go with the new build, you can check towards the end of the quarter when builders will know if they have reached they sales goal.

4.     Move-in time is not up to you – When you buy a resale, buyer and seller negotiate when closing date will be (usually 1-2 months from the time the contract is accepted). But with builders, you are on their schedule and many times a new build has up to 180 days to build the home.

5.     Might not be able to choose your lender – A lot of builders have their own preferred mortgage lender. Even though you have the right to shop around for the best loan for yourself, these preferred lenders can offer incentives.

6.     Don’t skip the walkthrough at the end of construction – Just like with resale, you are allowed your final walk through and just because it is a new build, don’t think that means you won’t have deficiencies or code violations.


Denver is seeing a lot of new builds at the moment as the demand for more houses continues to grow. If you are thinking of buying one, make sure to find an agent like myself who understands the ins and outs of the contract so there will be no issues when you decide to put an offer on your dream house.