Buying a new construction home in Virginia can look a lot like buying a resale home: You make an offer, arrange financing, complete inspections, and head to closing. But the contract you sign may work very differently.
The biggest difference is that builder contracts are typically written specifically for the builder’s business, while resale transactions often use standardized forms developed for existing-home sales. A builder’s agreement may give the builder more flexibility over construction timelines, materials, and closing dates—and give buyers fewer opportunities to cancel.
Neither type of contract is automatically good or bad. What matters is understanding your obligations, your protections, and what happens if something changes.
Here are the key differences to review before signing a Virginia new construction contract.
1. The Contract Form and Negotiating Process
Many Virginia resale transactions use standard forms published by local or regional real estate organizations. These contracts generally provide a familiar framework for negotiating price, financing, inspections, settlement, and remedies if either party defaults.
Builders frequently use their own contracts, along with detailed addenda covering construction, design selections, warranties, and community requirements. Those documents are designed around the builder’s construction process and often contain provisions that favor the builder.
A builder may be willing to negotiate incentives or upgrades while refusing to change the underlying contract language. That does not mean you should skip a careful review.
Buyer takeaway: Do not assume a builder contract includes the same protections as a resale contract you have signed before. For legal interpretation or proposed contract changes, consult a Virginia real estate attorney.
2. Earnest Money and Upgrade Deposits
In a resale transaction, buyers commonly provide an earnest money deposit. Whether that money is refundable depends on the contract, including any applicable contingencies and notice requirements.
New construction purchases may involve several payments:
- An initial earnest money deposit
- A lot premium
- Additional construction deposits
- Deposits for structural options or design-center selections
Some builder agreements make option or upgrade payments nonrefundable early in the process. Others allow the builder to retain substantial deposits if the buyer cannot complete the purchase—even after the buyer has spent months waiting for construction.
The contract should also explain who holds the money and under what conditions it can be released. Do not assume every payment receives the same escrow treatment.
Buyer takeaway: Ask for a written explanation of each deposit, when it becomes nonrefundable, and what happens to it if financing fails or construction is delayed.
3. Financing and Appraisal Contingencies
Resale buyers often negotiate financing and appraisal contingencies. Depending on their wording, those provisions may provide an exit if the buyer cannot obtain the specified loan or the home appraises below the purchase price.
Builder contracts may offer narrower protections. For example, a financing contingency might expire long before construction is complete. An appraisal provision may require the buyer to bring additional cash rather than allowing cancellation.
This matters because a new home’s final price can rise substantially after adding lot premiums, structural changes, and finishes. Those selections do not necessarily increase the appraised value dollar for dollar.
Builders may also offer closing-cost assistance or other incentives for using a preferred lender or settlement provider. Compare the complete package, including interest rate, fees, rate-lock terms, and incentive conditions—not just the advertised credit.
Buyer takeaway: Confirm what happens if the appraisal is low, your loan approval changes, or your interest-rate lock expires before the home is ready.
4. Estimated Completion Versus a Firm Closing Date
A resale contract usually identifies a settlement date for an existing property. Extensions may still be necessary, but the home is already built.
A builder contract often starts with an estimated completion window. It may allow extensions for weather, labor shortages, material availability, permitting, utility connections, or other events described in the agreement.
Some contracts also give the builder the right to set closing with relatively short notice once the home meets the contract’s completion requirements.
That creates practical questions for buyers who need to sell another property, end a lease, schedule movers, or secure temporary housing.
Buyer takeaway: Look for any outside completion deadline, the builder’s extension rights, your cancellation rights, and whether the agreement provides any compensation for delays. Avoid treating an estimated delivery date as a guarantee.
5. Inspections and Repair Rights
With a resale purchase, buyers may negotiate an inspection contingency that allows them to request repairs, renegotiate, or terminate within specified deadlines.
New construction inspection provisions often work differently. A builder may allow independent inspections but restrict when they occur, require advance scheduling, or set access and insurance requirements for inspectors.
Most importantly, permission to inspect is not the same as a right to cancel or require every requested repair.
Depending on the construction stage and the contract, useful inspections may include:
- A pre-drywall inspection
- A final inspection before closing
- A follow-up inspection before an applicable warranty period expires
Local building inspections are important, but they do not replace an independent inspection performed for the buyer.
Buyer takeaway: Get inspection access and procedures confirmed in writing. Ask how defects will be addressed and whether unresolved items can delay settlement.
6. Materials, Floor Plans, and Substitutions
When buying a resale home, you can usually evaluate the actual property before committing. With new construction, you may be relying on a model home, floor plan, sample finishes, and marketing materials.
Builder contracts may permit substitutions or variations in materials, dimensions, fixtures, grading, or design. Model homes can also include upgrades that are not part of the base price.
Verbal assurances about a particular product or feature may not be enforceable if the written agreement does not include them.
Buyer takeaway: Make sure the contract documents accurately identify your lot, floor plan, structural options, finishes, and included features. Review the builder’s substitution rights before signing.
7. Warranties After Closing
A resale buyer may receive negotiated repairs or a third-party home warranty, but those are different from a builder’s construction warranty.
New construction often comes with a written warranty covering specified workmanship, systems, or structural issues for different periods. Virginia law may also provide implied warranties for qualifying new dwellings, subject to legal requirements and any legally effective exclusions or modifications.
Do not assume an advertised structural warranty covers every defect—or that a warranty requires immediate correction of every cosmetic concern.
Review:
- What is covered and excluded
- When coverage begins and ends
- How and when claims must be submitted
- Maintenance obligations
- Who administers the warranty
- Procedures for disputed claims
Buyer takeaway: Obtain the actual warranty documents before signing, not just a sales brochure describing the coverage.
8. Disclosures, Community Documents, and Cancellation Rights
Virginia generally follows a buyer-beware approach to residential property condition, subject to specific disclosure duties and exceptions. Disclosure requirements can also differ between qualifying first sales of new homes and resale transactions.
If the home is in a condominium or property owners’ association, additional documents and statutory protections may apply. The applicable requirements can depend on the property type and whether the seller is a developer or a resale owner.
There is no universal three-day cancellation right simply because you signed a Virginia home purchase contract.
Buyer takeaway: Review association restrictions, fees, developer control, and applicable document-review or cancellation rights promptly. Have your agent or attorney help identify the deadlines that apply to your transaction.
Before You Sign a Virginia Builder Contract
A builder contract can be the right path to the home you want, but it deserves careful review before deposits are paid and deadlines begin.
Focus on five questions:
- When can I cancel, and what money would I lose?
- What happens if financing or the appraisal becomes a problem?
- How much can the completion date change?
- What inspection and repair rights do I have?
- What happens if the builder does not perform?
Pay particular attention to default remedies, attorney-fee provisions, and any requirements for mediation or arbitration.
Considering new construction in Virginia? Connect with Rachel Van Zanten early in the process, ideally before registering with a builder or signing an agreement to discuss representation, compare your options, and prepare the questions that matter most.
