I'm Brian Cooper. New-construction deposits work differently from resale — they're often larger and, importantly, can be at risk if you back out. Here's what to know before you write that check.
How new-home deposits work
You usually put down an initial reservation deposit, then additional deposits at contract and at design-center selections. The total can be a meaningful percentage of the price.
What's at risk
- Builder contracts often limit your contingencies compared to resale.
- Design-center deposits for custom selections may be non-refundable once ordered.
- If you cancel, you may forfeit some or all of your deposit per the contract terms.
Protect yourself
- Have your agent and, if needed, an attorney review the builder contract before signing.
- Understand financing and appraisal contingencies — or their absence.
- Get the deposit schedule and cancellation terms in writing.
Bring your own agent — it doesn't cost you more
The friendly sales associate at the a new community model home works for the builder. They're paid to protect the builder's interests and maximize the builder's price and margin. You deserve someone on your side.
In California, having your own buyer's agent at a new-construction community generally does not raise your price — builder marketing budgets anticipate buyer-agent participation. The one rule: I usually need to register with you on your first visit. If you tour and give your information before I'm named, some builders will not honor representation later.
Questions to ask the builder before you sign
- What's included as standard versus an upgrade on this floor plan?
- What incentives apply right now, and are they tied to your preferred lender?
- What is the exact Mello-Roos/CFD amount and HOA due on this specific lot?
- What's the realistic completion date, and what happens if it slips?
- What does the warranty cover, and for how long (workmanship, systems, structural)?
- Can I use my own lender and my own inspector?
- Which lots carry premiums, and why?
How deposits flow into closing
Your staged deposits are typically credited toward your down payment and closing costs at the close of escrow. Until then they're held per the contract, so understand who holds the funds and under what conditions they're released or forfeited.
- Reservation deposit at sign-up.
- Additional deposit at contract.
- Design-center deposits as selections are ordered.
Confirm the exact schedule and refund conditions with the builder before you sign.
Frequently Asked Questions
How much is earnest money on a new construction home?
Often larger than resale and structured in stages — reservation, contract, and design-center deposits. Amounts vary by builder; confirm before signing.
Is my new-construction deposit refundable?
It depends on the contract and build stage. Design-center selections, once ordered, are often non-refundable. Read the cancellation terms carefully.
Does the builder contract have a financing contingency?
Sometimes limited or absent compared to resale. Review the contract — and ask your lender — before relying on one.
Can I get my deposit back if the build is delayed?
Only if the contract allows it. Understand the delay and cancellation provisions before signing.
Is the deposit related to Mello-Roos?
No. Mello-Roos is a recurring community tax; amounts vary by parcel — verify with the builder.
How does Brian protect my deposit?
Brian reviews the builder's deposit schedule and cancellation terms with you and flags risks before you commit.
