New Construction

Can I put contingencies in a new construction contract?

By Steve Lockhart

The short answer

A contingency is a condition that lets you walk away without penalty, and resale contracts are full of them: financing, appraisal, inspection. Builder contracts take the opposite shape.

Full answer

A contingency is a condition that lets you walk away without penalty, and resale contracts are full of them: financing, appraisal, inspection. Builder contracts take the opposite shape. Many are drafted to be as firm as possible, with limited cancellation rights and a deposit that can be partially forfeited if you default, which is how builders protect their construction schedule.

That does not mean there are no protections. Some builders allow a financing contingency when you use their lender, a loan amount contingency, or an appraisal contingency that lets you cancel if the home appraises below your contract price, and Nevada has its own rules about deposits and cancellation. The terms vary by builder, by phase, and by market, so the answer is always: read this specific contract.

The safest sequence: review the contract before you pay a deposit, price your financing before you sign, and know what happens to your money in each possible ending, from smooth closing to cancellation to builder default. An experienced real estate attorney or an agent fluent in builder contracts is worth the time, because the deposit rules are the part buyers learn last and regret first.

Go a little deeper

Frequently asked

Questions people often follow up on

Can I cancel a new build contract without losing my deposit?

Only if the contract gives you a cancellation right and you trigger it correctly. Some builders allow cancellation within a short review period, some allow it if financing fails under stated terms, and some allow it if the appraised value comes in low. Outside those terms, cancellation usually costs you at least part of your deposit.

What happens to my deposit if I default?

Builder contracts typically define default damages, and the deposit is the usual measure. Some Nevada contracts state the builder keeps a portion of the deposit as liquidated damages if you cancel or fail to close. Read the exact clause, because builders write these differently and enforce them.

Should I hire an attorney for a new build contract?

If you are signing a contract with a large deposit, an attorney who knows Nevada new construction is a reasonable expense. At minimum, have an experienced buyer's agent walk through the cancellation, deposit, escalation, and change-order clauses with you, because the fine print controls what happens to your money.

The Lockhart Method

Your Home | My Strategy | Proven Results

My strategy: know the exit before you enter. I walk every builder contract's deposit, cancellation, escalation, and contingency clauses with you before you sign, so the only surprises are the good ones, and your money is protected in every possible ending.

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