🔍Understanding Builder Contracts: What Should Hampton Roads Buyers Watch For?
Hello Hampton Roads,
Understanding Builder Contracts: What Should Hampton Roads Buyers Watch For?
Ever wondered what’s really hiding in that shiny new construction contract? If you’re buying a new home in Virginia—especially in high-growth areas like Virginia Beach, Chesapeake, or Suffolk—it’s crucial to understand what builder contracts actually say (and what they don’t). Unlike standard resale agreements, builder contracts are typically written by the builder’s attorney and heavily favor the builder’s interests. That means it’s up to you—and your agent—to read between the lines and protect your investment.
Let’s break down the key clauses, red flags, and negotiation points every Virginia buyer should know before signing on the dotted line.
📌 Key Takeaways
🏗️ Builder contracts are custom-written and favor the builder.
💰 Upgrades often require 50–100% upfront payment.
⏳ Buyer-caused delays can trigger daily fees.
🛠️ Virginia homes include a 1-year builder warranty + structural coverage.
🕵️♀️ Always get a home inspection—even on new builds.
📑 Read HOA and condo docs carefully—the fine print matters.
🧠 What Makes Builder Contracts Different in Virginia?
Builder contracts are not standardized like the Virginia REALTORS® resale agreement. Instead, they’re custom documents drafted by the builder’s legal team. That means:
🏗️ More control for the builder: Timelines, materials, and even lot substitutions may be at the builder’s discretion.
📜 Limited buyer protections: Many contracts limit your ability to cancel or receive refunds—even if delays or changes occur.
⚖️ Arbitration clauses: These often waive your right to sue in court, requiring disputes to be settled privately.
In Hampton Roads, where new construction is booming, understanding these nuances is essential.
🔍 Top 7 Clauses Virginia Buyers Should Review Carefully
🧱 Change Orders & Selections
Builders often reserve the right to substitute materials or finishes.
- Action: Ensure your contract specifies what's included and what happens if items are discontinued.
- Watch for: Upgrades may require 50–100% upfront payment to protect the builder if the home doesn’t appraise.
⏳ Construction Timeline & Delays
Contracts often include “time is of the essence” language and allow for builder-side delays.
- Action: Ask for realistic timelines and what happens if deadlines aren’t met.
- Watch for: Buyer-caused delays may trigger per diem fees—often $100+ per day.
💸 Deposit & Cancellation Terms
Virginia builder deposits can be substantial—and nonrefundable.
- Action: Understand your cancellation rights and refund conditions before signing.
🛠️ Warranty Coverage
Virginia law requires a 1-year warranty on workmanship and materials.
- Action: Review warranty terms and coverage timelines.
- Watch for: Most homes also include a structural warranty—typically 5 years. Confirm specifics.
📑 HOA & Community Disclosures
Planned communities often come with rules, fees, and future development plans.
- Action: Read all HOA and condo docs carefully—especially fee structures and restrictions.
📈 Escalation Clauses
Some contracts allow builders to raise prices if costs increase.
- Action: Ask if this clause is included—and whether it can be capped or removed.
🔍 Final Walkthrough & Punch List
Your final walkthrough is your last chance to catch issues before closing.
- Action: Make sure the contract includes a clear process for documenting and resolving unfinished or unsatisfactory work.
🛡️ How to Protect Yourself as a Buyer
✅ Hire a local real estate agent experienced in new construction (like yours truly 😉). We know how to spot red flags and negotiate favorable terms.
✅ Have the contract reviewed by a Virginia real estate attorney, especially if the builder won’t use a standard form.
✅ Never skip the home inspection—even on new construction. Hidden issues like grading problems, HVAC shortcuts, or missing insulation can cost thousands later.
✅ Be mindful of costly upgrades. Some builder options (like structural changes or energy-efficient systems) add long-term value. Others (like luxury lighting or cabinet hardware) may be cheaper to DIY post-closing.
✅ Attend all walk-throughs and builder-promised follow-ups—including pre-drywall, final punch list, and any post-closing inspections. If it’s not scheduled and documented, it’s not guaranteed.
✅ Document everything—from upgrade selections to verbal promises. If it’s not in writing, it doesn’t exist.
✅ Read everything—including HOA and condo docs. What the big print giveth, the little print taketh away. Look for surprise fees, rental restrictions, and future development plans that could impact your lifestyle or resale value.
✅ As you settle into your new home—and before your 1-year builder warranty expires—submit a punch list of items to be corrected. This is typically done twice: once within the first 30 days, and again around the 11th month to catch any lingering issues before coverage ends.
❓ FAQ: Builder Contracts in Virginia Beach—What Buyers Ask Most
1. Do I really need a home inspection on new construction? Yes—every time. Just because it’s new doesn’t mean it’s flawless. From missing insulation to grading issues, a licensed inspector can catch problems that aren’t visible during walkthroughs.
2. What’s the deal with paying upfront for upgrades? Many Virginia builders require 50% to 100% payment upfront for upgrades like flooring, cabinets, or countertops. If the home doesn’t appraise for the upgraded value, those costs aren’t covered by your loan—so the builder wants them prepaid.
3. Can builders charge me if I cause a delay? They can—and often do. If your financing isn’t ready or you miss a deadline, some contracts include a per diem fee (often $100+ per day). Stay on schedule and communicate clearly with your lender and agent.
4. What kind of warranties come with a new home in Virginia? By law, builders must offer a 1-year warranty on workmanship and materials. Most also include a structural warranty—usually 5 years, but always confirm. Submit punch lists within the first 30 days and again around month 11.
5. Why should I read the HOA or condo docs so closely? Because the fine print matters. Fees, rental restrictions, pet policies, and future development plans can all impact your lifestyle and resale value. As the saying goes: what the big print giveth, the little print taketh away.
✍️ Final Thoughts
Builder contracts in Virginia aren’t one-size-fits-all. They’re complex, builder-friendly, and often overwhelming for buyers. But with the right guidance, you can navigate them with confidence. Whether you're eyeing a condo at the Oceanfront or a custom build in Princess Anne, knowing what to watch for puts you in the driver’s seat.
Want help buying a new construction home in Hampton Roads ? Let’s connect—I’m here to make sure your next move is a smart one.
💡 Builder Contracts Got You Spinning?
If you're thinking of buying new construction in Virginia Beach or in S. Hampton Roads, I’ll help you decode the fine print, spot potential red flags, and discuss your options. Let’s make sure your next purcprotects your future—not just the builder’s bottom line.
📅 Schedule Your Free Buyer Strategy CallThanks for Reading,
Liz Schuyler is a top Virginia Beach REALTOR® with RE/MAX Allegiance, licensed since 2001 and trusted across Hampton Roads. With 350+ homes sold, she helps clients Sell, Move, and Invest with confidence and strategy.
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