01Problem
The person in the model home is the builder’s agent. Production contracts are the builder’s paper: deposits that go nonrefundable after a short window, estimated completion dates, force majeure, arbitration, exclusive limited warranties, and inspection that is informational only. Census/HUD CB26-174 (Oct. 27, 2026) median new-house price $400,400. There is no federal 3-day cooling-off right on a purchase-money new home (TILA § 1635(e)(1); 12 CFR 1026.23(f)(1); FTC 16 CFR 429.0(a)(6) excludes real property). The signed form is the deal.
02Intake
- Unsigned purchase agreement + every addendum (financing, FHA/VA amendatory, HOA, arbitration, warranty, design center, lot premium).
- Reservation/earnest-money amount, refund conditions, and whether design-center deposits are separately nonrefundable.
- Incentive flyer and the captive-lender sentence; Appendix D AfBA form.
- Spec/option sheet vs what is in the model; lot-premium schedule; last month’s price list.
- Estimated completion, force majeure, price-escalation, and assignment clauses.
- Warranty booklet; arbitration/class-waiver; inspection-access clause.
- Intended loan type and whether HUD 92800.5B amendatory language is in the contract.
- HOA declaration, budget, assessments, and whether the association is still builder-controlled.
03Playbook
- 01
Name the agency. The sales representative is employed or contracted by the builder. Bringing a buyer’s agent is allowed at most production communities (D.R. Horton 10-K FY2025 discloses independent-broker closings). Anything the rep promises that is not in the signed contract is not the deal.
- 02
Assume no federal cancel right. TILA rescission does not apply to a residential mortgage transaction. The FTC Cooling-Off Rule excludes real property and typically excludes a sale at the seller’s place of business (the model). ILSA’s 7-day revocation applies to non-exempt lots; a house obligated to complete within two years is fully exempt (15 U.S.C. § 1702(a)(2)). Pennsylvania HICPA’s 3-day cancel excludes construction of a new home. Negotiate deposit-refund, financing, appraisal, inspection, and missed-completion outs into the signed contract.
- 03
Read the deposit as liquidated damages. No Census, NAHB, or builder 10-K states a national typical earnest-money percentage. FHA: earnest money over 1% of sales price (or “excessive” relative to savings history) must be sourced. Washington RCW 64.04.005 generally caps earnest-money forfeiture as the seller’s sole remedy at 5% of the purchase price when the contract is so limited. An Instagram 10–20% figure is unverified as a production typical. Design-center fees are often separately nonrefundable. Lennar 10-K: contracts are “generally accompanied by deposits”; 14% cancellation rate in 2025 and 2024.
- 04
Lock the FHA/VA amendatory clause; negotiate a conventional equivalent. HUD 92800.5B / Handbook 4000.1: the purchaser shall not be obligated to complete the purchase or to incur any penalty by forfeiture of earnest money unless given a written statement of appraised value of not less than the stated amount (usually the contract price). The buyer may still elect to proceed. Conventional loans do not automatically get this clause. An “appraisal-gap” addendum that requires the buyer to bring cash to cover a shortfall is the opposite of the amendatory out.
- 05
Hunt the escalation and cost-shift clauses. Lennar 10-K: price schedules “may be subject to change to meet changes in labor and material costs”; the company has deferred home-sale price commitments until construction costs are finalized. Flag any clause that lets the builder raise the price, swap specifications, or charge a “closing adjustment” after you sign. Get the base price, lot premium, and option total as a fixed number in the contract, with a written list of what in the model is not in the plan.
- 06
Replace “estimated completion” with a drop-dead date. Force majeure plus “estimated” plus subcontractor schedules leave the buyer renting and paying a lock extension. Write: if a certificate of occupancy is not issued and utilities are not on by [date], Buyer may terminate and recover all deposits, including design-center fees. ILSA’s 2-year completion obligation is the federal lot-sale exemption, not a buyer remedy on an already-exempt house; the drop-dead date in this contract is the remedy.
- 07
Make inspection a walk-away, not a courtesy. Default builder paper treats the inspector’s report as informational. Without a contingency, defects become warranty claims. Require pre-drywall and final access with utilities on, and a right to delay, escrow 120%, or terminate on material defects (skill 14).
- 08
Read arbitration and the exclusive warranty together. Pulte’s national booklet: unresolved claims “must be resolved by binding arbitration”; FAA governs; AAA Home Construction Arbitration Rules; small-claims carve-out; arbitration request no later than 90 days after the applicable warranty period expires; implied warranties of habitability and workmanlike construction disclaimed “to the fullest extent permitted by law,” with non-waivable statutory warranties preserved. Flag the clause; enforceability is state- and FAA-specific. CA SB 800, TX RCLA, NY GBL 777-a, and FL § 553.837 are the statutory overlays.
- 09
Treat “as-is” and selection sheets as the spec. Unsigned design-center extras are not in the appraisal and may blow IPC caps (Fannie 3/6/9%; FHA 6%). Toll Q4 2025: average Design Studio + structural + lot-premium spend ~$206,000, ~24% of base. Structural options (foundation, elevation, HVAC, electrical, plumbing) must be chosen before drywall.
- 10
Open the HOA file. Builder-controlled associations set the budget the flyer uses. Match assessments, reserves, and turnover language to the recorded declaration.
- 11
Shop title and the captive lender on the same day. 12 U.S.C. § 2608: seller may not require a particular title company as a condition of sale — treble the title charges. Appendix D: “YOU ARE FREE TO SHOP AROUND.” Run skill 7 on the incentive package before the flyer expires.
- 12
Decision rule. Sign only when (i) deposit-refund triggers are in the contract (financing, appraisal/amendatory, inspection, missed completion), (ii) price is fixed, (iii) specs are attached, (iv) arbitration and warranty booklet are read against the state statute, and (v) two outside LEs exist. Walk when deposits are nonrefundable at signing and inspection is barred.
04Checklists
Builder sales-rep and contract reality check
- Agency named: sales rep works for the builder; buyer’s agent allowed
- No federal cooling-off assumed; contract outs are the only outs
- Deposit dollars, refund triggers, and design-center nonrefundable terms in writing
- FHA/VA amendatory clause (or a negotiated conventional equivalent)
- Price, lot premium, and options fixed; last month’s price list in the file
- Drop-dead CO date with deposit refund, including design-center
- Inspection access + termination on material defects; spec sheet initialed
- Arbitration / class-waiver / exclusive-warranty read against CA SB 800 / TX RCLA / NY 777-a / FL 553.837
- HOA declaration, budget, assessments, turnover status
- Appendix D AfBA + two outside LEs (skill 7); owner’s title shopped under § 2608
- Structural options locked before drywall
05Questions to ask
- Q01
“Confirm in writing that you are the builder’s representative, and that I may have my own agent at every meeting.”
- Q02
“What is the deposit in dollars, when does it become nonrefundable, and which events return it (financing, appraisal, inspection, missed CO)?”
- Q03
“Is the FHA/VA amendatory clause in this contract? For a conventional loan, will you add the same appraisal-value out?”
- Q04
“Is the purchase price fixed, or can labor/material, lot premium, or ‘closing adjustments’ raise it after I sign?”
- Q05
“What is the drop-dead completion date, and what happens to deposits — including design-center fees — if you miss it?”
- Q06
“May my independent inspector access at pre-drywall and final with utilities on, and is that a termination contingency?”
- Q07
“Send the warranty booklet and point me to the arbitration, class-waiver, and implied-warranty disclaimer.”
- Q08
“Attach the signed spec sheet. What in this model is not in my plan?”
- Q09
“Is the HOA still builder-controlled, and do the assessments in this flyer match the recorded budget? Send Appendix D and confirm I can buy this house without your lender or title company.”
06Red flags
“Sign today to hold the lot / hold the rate”
Deposits nonrefundable at signing; no financing, appraisal, or inspection out
Appraisal-gap addendum on a conventional deal with no amendatory equivalent
Price-escalation, “closing adjustment,” or spec-swap after signing
Completion “estimated” with open-ended force majeure and no refund
Inspection informational only, or third-party inspectors barred
Mandatory arbitration + implied-warranty waiver without reading the state statute
Model features that are not on the spec sheet; HOA still builder-controlled with flyer assessments below the recorded budget
Seller-required title company for the owner’s policy; “FHA requires our 10-year warranty” (false since March 14, 2019)
Instagram-style 10–20% pre-construction deposit treated as normal for a production home
07Scripts
I will visit [community] on [date] with [buyer’s agent, brokerage]. Please email, before I arrive, the unsigned purchase agreement and all addenda, the current price and lot-premium list, the incentive flyer, the Appendix D AfBA disclosure, the warranty booklet, and the HOA budget. I will not sign on a first visit. 12 U.S.C. § 2607(c)(4) and 12 U.S.C. § 2608 preserve my right to shop lenders and title.
(1) Earnest money and design-center deposits are refundable if Buyer’s financing is denied, if the appraised value is less than the contract price (HUD 92800.5B language, applicable to conventional as well as FHA/VA), if independent inspection at pre-drywall or final finds material defects Seller does not cure, or if a certificate of occupancy is not issued by [drop-dead date]. (2) Purchase price, lot premium, and option total are fixed at $[P]; Seller shall not raise them for labor, material, or closing adjustments. (3) Inspection access and remedies as in the inspection addendum. (4) Seller shall deliver Appendix D and shall not require a particular title company for Buyer’s owner’s policy (12 U.S.C. § 2608).
I will not sign an appraisal-gap addendum that requires me to bring cash to cover a shortfall. For FHA/VA, HUD 92800.5B already provides that I am not obligated to complete or forfeit earnest money unless given a written statement of appraised value of not less than the contract price. Add that same language for this conventional loan, or I will not proceed.
08Tools
Callable over MCP once connected. Your agent passes the inputs and gets structured results back.
builder_contract_clause_extractorBuilder contract-clause extractor- Scans pasted builder purchase-agreement text for the clauses the skill tells you to find (deposit refund, escalation, estimated completion, force majeure, inspection, arbitration, warranty disclaimer, amendatory clause, title mandate, HOA, captive lender) and returns what to ask about each. Text pattern matching only.
deposit_refund_testerDeposit-refund tester- Builds a refund matrix for the builder deposit: FHA earnest-money documentation at over 1% of price, Washington's 5% sole-remedy forfeiture cap (RCW 64.04.005, when the contract so limits), and which standard outs (financing, appraisal, inspection, missed completion) are missing.
completion_risk_calendarCompletion-risk calendar- What a 30/60/90-day slip in the certificate of occupancy costs you in rent and rate-lock extension fees, and whether each slip passes your lock expiration, lease end, or a proposed drop-dead date. Lock-extension pricing is lender-specific — enter your lender's figure.
09Formulas & rules
- FHA earnest-money documentation. Threshold = 1% of sales price. On a $400,400 median new house, 1% = $4,004. Earnest money of $5,000 must be sourced (canceled check, deposit-holder certification, VOD/bank statement, or TPV).
- Washington forfeiture cap (when the contract so limits). 5% of $400,400 = $20,020 as the maximum earnest-money forfeiture that can be the seller’s sole remedy under RCW 64.04.005.
- Instagram 10–20% figure, labeled unverified. 10% of $700,000 = $70,000; 20% = $140,000. No Census/NAHB/10-K support as a production typical.
- ILSA 2-year exemption. A contract obligating the seller to erect a residential building within two years is fully exempt from ILSA registration and the 7-day revocation (15 U.S.C. § 1702(a)(2)). A lot without that obligation keeps the 7-day right (15 U.S.C. § 1703(b)) and, if no Property Report was given, up to two years (15 U.S.C. § 1703(c)).
- Pulte arbitration clock. 1-year workmanship expires June 15, 2027 → arbitration request due by Sept. 13, 2027. 10-year structural on a June 15, 2026 close → request by Sept. 13, 2036. Toll Q4 2025 options load ~$206,000 (~24% of base) is luxury mix; read this contract’s selection sheet.
- No TILA 3-day on purchase. 15 U.S.C. § 1635(e)(1); 12 CFR 1026.23(f)(1).
10State variation
- Florida § 553.837 (July 1, 2025): 1-year transferable FBC-material warranty on never-occupied 1–4 unit / modular.
- Texas RCLA Ch. 27 (HB 2022, Sept. 1, 2023) still current; 60-day certified-mail notice; boldface 10-point RCLA notice in the contract or $500 civil penalty (§ 27.007).
- California SB 800 exclusive path for post-2003 purchase agreements.
- New York GBL 777-a 1/2/6-year implied warranty unless replaced under 777-b — read whether the builder disclaimed.
- TREC 20-19 (resale form, effective July 1, 2026) is not the production-builder form; Texas new-construction is typically the builder’s paper plus, if used, the Third Party Financing Addendum’s FHA/VA amendatory language.
- HUD/USDA 2021 IECC rule rescinded April 28, 2026 (HUD No. 26-029 / 91 FR 23450). CFPB: 9 public actions in 2025, 0 in 2026 through late October; Rocket Homes/Jason Mitchell Group RESPA suit dismissed with prejudice February 2025.
11Community tactics
- “The sales representative works for the BUILDER, not YOU.” Bring your own agent. Verified — agency law; Horton 10-K discloses independent-broker closings.
- Time the purchase to the builder’s fiscal year-end. Unverified as a consumer rule — realtor reel. Lennar’s year-end is Nov. 30; Horton’s is Sept. 30. NAHB August 2026: 35% of builders cut prices (avg 6%) and 63% used incentives — negotiate off the current sheet.
- “Spend as little time in the model home as possible.” Partly — vendor tactic; the useful core is that model features may be absent from the spec sheet (Lennar 10-K: models are sales tools).
- Budget a 10–20% pre-construction deposit. Unverified for production builders — single Instagram commenter (@uniqcommunities). Use the contract blank and FHA’s 1% documentation trigger.
- Read timelines and closing adjustments. Verified — contract practice plus ILSA 2-year completion exemption; Lennar 10-K on estimated completion and cost-schedule flexibility.
12Fact-check notes
- CFPB, FMCSA, Pennsylvania Insurance Department, NBC News, and ProPublica pages: none cited in last30days for this skill.
- Sources URLs work this round: TILA 1635 purchase-money exemption; 16 CFR 429.0 real-property exclusion; ILSA 1702(a)(2) 2-year completion exemption; Lennar 10-K deposits/14% cancel/price-schedule flexibility; Pulte warranty arbitration and 1-2-5-10; HUD ML 19-05 10-year plan gone.
- Dropped: “typically 5–10% earnest money” as a national typical — not in Census, NAHB, or 10-Ks. Dropped Fine Print Homes “10 to 15 percent forfeiture” as a measured typical. Dropped Lennar Broward arbitration motion as a holding (case posture). $52,883 broken-arm X story, Connecticut deposit rule, New Mexico spot-delivery: not used.
13Tools to implement
Show the tool specifications
- Contract-clause extractor. Inputs: unsigned PDF. Logic: flag deposit refund, escalation, estimated vs drop-dead completion, force majeure, inspection (informational vs contingency), arbitration/class-waiver, implied-warranty disclaimer, amendatory clause, title-company mandate, HOA assessments vs recorded budget, captive-lender condition. Output: clause map with TILA 1635, ILSA 1702(a)(2), RESPA 2608, HUD 92800.5B, state warranty. Sources: 15 U.S.C. § 1635; 15 U.S.C. § 1702; Pulte warranty PDF.
- Deposit-refund tester. Inputs: deposit dollars, price, loan type, state, listed refund events. Logic: FHA 1% documentation flag; WA 5% sole-remedy cap if applicable; list missing outs (financing, appraisal, inspection, missed CO). Output: refund matrix.
- Completion-risk calendar. Inputs: estimated CO, lock expiration, lease end, drop-dead proposed. Logic: rent + lock-extension exposure if CO slips 30/60/90 days. Output: cost of “estimated” vs a drop-dead refund (lock-extension dollars are lender-specific; skill 7).
14Sources
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Demand evidence F3×P3×S4 = 36; r2 §23 “The sales representative works for the BUILDER, not YOU!” (@the.nba.realtor)