Nov. 19, 2025
What Makes a Builder Contract Different in Arizona?
A resale purchase contract is typically standardized in Arizona. In addition to the purchase contract, the Arizona Association of REALTORS (AAR) provides real estate agents with all of the standardized forms and disclosures used in a resale transaction. When building a new construction home, you will need to sign some of these AAR forms, as well as your real estate agent's broker required forms; the majority of the forms will come from the builder.
A builder contract is not standardized. Builders draft their own documents—often dozens of pages long—and they’re written primarily to protect the builder, not the buyer.
That doesn’t mean anything nefarious is afoot. It just means you need to understand the framework you’re stepping into.
Builder contracts typically:
• Replace the standard AAR (Arizona Association of REALTORS®) purchase and disclosure forms
• Remove or restrict certain contingencies
• Add strict deadlines
• Expand the builder’s rights during construction
• Narrow the homeowner’s options if disputes arise
Every builder purchase agreement I have seen does not give the buyer many contingency options, so it is very hard to cancel and get your earnest money back.
Because Arizona allows builders to use their own custom contracts, every builder—Lennar, Meritage, Pulte, Tri Pointe, Taylor Morrison, Richmond American, etc.—structures things slightly differently.
The trick is knowing what to look for and remembering that you always have the option to consult with your Realtor as well as a lawyer before signing the contract.
Your Earnest Money: What’s Refundable (and What Isn't)
Earnest money in a resale deal is often protected by contingencies. Builder contracts tend to make earnest deposits non-refundable, sometimes immediately upon signing. In other words, if you cancel, you will most likely lose your earnest money.
Some builders will allow buyers a contingency to sell their current home, which protects your earnest money. However, it is important to adhere to their guidelines.
Read this section slowly.
Many builders require:
• An initial deposit due at contract signing
• An additional deposit when you choose design options
• Non-refundable upgrade charges
If you change your mind, the builder usually keeps the funds. Even if your home doesn’t appraise or interest rates spike, refunds are rare unless the builder cancels the deal (see note below about FHA/VA loans).
NOTE: Builders in Arizona request that you use their title companies.
Construction Timelines Aren’t Promises
Builder contracts in Arizona often include “estimated completion dates,” but the keyword is estimated.
Builders typically protect themselves with clauses that:
• Allow construction delays for supply chain issues
• Permit design changes if materials become unavailable
• Shift timelines due to labor shortages or weather
• Extend deadlines without penalty
Most builders' purchase agreements allow up to 2 years for the completion of your home.
Meanwhile, buyers are expected to stay flexible.
This matters when locking in mortgage rates. Many buyers lock too early, only to watch the lock expire while the home sits waiting for trusses. That’s an avoidable headache when you plan correctly.
NOTE: If a lender is offering a special financing rate, locking in the rate may not be applicable.
Appraisal and Financing: You Shoulder Most of the Risk
Unlike resale contracts, builder agreements often remove appraisal and financing contingencies. Check with your builder to see how they handle these items. As for the appraised value concern, typically by the time the home is finished, it has increased in value; however, in some real estate markets, that may not be the case, and the value may have decreased.
That means:
• If the home appraises low, you could still owe the full price
• If your lender denies your loan late in the process, you may lose your deposit (READ: AVOID THESE THINGS WHEN BUYING A HOUSE)
• Switching lenders may require builder approval and could affect your incentives
Builders usually offer incentives if you use their preferred lender, but those incentives should be weighed against interest rates, fees, and long-term cost—not just the upfront discount.
NOTE: For FHA and VA loans, builders generally cannot prevent a buyer from cancelling due to a low appraisal because of the mandatory Amendatory Clause, which protects buyers if the home appraises for less than the contract purchase price. When properly executed, buyers can walk away and keep their earnest money. However, builders might try to circumvent this with complex contracts or separate upgrade charges, so the buyer needs to ensure the standard FHA/VA clauses are properly included and signed, or they risk losing their deposit if the contract doesn't explicitly allow cancellation.
Options, Upgrades, and Design Center Choices
Your contract will outline when and how you can choose upgrades. Pay close attention to:
• Whether upgrade deposits are refundable (usually not)
• How late changes affect timelines
• Whether the builder can change suppliers or materials
Also, the “model home magic” is real—what you see in the model often includes tens of thousands in upgrades. Your contract should spell out exactly what’s standard vs optional.
Inspections and Walkthroughs: Know Your Rights
In Arizona, buyers can hire their own home inspector for a new build, but builders sometimes limit:
• When an inspector can enter the site
• What safety requirements apply
• How issues must be reported
Some builders only allow inspections at specific phases, like framing and final walkthrough. I recommend pre-drywall and pre-final walkthrough inspections.
It’s one of the most valuable parts of the process, because even new homes contain mistakes: miswired outlets, missing insulation, backwards plumbing valves—you name it.
Warranties and What They Actually Cover
Home warranties usually follow a three-tier system:
-
Workmanship warranty (typically 1 year)
-
Systems warranty (often 2 years)
-
Structural warranty (up to 10 years)
Many warranties:
• Require you to submit claims through a specific portal
• Limit what counts as “structural”
• Exclude normal settling, nail pops, minor cracks, and cosmetic issues
• Require maintenance logs
HOA and Community Guidelines
This section is often skimmed, then regretted. For example, did you know that most communities with an HOA in Arizona do not allow overnight street parking?
By signing the purchase contract, you will most likely be required to:
• Follow architectural guidelines
• Pay monthly, quarterly, or annual HOA dues
• Maintain your yard to specific standards
• Get approval for exterior changes
• Abide by rules for short-term rentals
If the community has CC&Rs, review them before signing.
Your community or HOA disclosure will disclose certain fees involved with purchasing a home in the community (such as: working capital reserve, reserve contribution fee, administrative or transfer fee, document or disclosure fee). They usually disclose that the HOA fees may increase in the future. They may even increase before you close.
Special Assessments
These are less predictable but important:
(Developers may also impose special assessments for initial infrastructure before the HOA is fully funded. Those should be disclosed before contract execution.)
Ongoing Monthly or Quarterly HOA Dues
After you close, almost every planned community or subdivision will have recurring dues. These cover maintenance of:
-
Common areas
-
Parks and landscaping
-
Amenities like pools, dog parks, and clubhouses
-
Community insurance and management services
In Arizona, typical amounts vary widely based on amenities:
-
Basic neighborhoods: ~$100–$200/month
-
Amenity-rich communities: $200–$400+/month
-
Gated or luxury developments: $400–$800+/month
These dues continue for as long as you own the home.
Arbitration Clauses and Dispute Resolution
Most builder contracts require mandatory arbitration rather than court.
This isn’t always bad—it’s just important to understand. Arbitration tends to favor efficiency, not drama.
Why Your Own REALTOR® Matters
(Yes, even with a new home)
Buyers in Arizona sometimes skip hiring their own agent with new construction because the builder has sales reps on-site. Those reps are friendly and helpful—but they represent the builder, not you.
A great agent is your advocate from start to finish; they will save you some time and legwork finding the right builder and floor plan, guide you through the process, and point out red flags along the way.
And you never pay them—the builder does.
Skipping representation doesn’t reduce the price. It just means you’re walking into the builder’s office without a representation and without an advocate.
NOTE: Most builders require that your real estate agent accompany you on your first visit to the sales center and model homes, or they may not pay for your buyer's agent representation.
The Takeaway: Builder Contracts Aren’t Scary—They’re Just Serious Like Any Other Purchase Agreement
Understanding a new home builder’s contract in Arizona is about clarity, not fear. These contracts set the stage for one of the biggest purchases of your life, and knowing the rules of the game keeps you in control.
Read slowly. Ask questions. Bring representation. Speak to a lawyer if you have legal questions. And treat the contract like a map: not the adventure itself, but the guide that helps you navigate it. After all, it is going to outline the entire process from start to finish. Next thing you know, you will be enjoying your brand new home!
If you'd like me to be your advocate and help you find the perfect new home, I'd be honored to help! Hit one of the contact buttons in the upper right or call me at 623-252-9350. I look forward to hearing from you!
Contact Cinda Rose, REALTOR® Realty ONE Group — Your West Valley New Construction Specialist: 623-252-9350
