New Construction

New Construction Earnest Money and Deposits: How They Work

New Construction · Grapevine & Fort Worth, TX

If you're buying a new construction home in Grapevine or Fort Worth, one of the first surprises is how much money you're asked to put down before the house even has a foundation. New construction earnest money and deposits work differently than they do with a resale home, and the terms can catch buyers off guard if nobody walks them through it first. Here's what actually happens with your money from the day you sign to the day you close.

In my years helping buyers through new construction contracts in Grapevine and Fort Worth, the biggest source of stress isn't the deposit amount itself. It's not knowing what that money is for, when it's due, or what happens to it if plans change. This guide covers all of it in plain terms.

Key Takeaways

• New construction deposits are usually larger than resale earnest money, and they're often collected in more than one payment.
• Builders typically hold the deposit themselves, or through their own title company, instead of a neutral third party.
• Design center selections often require a separate deposit on top of the initial earnest money.
• Builder contracts spell out exactly when your deposit becomes non-refundable, and that point often comes earlier than buyers expect.
• Reading the deposit schedule before you sign matters more in new construction than in almost any other part of the process.

"Read the deposit schedule before you read anything else in a builder contract. That's where the real risk lives."

Amy Beyer, REALTOR®, Century 21 Mike Bowman, Grapevine's Go-To Expert for Listing Services & New Construction in Tarrant Co.

What Is Earnest Money in New Construction?

Earnest money is a deposit you put down to show a builder you're serious about the purchase. It gets applied toward your down payment or closing costs at closing, the same way it would with a resale home.

The difference is size and structure. A resale earnest money deposit in Texas might run one to two percent of the sale price. Builders often ask for more, sometimes several percent of the total price, and they may split it into more than one payment tied to specific points in the build. I've walked Grapevine and Fort Worth buyers through more builder contracts than I can count, and the deposit structure is one of the first things I flag before anyone signs.

How Is New Construction Earnest Money Different From Resale?

With a resale home, your earnest money usually sits with a title company or escrow agent who has no stake in the outcome. That neutral party holds the funds until closing or until the deal falls apart under a valid contingency.

New construction works differently in a few important ways:

• Who holds the money: builders frequently collect the deposit themselves, or through a title company they choose and control, rather than a neutral third party.
• How many payments: many builder contracts call for an initial deposit at signing, then additional deposits at set points, like when the home reaches a certain construction stage or when you finalize design center selections.
• When it's refundable: builder contracts usually specify an exact date or milestone after which your deposit is no longer refundable, even if you change your mind. Resale contracts tend to tie refundability to contingencies like financing or inspection instead of a fixed date.
• Contract length: a to-be-built home can take six months to a year or more, which means your deposit may sit with the builder far longer than a typical 30 to 45 day resale closing.

What Do New Construction Deposits Actually Pay For?

Builders use deposits to secure your spot in their build schedule and cover costs they incur on your behalf before closing. Here's a general breakdown of what different deposits are tied to.

Not every builder uses all four of these. Some collect a single larger deposit up front and nothing further until closing. Others split it out the way the table shows. The only way to know for certain is to read your specific contract, not assume it works like the last new construction purchase you heard about from a friend.

What Happens If You Walk Away From a New Construction Contract?

This is the question that matters most, and it's the one builder sales offices don't always explain clearly. Once you sign, your deposit protection depends entirely on the contingencies written into your specific contract, not on general custom or what you assume is fair.

Common contingencies to look for include financing approval, satisfactory inspection results at defined build stages, and appraisal. If your contract includes a financing contingency and your loan doesn't get approved, you may be entitled to your deposit back. If you simply change your mind after the non-refundable date passes, you likely will not be. This is exactly the kind of clause I review line by line with every buyer before they sign, because the builder's standard contract is written to protect the builder first.

If you're deciding between building a new home in Grapevine or Fort Worth versus buying resale, this is one of the clearest differences: a resale contract typically gives you more built-in protection for your deposit through standard contingencies, while a builder contract requires you to negotiate or confirm those protections up front.

Questions to Ask Before You Sign a Builder Contract

Before you hand over any deposit, get clear answers to these questions. A reputable builder's sales representative should be able to answer all of them without hesitation.

• Total deposit amount: what is the full deposit across every stage, not just the amount due today?
• Refund conditions: under exactly what circumstances is any portion of my deposit refundable, and what is the cutoff date?
• Who holds the funds: is the deposit held by the builder directly, an affiliated title company, or an independent third party?
• Design center lock-in: once I pay the design center deposit, which selections can still be changed and which cannot?
• Delay protections: what happens to my deposit and my rate lock if the build timeline runs longer than expected?

Looking at what's currently building in the area helps put these numbers in context. Search new construction communities in Grapevine and Fort Worth to see current builder offerings and typical deposit structures side by side.

Why Buyers Bring an Agent to New Construction Purchases

Builder sales representatives work for the builder, not for you, and their contracts are written accordingly. Having someone review the deposit and contingency language before you sign is one of the most practical things a buyer's agent does in a new construction purchase, and it costs you nothing extra to have that review done.

I've represented buyers through new construction contracts across Grapevine and Fort Worth for more than two decades, and the deposit clause is the single section I flag most often for changes or clarification before a client signs.

If you're getting ready to tour builder communities or you already have a contract in front of you, I'd like to be the one walking you through it before you sign anything. Let's talk through your specific contract and what it actually commits you to.

Frequently Asked Questions

How much is a typical new construction earnest money deposit?

It varies by builder, but new construction deposits are often larger than resale earnest money, and some builders collect the amount across more than one payment tied to build milestones. Always confirm the total deposit amount in writing before you sign, not just the first payment due at contract signing. It can start as low as $5,000 and go up to $25,000 or more, depending on the price of the home. 

Is new construction earnest money refundable?

It depends entirely on your specific contract's contingencies and refund deadlines. Some deposits are refundable under conditions like financing denial, while others become non-refundable after a set date regardless of the reason. Read this section of your contract closely before signing.

Do builders use a title company for new construction deposits?

Sometimes, but often it's a title company affiliated with or chosen by the builder rather than a neutral third party you select. This is worth asking about directly since it affects how your funds are held and protected.

Can I negotiate builder contract terms, including the deposit?

In many cases, yes, especially deposit amounts, timing, and contingency language, though builders vary in how flexible they are. Having someone review and negotiate the contract on your behalf before you sign gives you the best chance of favorable terms.

What's the difference between earnest money and a design center deposit?

Earnest money secures your build slot and is part of your overall purchase funds. A design center deposit is often a separate charge tied specifically to locking in structural or finish selections, and it may have its own refund rules apart from your initial earnest money.

About Amy

I've been a licensed Texas Realtor since 2002, with more than two decades spent guiding buyers through new construction purchases across Grapevine and Fort Worth. I'm regularly recognized among Grapevine's top 10 listing agents, and I work with Century 21 Mike Bowman, the number one Century 21 office in Texas with the highest market share in Grapevine.

Amy Beyer, Realtor | Grapevine, TX | AmyBeyerRealtor.com | Powered by Century 21 Mike Bowman | TREC #0500623 since 2002

This article offers general guidance based on common builder contract practices and isn't legal or financial advice; have your specific contract reviewed by a qualified professional. Equal Housing Opportunity.

More on the Blog

Next up: a look at how to read whether you're in a buyer's or seller's market right now, and what that actually means for your timeline. That post is coming soon in this series. In the meantime, if you have questions about a new construction contract in front of you, let's talk.