A new construction contract in Idaho is fundamentally different from the standardized RE-21 used in resale transactions. Builder contracts are drafted by the builder's attorneys, are typically 30 to 80 pages long, and protect the builder asymmetrically. The provisions that matter most are earnest money structure and refundability, change order procedures, allowance language, default and remedy provisions, late-delivery remedies, financing requirements, and dispute resolution. Read the actual contract — not the marketing summary — and consider attorney review for any build above $750,000.
Most new construction buyers in Idaho sign the builder's contract without reading it carefully. The contract was written by the builder's attorneys to protect the builder, not by a neutral third party to be balanced. This is not a complaint about builders — it is just the reality of how new construction transactions work, in Idaho and almost everywhere else. The buyer's protection comes from reading the contract, asking the right questions, negotiating the terms that can be negotiated, and walking away from terms that can't be made acceptable.
This article is a practical orientation to what new construction contracts in Idaho actually contain, what to compare, and what to ask an attorney about. It is education, not legal advice — see the disclaimer below.
Builder Contract vs. Idaho RE-21: A Different Category of Document
If you have bought or sold a resale home in Idaho, you have signed the RE-21 — the standardized purchase and sale agreement published by Idaho REALTORS and used in nearly every resale transaction in the state. The RE-21 is balanced. It was drafted to serve both parties. Standard fields exist for inspection contingency, financing contingency, appraisal contingency, earnest money, and so on, with industry-accepted defaults.
A builder contract is none of those things. It is drafted by the builder's attorneys, with the builder's interests in mind, and presented to the buyer as a take-it-or-leave-it document — though more provisions are negotiable than the builder will initially suggest. The structural differences are significant enough that the two documents should not be compared section-by-section. They are different categories of agreement.
| Provision | RE-21 (Resale) | Builder Contract |
|---|---|---|
| Length | 10 to 14 pages | 30 to 80+ pages with addenda |
| Earnest money | 0.5% to 2% typical, refundable per contingencies | $5K to 10%, often non-refundable past milestones |
| Inspection contingency | Standard, with negotiated remedy period | Often limited or absent; builder's own QA process substituted |
| Financing contingency | Standard, defined timeline to obtain approval | Often shorter, sometimes tied to builder's preferred lender |
| Closing date | Fixed date | Estimated date with broad builder-favorable delay tolerance |
| Selection / specification | Property sold "as-is" with disclosures | Detailed allowance and selection schedule, change order procedures |
| Default remedies | Roughly balanced between buyer and seller | Asymmetric — builder remedies broader than buyer remedies |
| Dispute resolution | Mediation typically encouraged, court available | Mandatory binding arbitration common |
Earnest Money and the Deposit Schedule
The single biggest financial difference between a resale and new construction contract is the earnest money. On a resale, earnest money is typically 0.5% to 2% of the purchase price, refundable while the contingencies are active.
On new construction, earnest money is larger and the refund picture is more complex. Production builders typically require $5,000 to $15,000 at contract signing. Semi-custom and custom builders may require larger deposits — sometimes 5% to 10% of the purchase price total, broken into stages tied to construction milestones (contract signing, foundation completion, framing complete, drywall complete).
The question to focus on is not "how much" but "when does it become non-refundable." Most builder contracts include language like:
"Earnest money shall be refundable to Buyer only in the event of Builder's material breach of this Agreement. Upon commencement of construction, all earnest money becomes non-refundable except as provided in Section [X]."
The buyer should understand what "commencement of construction" means in the contract (sometimes site work, sometimes foundation pour), what Section [X] actually provides as exceptions, and how that protection compares to typical resale contingency protection.
Change Orders and Allowance Language
Change orders are the most predictable source of cost overrun in new construction. Every selection you change after the contract is signed, every plan modification, every upgrade in the design studio — all are change orders. The contract specifies how change orders are priced, when they must be requested, what they cost in fees and markup, and how they affect the build timeline.
Look specifically for:
- Change order fee structure — flat fee per change ($50 to $250 is typical), percentage markup on the change cost (often 15 to 25 percent), or both.
- Deadline for changes — most builders cut off changes by a specific construction milestone (often framing complete or rough-in complete). After that, changes either cannot be made or carry significantly higher fees.
- Selection allowance language — many contracts specify an "allowance" for certain categories (flooring, lighting, appliances) rather than fixed selections. The allowance is the dollar amount the builder will pay; anything over the allowance is a change order at full retail plus markup.
- Design studio appointment cadence — how many appointments you get, how many decisions you have to make in each, and the consequences of missing scheduled selection deadlines.
The allowance trap is real: a "lighting allowance of $4,000" may sound like a lot until you walk into the design studio and discover that the recessed cans, exterior fixtures, decorative pendants, ceiling fans, and bath sconces add up to $7,500 at the builder's vendor pricing. The $3,500 overage is paid in cash, often with markup.
Timeline and Late-Delivery Remedies
New construction contracts almost never include a fixed closing date. They include an "estimated closing date" or "anticipated completion date" with broad force-majeure language and a delay tolerance — typically 60 to 180 days past the estimated date — before the buyer has any remedy.
Things to confirm:
- The defined delay window — at what point does the late-delivery remedy actually apply?
- The remedy itself — termination with full earnest money return? Per-day liquidated damages? Right to terminate with partial refund? Each is materially different.
- What counts as a builder-caused delay versus a buyer-caused or force-majeure delay. Weather, supply chain, permitting, and change orders are typically excluded from the builder's delay tolerance.
- How interim financing costs are handled if the delay extends past the buyer's rate lock or extends temporary housing arrangements.
Late delivery is a relatively common occurrence in the Treasure Valley new construction market. The buyer's remedy section is one of the most important parts of the contract — and one of the most negotiable, since builders prefer to keep buyers under contract rather than refund earnest money even when delays are real.
Builder Financing Requirements and Incentives
Most production builders in the Treasure Valley offer incentives — closing cost credits, design studio credits, sometimes interest rate buydowns — contingent on using the builder's preferred lender. The incentive is real money. The question is whether the trade is worth it.
What to compare:
- Interest rate. Get a written rate quote from the builder's lender and from at least one independent lender. Compare on the same loan amount, same term, same date.
- Total lender fees. Origination, processing, underwriting, lock fees. The builder's lender's APR is the real cost — not the rate alone.
- The value of the incentive. Is the closing cost credit $3,000 or $10,000? Is it a fixed-dollar credit or a percentage?
- The total comparison. Total cost over the first 5 to 7 years (the typical time to refinance) is what matters, not the rate at closing.
The contract should preserve your right to use your own lender if you choose — even if you forfeit the incentive. Verify this in writing. Some builder contracts include language that arguably penalizes the buyer for not using the preferred lender beyond just losing the incentive. That language is worth pushing back on.
"The builder's preferred lender incentive is real money. Whether it is the best deal depends entirely on the comparison — and the comparison is the buyer's responsibility to do."
Default Provisions and Dispute Resolution
Builder contract default provisions are typically asymmetric. The buyer's default consequences (loss of earnest money, potentially loss of additional deposits, potentially specific performance) are usually severe and clearly spelled out. The builder's default consequences are usually narrower and harder for the buyer to invoke.
Things to read carefully:
- What constitutes buyer default — failure to fund, failure to make selections by deadlines, failure to obtain financing? How is each handled?
- What constitutes builder default — failure to complete by what date? Material non-conformance with what specification? Bankruptcy or insolvency?
- Liquidated damages provisions — many builder contracts cap the buyer's damages at the earnest money deposit, regardless of actual harm.
- Mandatory binding arbitration — most builder contracts require disputes to go to arbitration rather than court, often through a specific arbitration provider chosen by the builder. Arbitration is often faster than litigation, but it limits appeal rights and may favor the party with prior experience using the arbitration provider.
- Venue and governing law — confirm the contract is governed by Idaho law and that any arbitration or litigation will occur in a reasonable venue.
What to Negotiate
Builders often present contracts as non-negotiable. Many provisions actually are. The buyer's leverage depends on the market, the builder's inventory situation, the price point, and how well the buyer is represented.
Provisions Worth Trying to Negotiate
- Earnest money amount and the threshold at which it becomes non-refundable
- Late-delivery remedies and the delay tolerance window
- Specific allowance amounts in categories where the standard allowance is clearly inadequate
- Inspection rights at pre-drywall and pre-close — written into the contract, not just verbally promised
- Right to use your own lender without contract penalty beyond losing the incentive
- Punch list and post-close repair commitments — what gets fixed, on what timeline, with what recourse
- Warranty terms and the identity of any third-party warranty company
- Cap on change order markup
- Dispute resolution venue (Boise vs. wherever the builder prefers) and selection of arbitration provider
Not all of these will be negotiable on every contract with every builder. The buyer's approach should be: prioritize the two or three provisions that matter most, push hard on those, and accept the rest as the cost of buying new construction.
Lot Purchase and Construction Agreement (Custom Builds)
For fully custom builds where the buyer owns or is acquiring the lot separately from the build, the contract structure is different. Typically there are two agreements:
- Lot purchase agreement — a real estate purchase contract for the land, often using a modified version of the RE-21 or a builder-supplied lot purchase form.
- Construction agreement — a separate contract governing the build, typically cost-plus or fixed-price, with detailed scope, payment schedule, and change order procedure.
Custom builds also typically require a construction loan that converts to a permanent mortgage at completion. The construction loan is its own contract, with its own draw schedule, inspection requirements, and interest treatment during construction.
Custom build contracts are where attorney review is most clearly worth the cost. The structure is more complex, the dollar amounts are larger, and the bespoke nature of the build means standard templates often don't fit.
The Bottom Line
A new construction contract in Idaho is a much heavier document than the RE-21 used in resale, and it is structurally tilted toward the builder. That tilt is not a scandal — it is the standard convention in the industry. The buyer's protection is to read the document, ask focused questions, negotiate the terms that matter most, and walk away from terms that cannot be made acceptable.
For most new construction buyers, an experienced buyer agent who specializes in new construction transactions provides most of the protection needed on a production builder contract. For semi-custom and custom builds, or for any contract above $750,000, an attorney review is generally worth the cost.
The contract governs what happens during the build and what happens at closing. It also governs what happens at the walkthrough — which is why reading the contract before the walkthrough is what makes the walkthrough effective.