Buyer guide

How to choose a homebuilder

Buying new construction. Warranties, builder-affiliated lenders, contract terms, and what a builder’s filings tell you.

Published 2026-10-21. All guides · Developers and builders hub

Our perspective

Incentives are part of the price. A builder’s home-sales gross margin shows how much room it has to fund rate buydowns and closing-cost credits, which is why it is in our score. Across the 5 public builders we compare, median revenue fell 3.5% while the median net margin was 12.3% (derived from their annual reports; see the 2026 report). If an incentive depends on using the builder’s lender or title company, price the same loan elsewhere: the incentive is worth what it saves compared with your best outside offer. (CFPB, Request and review multiple Loan Estimates)

Checklist

Get the builder warranty in writing and check what it covers and for how long. The FTC says workmanship coverage on most components usually expires after the first year, HVAC, plumbing and electrical coverage is generally two years, and some builders cover major structural defects for up to ten years. (FTC Consumer Advice, Warranties for New Homes)
If the builder refers you to an affiliated lender or title company, expect a written Affiliated Business Arrangement disclosure explaining the relationship and estimated charges. (CFPB, Regulation X § 1024.15, affiliated business arrangements)
Request Loan Estimates from more than one lender, including at least one not affiliated with the builder, for the same loan type. (CFPB, Request and review multiple Loan Estimates)
Read the purchase contract for completion dates, delay remedies, price changes, deposit refund terms and dispute resolution (the FTC notes many new-home warranties offer or require mediation and arbitration). (FTC Consumer Advice, Warranties for New Homes)
Consider your own inspector for pre-drywall and final inspections, even on a new home.
Check HOA documents, fees and any special assessments for the community.

Questions to ask

What exactly is included in the base price, and what are the most common upgrades buyers add?
Is the incentive available if I use my own lender? If not, what is it worth in dollars?
Who backs the structural warranty, the builder or a third party, and how do I file a claim?
What is the expected completion date, and what happens if it slips?
Can my inspector visit before drywall and at the final walkthrough?

Red flags worth clarifying

None of these proves a problem on its own. Each is a reason to ask for an explanation in writing before you sign.

Incentives that are only described verbally.
Pressure to commit to the affiliated lender before you have compared offers.
Warranty terms you can only see after signing.
Refusal to allow independent inspections.
Deposit terms that are not clear before you sign.

What the public record can and can’t tell you

Can show

Homes closed, closings trend, gross and net margins of public builders (10-K)
Disclosed litigation and warranty reserves
Which firms appear on NMHC developer and builder lists (multifamily)

Can’t show

Build quality in a specific community
How a builder handles an individual warranty claim
Data for private builders

How our scores work here

Firms here get a public-record score: a number out of 10 with its breakdown, built only from audited filings, regulator and court records, and rankings researched by third parties. Criteria and weights: Homes closed (25%); Closings trend (25%); Home-sales gross margin (25%); Net margin (25%). Today 5 of the 9 firms we profile in this section can be scored; the others show “Not yet scored”, which means the public record does not cover every criterion. It says nothing about service quality. We attach no label, tier or recommendation to a score, and a lower number is not a judgment of how a firm treats clients. Use it to see what is documented, then do the checks below.

Explore

Developers and builders hub · National homebuilders · Luxury builders · Multifamily developers · Commercial developers · D.R. Horton · Lennar · PulteGroup · NVR · Toll Brothers · D.R. Horton vs Lennar · PulteGroup vs Toll Brothers · Mortgage lender and title guide · Home warranty and inspector guide

Questions

Do I have to use the builder’s lender?

Federal rules on affiliated business arrangements require a written disclosure of the relationship and generally bar a referrer from requiring use of a particular settlement provider, with limited exceptions. Builders may tie incentives to their lender, so compare the total cost with an outside Loan Estimate.

Is a builder warranty the same as a home warranty?

No. The FTC explains that a builder warranty comes with new construction and covers items that are a permanent part of the home, while a home warranty is a service contract that costs extra.

Should I inspect a brand-new home?

Many buyers do, because an independent inspector works for you, not the builder. Ask the builder about access before signing.

What does the homebuilder score measure?

Homes closed, closings trend, home-sales gross margin and net margin from filings. A number out of 10, not a recommendation.

Regulatory and legal points summarize the linked primary sources as read on 2026-10-21. Rules vary by state and change over time; this guide is general information, not legal or financial advice.

Sources

FTC Consumer Advice, Warranties for New Homes · accessed 2026-10-20
CFPB, Regulation X § 1024.15, affiliated business arrangements · accessed 2026-10-20
CFPB, Request and review multiple Loan Estimates · accessed 2026-10-20

Last verified 2026-10-21. Figures were re-read from the linked sources that day.

View changelog

2026-10-21 Guide published.