New construction earnest money is almost always non-refundable by contract. That single fact changes the risk profile of every builder purchase in Clark County. 

Unlike a resale transaction, a new construction agreement contains no standard contingencies for financing, inspection, or the sale of a prior home. If you think you might walk away, you need to know the money won't be refunded. Understanding why, and what to do about it, is the difference between a confident purchase and a costly mistake.

Resale Protections Do Not Carry Over to New Construction

In a resale transaction, contingencies are standard and provide buyers a layer of protection throughout the process. A buyer can protect against a deal-breaking inspection, a financing denial, or a sale falling through on a current home. Those same protections do not exist in a builder contract.

The builder's contract serves as the governing document throughout the entire process, and it's worth reading closely.

Erin Smiley is a new construction specialist at New Construction Market Experts who has walked hundreds of buyers through this conversation.

"With new construction, generally speaking, it is going to be non-refundable. If it doesn't appraise, it doesn't matter. There are no contingencies on new construction, and non-refundable earnest money." – Erin Smiley, New Construction Specialist, New Construction Market Experts

An appraisal shortfall that would give a resale buyer an exit ramp typically gives a new construction buyer nothing. The contract doesn't account for market fluctuations, which is exactly why understanding it upfront is so valuable.

The Financial Commitment Grows at the Design Center

The design center deposit is almost always separate from the initial earnest money check, and it is also non-refundable. Most buyers do not realize this until they are already standing in the showroom selecting cabinet finishes.

After selections, customization, and a $20,000 non-refundable design deposit on top of earnest money, none of that returns if the deal falls apart. The total exposure adds up quickly, so it's smart to plan and stay well prepared.

Ask for a full deposit schedule before you sign anything. Understand exactly how much goes down at contract, how much goes down at the design center, and when each payment becomes binding. That schedule exists, and the builder's team is happy to share it. You might just have to ask for it.

Refund Policies May Not Be What You Expect

Some Clark County builders have added a provision that goes beyond simple forfeiture, and it is worth understanding before you sign. The deposit remains non-refundable under the contract, but the builder may reconsider some or all of that money after the canceled home sells. That is very different from having a standard right to a refund. It is a conditional possibility that depends on what happens after you walk away.

Under this newer clause, a buyer who cancels will not receive any refund until the builder resells the home. The timeline could be three weeks, nine months, or longer, with no predictable date for when the money might come back. The timing depends on the market, the home's finishes, the lot location, and factors completely outside the buyer's control. Until that home sells, the buyer could be waiting with no clear end date.

"Some builders have changed their policy where you have to sell the home before you get your earnest money back. What does that mean? You have no idea." – Erin Smiley, New Construction Specialist, New Construction Market Experts

Price cuts or incentives used to move the home after a cancellation may factor into your final refund. Before signing any contract, ask exactly what the refund timeline looks like, whether it is defined, and what conditions could reduce that amount further. Getting the answer in writing, rather than just in conversation, is always the safer approach.

Washington State's Consumer Protection Act (RCW 19.86) offers valuable general protections against unfair or deceptive business practices. It works alongside, rather than overriding, clearly disclosed contract terms, giving buyers a solid foundation of security. Once you have signed a contract that discloses non-refundable deposits, the law generally supports the builder's position.

Do Not Count on a Builder Making an Exception

A builder's executive team may choose to exercise discretion and return some or all of a deposit under rare circumstances. This isn't guaranteed, isn't policy, and isn't written into the contract. It's a case-by-case judgment call, allowing for the right decision in each unique situation.

Our team recently saw that discretion in action. A buyer who had been under contract for eight months faced a sudden family medical crisis and had to prioritize their family's needs. They had to relocate to the Midwest, a difficult but necessary decision for their family's well-being.

"I went to the executive team saying, 'We need to give this earnest money back.' So there are going to be some certain situations where there may be a little bit of flexibility, or maybe they end up giving half of the earnest money back. But just know: in your paperwork, it is non-refundable." – Erin Smiley, New Construction Specialist, New Construction Market Experts

That outcome required an advocate working directly with executive leadership, a compelling personal circumstance, and a home that was straightforward to resell. It is not a framework any buyer should plan around. The contract says non-refundable, and buyers should assume that until they see evidence otherwise.

What Buyers Should Do Before Signing a Builder Contract

The right time to ask hard questions about earnest money is before you sign the contract. Once you sign, you accept the terms, and there is no standard path back.

• Know exactly how much earnest money is required and when each deposit is due.
• Ask specifically about the refund policy in case the transaction doesn't close.
• Find out whether any refund is tied to the builder reselling the home.
• Ask what happens if the builder has to cut the price or offer incentives to move the property first.
• Have a buyer's agent review the full contract language before you sign anything.

The Consumer Financial Protection Bureau recommends that buyers understand all binding financial commitments before executing any purchase agreement. In new construction, that advice matters even more because the builder's legal team writes the contracts.

The builder's sales team works for the builder, while your agent works only for you. That distinction protects your deposit, your timeline, and your overall investment.

For more information, read our post about new construction contract terms. It covers the common terms in new construction contracts and the value of having an experienced buyer's agent.

FAQs About New Construction Earnest Money

How is earnest money handled differently in new construction vs. resale?

In a resale transaction, earnest money is typically held in escrow and returned when a standard contingency isn't met. This can include helpful protections like financing, inspection, or appraisal contingencies. In new construction, those same contingencies are rarely included, so it's worth understanding this difference upfront. The builder's contract governs everything, and the deposit is almost always non-refundable once the contract is signed. Buyers should treat the deposit as a committed expenditure from day one.

What is the total earnest money exposure when buying new construction in Clark County?

Most Clark County builders require an initial deposit of 1% to 3% of the purchase price at signing. A separate, non-refundable deposit is then collected at the design center appointment, so plan for it in advance. This often ranges from $5,000 to $20,000 or more, depending on the builder and the scope of your selections. Total upfront deposit exposure before a single framing nail is driven can easily reach $30,000 to $50,000 on a mid-range new construction home. It's a smart move to ask for the full deposit schedule before signing anything.

What happens to earnest money if a buyer cannot get financing?

Most new construction contracts do not include a financing contingency. If a buyer cannot secure a mortgage, the builder typically retains the earnest money in full. Some builders now add clauses that withhold any refund consideration until the home resells, which can extend the timeline. This is exactly why getting fully pre-approved, not just pre-qualified, before going under contract makes such a difference. The First-Time Homebuyer Mortgage Financing Checklist covers what lenders need before that pre-approval is solid.

Are there any federal protections for new construction earnest money deposits?

Federal law doesn't provide a standard right of rescission for new construction purchase contracts, unlike certain mortgage refinances. Those protections apply to home equity loans under the Truth in Lending Act. Washington State's Consumer Protection Act does offer general protections against deceptive practices. That said, it doesn't override clearly disclosed contract terms, so reading carefully upfront remains valuable. Once a buyer signs a contract disclosing non-refundable deposits, the legal framework generally supports the builder's position.

Can a buyer negotiate refundable earnest money with a builder?

It is uncommon, and most production builders in Clark County will not agree to it. In competitive or high-demand communities, buyers have very little leverage on contract terms around deposits. Some custom or semi-custom builders may offer more flexibility, but you must negotiate it and confirm it in writing before signing. Never rely on a verbal assurance from a sales rep.

What should I look for in a builder contract's refund language?

Look specifically for language describing what triggers forfeiture, and pay close attention to the details. Check whether any refund is conditional on the builder reselling the home. Also note what happens if the builder reduces the price to facilitate that re-sale. It's worth confirming whether the contract specifies a clear timeline for any potential refund. Vague language around refund timelines is worth flagging as a concern before signing. For a broader breakdown, our post about earnest money risk provides a closer look at these clauses.

Understand What You Are Signing Before You Sign It

New construction is genuinely worth it, especially when buyers go in with a clear understanding of their commitment. Earnest money in a builder contract works quite differently than earnest money in a typical resale transaction. Knowing that distinction helps you enter the process with the correct expectations.

NCME exists to walk buyers through these details before they become problems. Connect with the NCME team before your next conversation with a builder. Know exactly what you're signing, and take steps to protect what you're putting down.