New-Construction Glossary: 25 Terms Buyers Should Know

Walk into any model home and the sales rep will speak fluent builder. Here is the translation guide — the 25 terms you will hear most, in plain English.

1. Base price. The starting price of a floorplan before lot premium, structural options, or design upgrades. Think of it as the "before anything" number — almost nobody pays it.

2. Lot premium. An extra charge for a desirable homesite — cul-de-sac, wooded, corner, water view, larger lot. Premiums are among the most negotiable line items.

3. Structural options. Changes to the bones of the house made during construction: adding a bedroom, extending the patio, adding a third-car garage bay. These must be decided before or early in the build — you cannot add them later.

4. Design options (upgrades). Finishes chosen at the design studio: flooring, cabinets, countertops, lighting, plumbing fixtures. Priced at retail-plus; a design credit rarely stretches as far as buyers expect.

5. Quick move-in (QMI) / spec home / inventory home. A home the builder started (or finished) without a buyer. Usually the best deals in the community — the builder wants it sold, and incentives concentrate here.

6. To-be-built / pre-sale. You pick a lot and floorplan, and the builder constructs it for you. Maximum choice, maximum wait.

7. Phase (release). Builders open a community in sections. Each new phase release can bring new lots, new pricing, and new incentives — which is why release timing matters.

8. Lot release. When the builder makes a new batch of homesites available for sale. The best lots in a phase go first, often to buyers on a VIP or interest list.

9. VIP / interest list. The builder's own waitlist for early notice of lot releases. Being on it costs nothing and is the single best way to get lot choice — ask to be added before you are ready to buy.

10. Earnest money deposit. Your good-faith deposit with the offer, held in escrow and applied to the purchase at closing. On new construction, expect it to be higher than resale — and understand exactly when it becomes non-refundable.

11. Design deposit. Money due at the design-studio appointment, applied toward your upgrades. Often non-refundable once selections are placed with vendors.

12. Rate buydown. The builder pays to reduce your mortgage interest rate — temporarily (lower for the first year or two) or for the full loan term. Ask for the math in writing: what rate, for how long, at what cost.

13. Closing-cost credit. A dollar amount from the builder applied to your settlement costs. Often tied to using the builder's preferred lender — read the conditions.

14. Preferred lender. A mortgage lender the builder partners with. Not a requirement — you can always use your own lender — but incentives are sometimes tied to them. Compare total cost, not headlines.

15. Extended rate lock. A rate lock lasting 6–12 months to cover the build timeline, usually for a fee. Standard 60-day locks do not survive a new-construction build.

16. Pre-drywall walkthrough (pre-drywall orientation). Your inspection of the home after framing, electrical, and plumbing are in but before drywall closes the walls. The one chance to see — and photograph — everything hidden inside your walls.

17. Punch list. The list of incomplete or defective items noted at walkthroughs, which the builder agrees to fix before or after closing.

18. Final walkthrough (new-home orientation). Your last inspection before closing: systems demo, punch-list review, warranty paperwork. Never rush it.

19. Certificate of occupancy (CO). The local government's sign-off that the home is safe to live in. No CO, no closing — and no moving in.

20. HOA (homeowners association). The community governing body. Sets dues, enforces covenants, maintains common areas. New HOAs have no track record — read the budget and the covenants before you buy.

21. Covenants / CC&Rs. The recorded rules governing what you can do with your home and lot — fences, paint colors, additions, rentals. They survive the builder's departure.

22. Warranty (builder's warranty). Typically one year for workmanship and materials, two years for mechanical systems, and up to ten years for major structural defects — but terms vary by builder. Get the warranty document, not the brochure summary.

23. 11-month (warranty) walkthrough. A follow-up inspection near the end of your first year to catch warranty items before coverage expires. Put it on the calendar at closing.

24. Elevation. The exterior style of a floorplan — the same plan can wear several different "faces." Some elevations cost extra; streetscape rules may limit which elevations can sit next to each other.

25. Homesite / lot. The parcel your home sits on, identified by lot number and plat reference. Whatever lot you are picturing should match the lot number in the contract — verify it on the site plan.

You do not need to memorize all 25. But before you tour, know the difference between a structural option and a design option, between a lot release and a phase, and between a rate buydown and a closing-cost credit. Those distinctions are where buyers win or lose real money — and where going in represented, rather than walking in alone, pays for itself.