Protecting Your New Construction Deals in Arizona: What Every Buyer (and Builder) Needs to Know

As a real estate agent who’s helped many clients navigate the Arizona new construction market, I’ve seen firsthand how quickly things can change — especially when building material prices spike due to tariffs or supply chain issues.

If you're buying a new build in Phoenix, Gilbert, Chandler, Scottsdale, or anywhere across the Valley, or you're a builder trying to stay ahead of rising costs, it's more important than ever to protect your deals and expectations upfront.

Here’s what I’m sharing with my clients — and what every buyer, builder, and agent needs to know right now:

For Builders and Developers I Work With:

1. Use Escalation Clauses Wisely
An escalation clause allows a builder to adjust the home price if the cost of materials like lumber or steel rises beyond a certain point. If you’re selling new builds, this can protect your margins — but you’ll want clear language defining:

• Which materials are covered

• What triggers a price change

• How new pricing is calculated

Without clarity, escalation clauses can cause unnecessary friction with buyers later.

2. Update Force Majeure Clauses
Generic force majeure clauses aren’t enough anymore.
Today, contracts should specifically cover tariffs, supply chain disruptions, and changes in government trade policies — so builders have legal flexibility if external events cause delays or cost increases.

3. Lock In Pricing Early (Whenever You Can)
Builders who lock in supplier pricing earlier are better positioned to protect their bottom line.
It's also smart to include provisions for price adjustments if unavoidable cost increases occur after contract signing.

4. Offer Material Substitution Options
In the case that a tariff causes material shortages, contracts should allow the use of different, code-compliant materials without derailing the project.

5. Add Renegotiation or Walk-Away Language
If prices skyrocket, both parties should have an opportunity to renegotiate — or even cancel — without major penalties. It’s about fairness and setting proper expectations early.

For Buyers I Represent on New Construction:

6. Understand Escalation Clauses Before You Sign
I always advise my clients: Know what you're agreeing to.
Escalation clauses can dramatically change the final price if material costs rise during construction. It's better to be informed upfront than caught off guard later.

7. Read (and Question) the Fine Print
Before committing to a new build, buyers should ask:

• Are home prices fixed or can they change during the build?

• Under what conditions are deposits refundable?

• How does the builder handle delays caused by tariffs or supply chain issues?

• Is there a force majeure clause in the contract that affects timelines?

I review these details with my clients so there are no surprises.

Why It Matters Right Now

Arizona continues to be one of the hottest real estate markets in the country, and new construction homes are a major part of that growth.
But with the real potential for material shortages, price spikes, and construction delays, protecting your deal — legally and financially — has never been more important.

Whether you’re a buyer entering a builder contract, or a builder preparing for the months ahead, I’m here to help you navigate this market with confidence.

Thinking about buying a new build in Arizona?
Or selling a new construction project?
Let’s connect — I’ll help you protect your investment from day one.

Bonus Tip:
I also stay up-to-date with legal experts like Patrick MacQueen at Medalist Legal, who provide additional insight into new construction contracts and best practices.