What characteristic defines a builder's contract?

A builder's contract is typically not contingent upon an appraisal because it establishes a direct agreement between the builder and the buyer regarding the terms of construction and payment. In these contracts, the price is usually fixed, meaning the buyer has already agreed on the cost of the construction project based on the builder's estimates and specifications. Since the agreement is for the specific work to be completed and paid for, it does not rely on an appraisal to determine value.

While appraisals are essential in purchasing existing homes to ensure the price aligns with the market value, builder's contracts function differently. Buyers are often well aware of the property's anticipated value as they are directly involved in the design and specifications of the new home. As such, appraisals typically do not play a determining role in these contracts, setting them apart from other types of real estate agreements.

The other options, while they may be aspects considered in various contractual agreements in real estate, do not fundamentally define a builder's contract. For example, while a financing contingency may be a part of some contracts, it is not a defining characteristic of builder's contracts, which focus instead on the construction process and costs.