The salesperson in a new-home community’s model is usually there on the builder’s behalf, not yours, and Tennessee law gives you a way to find out: a licensee assisting a buyer who has no representation must state their status before providing real estate services and confirm it in writing before an offer is prepared. The warranty works the same way. Tennessee’s implied warranty of good workmanship and materials applies only when the written contract is silent, and a builder can disclaim it in writing, so the contract you sign, not the model you toured, decides what protection you have.
This guide covers the mechanics of buying a newly built home in Middle Tennessee and of selling a resale home that competes with one: where the warranty comes from, how to verify a builder’s license, which code the house is built to, what to inspect during the build, what changes near a flood hazard area, and what to ask about incentives and timelines. None of it is legal advice, and a builder contract is worth having a Tennessee attorney read before you sign.
Who the on-site agent represents
The person who greets you in a model home knows the floor plans, the homesites and the builder’s schedule. In new-home communities that person is typically engaged by the builder, or by a brokerage the builder has hired to sell the community, and the job is to sell the builder’s inventory on the builder’s terms. That can be done honestly and helpfully, but it is not the same job as representing the buyer. Do not assume the salesperson works for you. If that person is a licensee, Tennessee’s agency statute requires them to tell you their status.
What Tenn. Code Ann. 62-13-405 requires
If a licensee personally assists a prospective buyer who is not represented by any licensee, the licensee must verbally disclose their status, whether facilitator, agent, subagent or designated agent, before any real estate services are provided. That status must be confirmed in writing before an offer to purchase is prepared, and the licensee must obtain a signed receipt. The statute is explicit that this written disclosure is not a substitute for a written agreement establishing an agency relationship: signing an acknowledgment of someone’s status does not make them your agent. Licensees must also disclose their role to other licensees on initial contact.
What every licensee owes you anyway
Under Tenn. Code Ann. 62-13-403, a licensee owes all parties to a transaction reasonable skill and care, disclosure of adverse facts of which the licensee has actual notice or knowledge, honesty and good faith, and timely accounting for trust fund deposits. One duty matters directly here: a licensee who recommends another service provider must disclose any interest in that provider or any referral fee. If the on-site agent recommends a lender, title company or inspector, ask, and the statute says the licensee must tell you.
Questions to ask on your first visit
- Are you a licensee, and what is your status in this transaction?
- Whom do you represent, and will you confirm that in writing before any offer is written?
- What is the builder’s policy if I already work with my own agent?
- If you recommend a lender, title company or inspector, do you or your firm have an interest in it or receive a referral fee?
Bringing your own agent
A buyer can be represented by their own licensee under an exclusive buyer representation agreement. TREC Rule 1260-02-.36 requires that licensee to advise the buyer, and confirm in writing, to arrange showings through the licensee, to tell other licensees, for example at an open house, that the buyer is represented, and whether the buyer will owe a commission on a purchase made without the licensee’s help. A model home is exactly the setting that rule anticipates, so say you are represented at the door.
Payment is a separate question. The National Association of REALTORS consumer guide states that a seller’s offer of compensation to a buyer’s agent is not mandatory, requires the seller’s written approval, and cannot be listed on a Multiple Listing Service. With new construction the seller is the builder, so ask the builder directly what it offers and on what conditions, and settle the answer with your own agent in writing before you make an offer.
The contract is the warranty
The warranty page carries real weight in a builder’s purchase agreement, and it is often the page read last.
Tennessee’s implied warranty on a new home comes from a court decision. In Dixon v. Mountain City Construction Co., 632 S.W.2d 538, decided May 3, 1982, the Tennessee Supreme Court recognized that a home buyer has a legitimate expectation that a builder-vendor’s workmanship and materials will meet the standard of the trade for comparable homes. The trial court had read Zack Cheek Builders, Inc. v. McLeod, 597 S.W.2d 888 (Tenn. 1980), as rejecting the concept; the Supreme Court instead adopted the implied warranty of good workmanship and materials for new-home sales by a builder-vendor.
The limits matter as much as the warranty. As Dixon describes it, the warranty covers the sale of a recently completed home, one then under construction, or one the vendor contracts to build, by a vendor in the business of building homes, it runs to the first buyer, and it is implied only when the written contract is silent. Builders and purchasers are free to contract in writing for a warranty on different terms, or to expressly disclaim any warranty.
Read the disclaimer before you pick the finishes
A widely repeated claim holds that Tennessee’s implied warranty on a new home cannot be waived. Dixon says otherwise. A contract that disclaims the implied warranty and substitutes the builder’s own written warranty replaces a court-made standard with the builder’s written terms. That can be a reasonable trade, but it should be made knowingly, with the warranty and disclaimer language read by a Tennessee attorney before you sign.
What to learn from a builder’s written warranty
Builders write their own warranties, and terms differ from one builder to the next. Get a written answer to each of these:
- What is covered, item by item, and what is excluded?
- How long does each category of coverage last, and when does the clock start?
- How is a claim made, to whom, and by what deadline?
- Is any part backed by a third party, and where are its terms?
- Does the warranty transfer to a later owner, and does the contract require arbitration of disputes?
The written warranty matters for one more reason. Under Tenn. Code Ann. 66-5-209, the first sale of a dwelling where the builder offers a written warranty is one of twelve transfers excluded from the Residential Property Disclosure Act, so on that sale the warranty and the contract are the documents that describe what the builder stands behind.
Check the builder’s license before you sign
Tennessee licenses contractors through the Board for Licensing Contractors under Tenn. Code Ann. Title 62, Chapter 6. A common claim that a contractor’s license is required for any job over $3,000 confuses two different licenses.
| License or rule | When it applies | Source |
|---|---|---|
| Contractor’s license | Projects with a total cost of $25,000 or more, including bidding or negotiating a price; masonry at $100,000 or more | Tenn. Code Ann. 62-6-102(4)(A); Board for Licensing Contractors |
| Building for resale | Contracting without a license with a sufficient monetary limit is unlawful, including constructing residences for resale, lease or rent | Tenn. Code Ann. 62-6-103(a)(1) |
| Home Improvement license | Residential remodeling from $3,000 to $24,999 in the counties that currently require it: Bradley, Davidson, Hamilton, Haywood, Knox, Marion, Robertson, Rutherford and Shelby. Excludes building a new home | Tenn. Code Ann. 62-6-501 and 62-6-502; Board for Licensing Contractors |
| Owner-builder exemption | An owner building one residence for their own use, not for resale. Except in counties with a population of at least 777,113, no more than one permit or one residence in any two-year period; more creates a rebuttable presumption of building for resale | Tenn. Code Ann. 62-6-103(a)(2) |
Under 62-6-103(b) and (c), an unlicensed contractor who needed a license may recover only actual documented expenses proven by clear and convincing evidence, and has no mechanics lien. The buyer’s protection is simpler: look the builder up. The Board directs the public to its Verify search at search.cloud.commerce.tn.gov. Search for the entity named in your purchase contract, not just the brand on the sign at the entrance.
Which building code the house is built to
The Tennessee State Fire Marshal’s Office lists the 2018 International Residential Code, with amendments, effective July 16, 2020, as the state’s adopted residential code. Metro Nashville has gone further: Metro Codes’ adopted codes list, updated July 28, 2025, shows the 2024 International Residential Code, the 2024 International Energy Conservation Code and the 2023 National Electrical Code, among others, adopted with local amendments by ordinance BL2025-898. Content saying Metro enforces the 2018 residential code is out of date.
Ask which code edition the permit for your house was issued under, and, outside Metro Codes’ jurisdiction, which edition that city or county enforces. The answer is the baseline the house was designed and inspected against.
Get the contract questions answered before you sign
A conversation about the specific community, builder contract and homesite can change what you ask for.
Inspections during the build
Permits and code inspections answer one question: does the work meet the adopted code? They do not answer whether it matches your contract and selections, and nobody conducting them works for you. Add the rule in Tenn. Code Ann. 62-13-405 that licensees are not obligated to discover or disclose latent defects, and the case for your own inspector is straightforward.
With new construction the issue is timing. Much of what matters is visible only briefly: the foundation, the framing, and the plumbing, electrical and mechanical rough-in before insulation and drywall close the walls.
Put these in writing before you sign
- Whether your own licensed inspector may enter the site, at which stages, and with how much notice.
- Whether the builder will tell you when each stage is ready, before the next trade covers the work.
- How an inspector’s findings are recorded, and whether corrections happen before closing.
- When the final walkthrough happens and how open items are tracked under the warranty.
A written record made during construction is far more useful than a recollection assembled after a problem appears, whether the question ends up under the written warranty or, where the contract is silent, the Dixon standard. If the homesite will use a septic system, TREC Rule 1260-02-.37 requires a licensee preparing an offer to make the buyer aware that a septic system inspection letter is available, for a fee, from the Tennessee Department of Environment and Conservation’s Division of Ground Water Protection.
Building in or near a flood hazard area
Floodplain rules govern how and where a house can be built, not only how it is insured. The rules below are Metro Nashville-Davidson County’s; other jurisdictions set their own, so confirm them for the lot’s jurisdiction.
FEMA defines the Special Flood Hazard Area as the area inundated by the 1-percent-annual-chance flood, mapped as Zone A, AE and related zones. Metro Water Services and Volume 1 of Metro’s Stormwater Management Manual (chapter files dated 2026) require the following:
- New construction or substantial improvement of a residential structure must have its lowest floor, including any basement, at least four feet above the base flood elevation. A 1-foot figure sometimes quoted for new homes is wrong.
- Fill placed in the floodplain must be offset with an equal volume of cut, and development in the floodway is prohibited with few exceptions.
- All development in a Special Flood Hazard Area requires local permits, and a grading permit is required for land disturbance over 10,000 square feet.
FEMA’s Flood Map Service Center at msc.fema.gov shows the effective flood map for an address, and Metro Water Services states that its Development Services Division, at 615-862-7225, will provide the FIRM zone, base flood elevation, floodway status and elevation certificates on request. Ask the builder for the elevation certificate on any home near a mapped hazard area.
Outside the map is not the same as dry
Metro Water Services states that structures in a Special Flood Hazard Area have a 26 percent chance of flooding over a 30-year mortgage, and that properties outside it are not guaranteed to be free of flooding. Metro Water Services also states that a standard homeowner’s policy does not cover flooding, that flood insurance is available to homeowners, condo owners, commercial owners and all renters, and that there is a 30-day waiting period before coverage goes into effect. FEMA’s FloodSmart site lists exceptions, including no wait when the policy is bought while making, increasing, extending or renewing a mortgage. FEMA’s Community Rating System list effective April 1, 2026 rates Nashville and Davidson County Class 8, a 10 percent discount on National Flood Insurance Program premiums. The map, the elevation certificate and the insurance quote are the evidence; a verbal reassurance is not.
Reading the map for a single address is covered step by step in Nashville Flood Zones: How to Read the Map for One Address.
Incentives, preferred lenders, upgrades and timelines: what to ask
Builders set these terms, change them often, and vary them by community and by homesite. There is no reliable market-wide figure for any of them, so the useful work is asking precise questions and getting written answers.
- Incentives: is it a price reduction, a closing-cost credit or an upgrade credit, is it written into the purchase agreement, is it tied to the builder’s preferred lender or title company, and when does it expire?
- Preferred lenders: what is the incentive worth against a written quote from another lender for the same loan, and does anyone recommending the lender receive a referral fee, which 62-13-403 requires a licensee to disclose?
- Upgrades: which features in the model are standard on this plan, which options must be chosen before a construction stage, and are upgrade deposits refundable if the contract ends?
- Timelines: is the completion date an estimate or a commitment, and what does the contract say happens to your rate commitment and incentives if it slips?
- Deposits: who holds them? If a principal broker holds earnest money, TREC Rule 1260-02-.09 requires deposit promptly upon acceptance unless the offer states a date, and, absent a compelling reason, disbursement, interpleader or turnover to an attorney within 21 calendar days of a written request. If the builder holds a deposit directly, the contract governs it.
Selling a resale home when the builder is next door
A resale seller near active construction competes with a product that arrives with a warranty, current code and fresh finishes, and that may carry a written incentive. That competition is manageable once the seller knows what the buyer is actually comparing.
Know what is being built around you
Within Metro Nashville, the evidence is public. Metro’s Building Permits Issued dataset on data.nashville.gov covers permits issued by Metro Codes over a rolling three-year period, updated daily, with fields including ZIP code, council district, parcel, issue date and construction cost. A query run September 12, 2026 returned these counts for the permit type Building Residential – New:
That permit type includes single-family residences, detached accessory dwelling units, duplexes, multifamily townhomes and accessory structures, so it is not a count of new houses. Its value is local: filter by your ZIP code or council district to see which new residential permits were issued near you, when, and at what stated construction cost. That is the inventory your buyer will tour. Outside Metro Codes’ jurisdiction, ask the building department that issues permits for the lot.
What the buyer is weighing
A buyer choosing between a new home and a resale home is comparing price after incentives, the warranty, the age of the major systems, the move-in timeline, and the finished state of the lot and street. A resale home cannot offer a builder’s warranty or construction under today’s code edition. It can often offer a firm closing date, established landscaping, a finished street, and a house the buyer can inspect in full today.
How a resale seller competes with builder inventory
- Price against the builder’s net price after incentives on comparable homes, not the builder’s list price.
- Answer the condition question before the buyer asks it. A pre-listing inspection, with repairs made or disclosed, does part of the work a warranty does for a new home.
- Turn age into history: service records, receipts for major replacements and permits for later work.
- Sell what the builder cannot deliver: an exact closing date, a finished setting and no build schedule.
The disclosure difference
The two sellers carry different paperwork. Unless another 66-5-209 exclusion applies, a resale seller must furnish a residential property disclosure statement covering known material defects or, where the purchaser waives disclosure, a disclaimer statement, under Tenn. Code Ann. 66-5-202, and is not required to conduct an independent inspection to do so. Since Public Chapter 510 took effect July 1, 2024, 66-5-212(c) also requires a seller to disclose a known sinkhole in writing before entering into a contract. The builder’s first sale with a written warranty, by contrast, is excluded from the Act under 66-5-209.
A careful, complete disclosure is not a weakness in that comparison. Paired with a pre-listing inspection, it gives the buyer a documented account of the house. The full seller process is in Selling a Home in Nashville: The Complete 2026 Guide to Pricing, Costs, and Timing, which also covers the case where a builder is the strongest bidder for the lot itself.
If you are the builder or developer
From the other side of the model-home desk, the questions become who staffs the sales office, how buyer agents are treated, how incentives are documented, and how the community is priced and released. That is covered in How to Choose a Sales and Marketing Team for Your Development in Nashville and on the team’s Builders and Developers page.
Frequently asked questions
That depends on the agreement, and Tennessee law requires a licensee to tell you. The salesperson in a model home is typically there on the builder’s behalf, so treat that person as the builder’s representative until you are told otherwise in writing. Under Tenn. Code Ann. 62-13-405, a licensee who assists a buyer with no representation must verbally disclose their status, whether facilitator, agent, subagent or designated agent, before providing real estate services, and must confirm it in writing before preparing an offer. That written disclosure is not an agency agreement. Under 62-13-403, every licensee still owes all parties honesty, good faith and reasonable skill and care.
It can. In Dixon v. Mountain City Construction Co., 632 S.W.2d 538 (Tenn. 1982), the Tennessee Supreme Court recognized an implied warranty that a builder-vendor’s workmanship and materials will meet the standard of the trade for comparable homes. That warranty is implied only when the written contract is silent. Builders and buyers may agree in writing to a warranty on different terms, or expressly disclaim any warranty, so the contract you sign decides what protection you actually have.
Under Tenn. Code Ann. 62-6-102 and 62-6-103, a contractor’s license is required to contract, including bidding or negotiating a price, for a project with a total cost of $25,000 or more, and building residences for resale, lease or rent counts. An owner building a single residence for their own use, not for resale, is exempt within limits. A separate Home Improvement license currently covers residential remodeling from $3,000 to $24,999 in nine counties: Bradley, Davidson, Hamilton, Haywood, Knox, Marion, Robertson, Rutherford and Shelby. The state’s public Verify search at search.cloud.commerce.tn.gov is where to check a license.
Many buyers do, and the time to arrange it is before you sign. Permits and code inspections address whether work meets the adopted code; they are not an inspection on your behalf, and Tenn. Code Ann. 62-13-405 states that licensees are not obligated to discover or disclose latent defects. Ask the builder in writing whether your inspector may visit the site, at which stages, with how much notice, and how findings will be handled before closing.
A buyer can be represented by their own licensee under an exclusive buyer representation agreement, and the order of events matters. TREC Rule 1260-02-.36 requires that licensee to advise the buyer in writing to tell other licensees, for example at an open house, that the buyer is represented. Compensation is a separate question: the National Association of REALTORS states that a seller’s offer of compensation to a buyer’s agent is optional and requires the seller’s written approval. Ask the builder about its policy before your first visit.
Not always. The Tennessee Residential Property Disclosure Act excludes twelve categories of transfer under Tenn. Code Ann. 66-5-209, and one is the first sale of a dwelling where the builder offers a written warranty. On that kind of sale, the written warranty and the purchase contract are the documents that describe what the builder stands behind. A resale seller, by contrast, must furnish a disclosure statement or, where the buyer waives disclosure, a disclaimer statement under 66-5-202, unless another 66-5-209 exclusion applies.
Related resources
- Builders and Developers
- How to Choose a Sales and Marketing Team for Your Development in Nashville
- Selling a Home in Nashville: The Complete 2026 Guide to Pricing, Costs, and Timing
- Nashville Flood Zones: How to Read the Map for One Address
- Selling with the team
- Request a valuation for your property
Talk through a new-construction purchase or sale
Whether you are comparing builder contracts, weighing a new home against a resale one, or selling near new inventory, the first conversation is about your specific property, contract and timing. No obligation.
Sources
- Dixon v. Mountain City Construction Co., 632 S.W.2d 538 (Tenn. 1982), and Zack Cheek Builders, Inc. v. McLeod, 597 S.W.2d 888 (Tenn. 1980) as discussed in Dixon, law.justia.com and courtlistener.com
- Tenn. Code Ann. 62-6-102, 62-6-103, 62-6-501 and 62-6-502 (contractor and home improvement licensing)
- Tennessee Board for Licensing Contractors, Contractor License and Home Improvement License pages, tn.gov/commerce
- Tennessee State Fire Marshal’s Office, currently adopted codes and codes enforcement pages, tn.gov/commerce/fire
- Metro Nashville Codes, Adopted Codes List (ordinance BL2025-898), page updated July 28, 2025, nashville.gov
- Metro Nashville, Building Permits Issued dataset, data.nashville.gov, queried September 12, 2026
- Tenn. Code Ann. 62-13-403 and 62-13-405 (licensee duties and agency disclosure)
- Tenn. Code Ann. 66-5-201 through 66-5-212 (Residential Property Disclosure Act), including 66-5-202 and 66-5-209
- Public Chapter 510 (2024), known sinkhole disclosure, effective July 1, 2024, publications.tnsosfiles.com
- Tennessee Real Estate Commission Rules of Conduct, chapter 1260-02, September 2025 revision, Rules 1260-02-.09, .36 and .37
- National Association of REALTORS, Consumer Guide: Offers of Compensation, nar.realtor
- Metro Water Services, Build Responsibly, Know Your Flood Hazard and Insure Your Property, nashville.gov
- Metro Nashville Stormwater Management Manual, 2026, Volume 1, Chapter 5, nashville.gov
- FEMA Flood Map Service Center, msc.fema.gov; FEMA glossary of flood zones and Community Rating System Eligible Communities list effective April 1, 2026, fema.gov; FEMA FloodSmart, Policy Terms, floodsmart.gov
Figures are current as of the dates stated. Statutes, building codes, licensing rules and floodplain regulations change. This guide is general information about buying and selling new construction in Tennessee and is not legal, construction, insurance or zoning advice. Confirm anything specific to your property, your contract or your circumstances with a Tennessee attorney or the appropriate professional, and with Metro Codes or your county’s offices.