Home Builders Key Terms

Start your career with knowledge of home builders key terms

Home builders need to know more than how to build a home that people will like. There are many terms that they must understand regarding the legalities of building homes. For example, builders should hold builder's risk insurance to ensure that they are protected from accidents. They must also ensure that the building is "up to code" and that the residents have a Certificate of Occupancy before moving in. Whether dealing with allowances or making choices based on SEER, thorough knowledge of these key terms will help you out.


When building a new home, there are many different choices that the home buyer needs to make, such as the types of wood used in cabinetry or accessories in the bathroom. There can be a wide range in costs for these types of things. When giving an estimate, the builder makes allowances for these items. This is an estimation of the costs. If the actual cost is less, the buyer gets a refund, but if the cost is more, the buyer must pay more.

Builder's risk insurance

Builder's risk insurance is a type of insurance that covers a home as it is being built. It helps protect the builder from any losses.

Building codes

Building codes are laws that cities and states make to ensure a minimum level of safety within a building. All home builders must make sure that their buildings are "up to code," which means that they must follow the rules when building.

Certificate of Occupancy

After the building company completes a project, the County Building Department will issue the Certificate of Occupancy, showing that the building has been inspected and that it is suitable for living.
New York City Government.

Conditions, covenants, and restrictions (CC and Rs)

The conditions, covenants and restrictions, or CC and Rs, on a property make stipulation for how a particular property can be used, such as whether it is a residential or commercial property.

Seasonal Energy Efficiency Ratio (SEER)

The seasonal energy efficiency ratio (SEER) is a rating method for air conditioners. When building a home, builders should opt for a central air conditioner with a high SEER rating in order save the homeowner the most energy.