If you walk, expect to lose the deposit unless your contract gives you a specific out. Whether the first builder negotiates depends on how much unsold inventory they are sitting on. Builder contracts are written to protect the builder. A standard state residential purchase agreement (in California, the California Association of Realtors form) is drafted to balance buyer, seller, and broker; a builder's contract is a different animal. Read yours closely and see what outs, if any, you actually have. Your leverage comes down to supply and demand at that community: how many homes the builder still has to sell and how much traffic they are getting, which varies by region and price point. A useful signal is standing unsold inventory. If that builder has a lot of finished homes sitting, there may be room to renegotiate your terms so you do not have to walk at all. If homes are selling briskly, you have little leverage and are probably looking at forfeiting the deposit. The only way to find out is to ask. Have your agent raise it directly, framed as wanting to make the deal work, and see whether the builder would rather improve your terms than lose you. Go in knowing the deposit is at risk if the answer is no.