EMPLOYMENT AGREEMENT

EXHIBIT 10.1

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (“Agreement”) made this first day of July 2005, between NVR, INC., a Virginia corporation (the “Company”) and DWIGHT C. SCHAR, (the “Executive”). References within this Agreement to the Company refer to NVR and its subsidiaries and affiliates.

WHEREAS, the parties wish to terminate all prior employment agreements and amendments thereto; and

WHEREAS, the parties wish to establish the terms of the Executive’s future employment with the Company.

ACCORDINGLY, the parties agree as follows:

of the Board of Directors of any companies, businesses, or charitable organizations, so long as such investments or companies do not compete with the Company, subject to the limitations set forth in Section 7.1.

This Agreement and the employment relationship hereunder will continue in effect for five and one half (5 1/2) years from July 1, 2005 through January 1, 2011. It may be extended beyond January 1, 2011 by mutual, written agreement at any time. In the event of the Executive’s termination of employment during the term of this Agreement, the Company will be obligated to pay all base salary, bonus and other benefits then accrued, as well as cash reimbursement for all accrued but unused vacation, plus, if applicable, the additional payments provided for in Sections 6.1, 6.2, 6.3, 6.5 and 6.7 of this Agreement.

ONE HUNDRED SIXTY-SIX THOUSAND SIX HUNDRED AND SIXTY SIX DOLLARS AND SIXTY SIX CENTS ($166,666.66). The Company’s Board of Directors in its sole discretion may increase, but may not reduce, the Executive’s annual base salary.

The Executive is a participant in the 1998 NVR, Inc. Management Long-Term Stock Option Plan, the 2000 Broadly Based Stock Option Plan and the 2005 Non-Qualified Stock Option Plan. The Executive has entered into separate agreements governing the terms of his participation in the Plans.

The Executive has certain amounts fully earned under previous annual and long-term incentive plans deferred within the Company’s Deferred Compensation Plan. The amounts deferred are held in a fixed number of shares of NVR, Inc. common stock within a Rabbi Trust, and will be distributed to the Executive upon separation of service from the Company. All amounts held for the Executive by the Rabbi Trust pursuant to the Deferred Compensation Plan are fully vested and not subject to forfeiture for any reason, regardless of the reason for termination.

base salary, as well as his accrued pro-rata bonus (on the assumption that the maximum annual bonus would have been paid pursuant to Section 3.2) through the date of termination. Payment of such amount shall be in twelve equal monthly installments beginning on the first day of the first month following the date of termination. For purposes of this Agreement, “Change of Control” means (i) any transaction or series of transactions (including, without limitation, a tender offer, merger or consolidation) the result of which is that any “person” or “group” (within the meaning of Section 13 (d) and 14 (d) (2) of the Exchange Act), becomes the “beneficial owner” (as defined in rule 13d-3 under the Exchange Act) of more than 20 percent of the total aggregate voting power of all classes of the voting stock of the Company and/or warrants or options to acquire such voting stock, calculated on a fully diluted basis, or (ii) if all or substantially all of the assets of the Company are sold or otherwise transferred to any individual, corporation, partnership, trust, association, joint venture, pool, syndicate or similar organization or group acting in concert or (iii) the Company is liquidated or dissolved or adopts a plan of liquidation or (iv) a merger, consolidation or other reorganization or business combination with any party including a leveraged buy-out or a going private transaction and where there has been a significant reduction in Executive’s responsibilities.

The covenant set forth in Section 7.1 shall be applicable during the employment term and for a period of two (2) years after termination in the event the Executive is terminated pursuant to Section 6.3 “Retirement”, Section 6.4 for “Cause”, Section 6.5 “Without Cause” or to Section 6.6 “Voluntary”.

In the event that the Executive terminates pursuant to Section 6.7 “Voluntary Termination – Change of Control” or Section 6.8 “Voluntary Termination-Change in Senior Management Accompanied by Change in Business Philosophy”, the non-competition provisions of Section 7 become void. All other provisions in Section 7 remain in full force and effect.

management, operation or control of, or be a director, agent, representative, shareholder of more than 1% of the outstanding stock, partner, employee, officer, or consultant of, any enterprise of any kind that is engaged in the Homebuilding Business or Mortgage Financing Business (“Competing Business”); investments made by the Executive in private equity or hedge funds/vehicles for which the Executive does not hold a controlling financial or management interest is not considered a Competing Business; (iii) induce or attempt to induce any customer or potential customer of the Company to discontinue, in whole or in part, business, or not to do business, with the Company, (iv) hire or attempt to hire any person now or hereafter employed by the Company, or (v) utilize the services of or attempt to acquire real property, goods or services from any developer or sub-contractor now or hereafter utilized by the Company.

Executive further agrees and authorizes any court of competent jurisdiction to enforce any such provision or portion hereof in order that such provision or portion hereof shall be enforced by such court to the fullest extent permitted by applicable law.

NVR, Inc.

Attn: Senior Vice President of Human Resources

11700 Plaza America Drive

Suite 500

Reston, VA 20190

Dwight C. Schar

1300 South Ocean BLVD.

Palm Beach, FL 33480

thereof, nor shall any waiver on the part of any party of any right, power or privilege hereunder, nor any single or partial exercise of any right, power or privilege hereunder, preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

Any controversy or claim arising out of or in connection with this Agreement shall be settled by arbitration in accordance with the rules then pertaining of the American Arbitration Association. Such controversies shall be submitted to three arbitrators, one arbitrator being selected by the Company, one arbitrator being selected by the Executive, and the third being selected by the two so selected by the Company and the Executive or, if they cannot agree upon a third, by the American Arbitration Association. In the event that either the Company or the Executive, within one month after any notification of any demand for arbitration hereunder, shall not have selected its arbitrator and given notice thereof by registered or certified mail to the other, such arbitrator shall be selected by the American Arbitration Association. Confirmation of any award in any such arbitration may be held in any court having jurisdiction of the person against whom such award is rendered. Regardless of the circumstances giving rise to the need for arbitration, until such arbitration shall be finally determined and ended, the base salary of the Executive pursuant to Section 3.1, subject to the provisions of Section 6, shall be paid monthly until the expiration of the term of this Agreement, and Bonus pursuant to Section 3.2, subject to the provisions of Section 6, shall be earned and paid in accordance with Section 3.2 until the expiration of the term of this Agreement. If the results of such arbitration are more favorable to the position taken by the Executive than that taken by the Company, in the opinion of the arbitrators, then all costs and expenses incurred by the Executive in connection with such arbitration shall be paid by the Company.

This Agreement shall be effective as of July 1, 2005.

IN WITNESS WHEREOF, The parties hereto, intending to be legally bound hereby, have executed this Agreement as of the day and year first above mentioned.