It's CA Civil Code Section 1675:

CA Codes (civ:1675-1681)

Note that the statute is not cut and dried and liquidated damage could end up more than 3% under certain circumstances.

No, it won't be $150. He's either lying or he just doesn't know any better. Ask for copies of each of their purchase contracts before you hand over any money. Look for the "liquidated damages" provision (also known as "forfeiture".

In the following contract it's covered in Paragraph 2. Earnest Money Deposit.

http://www.purchasing.cmich.edu/PtyAcquisition/pdfs/Sample-AgreementToPurchaseRealEstate.pdf

I suspect, however, that the builders' contracts are going to be much more comprehensive and complicated so make sure you get them in advance and study them carefully so you know what you are getting into and then study the actual contracts before signing them in case the builder tries to pull a fast one.

You don't want to be back here in 6 months sobbing "I trusted."

Never trust anybody who wants to sell you something.