Building a home in Texas is an exciting journey, but it’s a bit different from other places in the U.S. With so many options for builders and communities, it can feel overwhelming. Let’s break down some essential things you should know about new construction homes in Texas, especially if Houston is on your radar. Whether you’re looking at master-planned communities, spec homes, or builder tiers, this guide has you covered.
1. Base Price + Upgrades = Your Final Cost
Most Texas production builders operate on a base price model. This means the price you see on paper is just the starting point. Add-ons like design selections, structural upgrades, and lot premiums can easily push the cost up by 10% or more.
Want to see how this plays out in real life? Check out my YouTube video where I compare base models with fully upgraded homes—it’s eye-opening!
2. Spec Homes vs. Build-to-Order
When building a new home, you’ll encounter two main options: spec homes and build-to-order homes.
- Spec Homes: These are homes the builder constructs without a buyer lined up. They’re designed with popular finishes and layouts that appeal to most buyers. The price you see is all-inclusive, which can make budgeting easier. You’ll often find better deals on spec homes, especially if the builder is trying to move inventory quickly. Another advantage is the shorter wait time—you can usually close in 30–60 days. However, the downside is limited personalization. You’re buying what’s already built, so there’s no opportunity to choose upgrades or make design changes.
- Build-to-Order Homes: These are homes you build from the ground up with the builder, starting with a base floor plan. You’ll have the freedom to pick design features, structural changes, and upgrades that fit your preferences. But this flexibility comes with a cost—both in price and time. Building a home can take anywhere from 6 to 12 months, and the final cost can be significantly higher than the base price once you factor in all the extras.
If you’re weighing these options, think about your timeline, budget, and how important customization is to you. Both approaches have their pros and cons, so it’s all about finding what works best for your situation.
3. Builder Incentives Aren’t Always a Deal
Builders love to dangle incentives, like closing cost assistance or interest rate buy-downs, especially in slower markets. The catch? These perks are usually tied to using their in-house lender and title company. Plus, the savings might already be baked into the price.
Curious about whether incentives are worth it? Let’s chat! Or join my Facebook group for insider tips.
4. Builders Control Inventory
Ever notice how a neighborhood seems to sell out overnight? That’s no accident. Builders manipulate inventory by only releasing a limited number of lots and homes at a time to create urgency. Don’t let the pressure get to you—there’s often more available than they show.
5. Earnest Money and Deposits
Unlike buying an existing home, building new often requires multiple deposits. This includes earnest money (typically $3,000–$10,000) and upfront costs for design and structural upgrades, which can be 25-50% of your total upgrade budget. Make sure you’re ready with extra cash on hand.
6. Lot Premiums Can Add Up
Corner lots, oversized lots, or those with no back neighbors can come with steep premiums—sometimes as high as $100,000. If you’re debating whether that extra space is worth it, I’ve got a video all about Lot Selection Tips.
7. MUD Taxes: Know What You’re Paying
In Houston, many new communities fall under a Municipal Utility District (MUD), which funds roads, water, and utilities. These taxes can be high initially and vary by community. Be sure to factor this into your budget.
8. Builder Warranties Vary
Warranties are one of the best perks of new construction, but not all are created equal. Some builders offer comprehensive coverage, while others outsource to third parties. Research the warranty before signing on the dotted line—it could save you headaches later.
9. Builder Contracts Favor the Builder
Texas builders often use their own contracts, which aren’t the same as traditional real estate agreements. These contracts are typically one-sided, so it’s a good idea to have an attorney review them before you sign.
10. Tiers of Builders
Houston is home to a wide variety of builders, ranging from entry-level to luxury. Here’s a quick breakdown:
- Entry-Level: Budget-friendly homes with fewer customization options.
- Mid-Tier: A mix of affordability and upgrades.
- Luxury: High-end materials, semi-custom options, and premium lots.
Want to learn which builders align with your budget and style? Explore my Houston Home Builder Comparison.
11. Master-Planned Communities Are Everywhere
Texas leads the nation in master-planned communities, especially in the Houston area. These communities often have multiple builders, so it’s essential to research both the developer and the builder.
For a closer look, check out my video series on Houston’s Best Master-Planned Communities.
12. Why You Need a Buyer’s Agent
If you’re new to the process or moving from out of state, having a buyer’s agent is invaluable. We help you navigate builders, compare options, research areas and future development and advocate for your best interests—typically, at no extra cost to you as most builders cover the cost for your have represenation.
Ready to Build Your Dream Home?
I’d love to help you navigate the process, whether you’re still researching or ready to commit. Schedule a consultation through my calendar or join my Facebook group for ongoing tips and advice.
Pro Tip: If you found this helpful, subscribe to my YouTube channel for more videos about Houston living and home building tips. Let’s make your home-buying journey as smooth as possible!
