Buying & building a new home, answered

Three things separate them. The first is who controls the land. The second is whether the plan comes from a fixed library or is drawn for you. The third is whether the price is fixed in the contract or moves with the cost of the work. A production builder owns the land, builds from a plan library, and sells at a set price. A custom builder builds your design, usually on your lot, at a cost that moves with the choices you make.

A spec home is one the builder started before anyone was under contract. Because the structure and most selections are already set, what you can still change is limited, but the trade is a known product and often a quicker, better-incentivized close.

A quick move-in is an inventory home already under construction or finished. The selections are already made. You give up choosing finishes and get a known home and a firm closing date in return.

Base price is the advertised plan price before options, upgrades and the homesite. New-home pricing is always plan plus homesite, and buyers rarely close at base. Treat the base number as a starting point, not the price you will pay.

A lot premium is an added charge for a more desirable homesite, such as a greenbelt, corner, cul-de-sac or water lot. The builder sets it per homesite, not by the plan, so the same house can carry very different premiums across a community.

A master-planned community is a large developed community with shared amenities, several builders and homesites released in phases. In Central Texas the usual pattern is to pick the community first for its location and amenities, then the builder second.

A MUD, or Municipal Utility District, finances a community's water and sewer infrastructure and is repaid as an extra line on your property tax bill. The rate is set per district and changes over time, so ask for the district's own disclosure rather than relying on any quoted figure.

A PID, or Public Improvement District, is an assessment a city or county levies on the lot to fund a development's infrastructure. It differs from a MUD tax and can sometimes be paid off in a lump sum, so ask how the assessment on a given homesite is structured.

A MUD is a taxing district with its own rate on the tax bill repaying water and sewer bonds; a PID is an assessment a city or county places on the lot to fund infrastructure that can often be paid off in a lump sum. A single home can carry both, so check the disclosures for each rather than assuming one figure covers it.

Build-on-your-lot is a production or semi-custom builder placing one of its stock plans on land you already own. Site costs such as clearing, utilities, septic and the driveway are yours and are not in the plan price, so budget them separately.

The design center is the showroom where you select finishes and upgrades. It is a managed profit center for the builder, and the pricing there is not the same as retail, so decide your upgrade budget before your first appointment.

A 1-2-10 warranty means one year of workmanship coverage, two years on systems, and ten years structural. Each tier may be backed by the builder or by a third party, so read the warranty document to see who stands behind each one.

It depends on the pieces that differ, not the sticker price. New construction can bring incentives and rate buydowns. Against that sit the lot premium, upgrades, any MUD or PID assessment, and the first-year tax reset. Weigh those for the specific home rather than comparing prices head to head.

A HERS index score rates energy efficiency, where lower is better and zero is net zero. It predicts how the home will perform on the utility bill, and a builder who publishes scores is signalling confidence in the envelope and systems.

An impact fee is a one-time charge a city or county levies on a new home to help pay for the roads, water, sewer and parks that new growth requires, and it is typically collected at permitting and passed through to the buyer in the price.

A finished lot is a homesite that already has its streets, utilities and drainage installed and is ready to build on, as opposed to raw or 'paper' land still awaiting development.

A modular home is built in factory sections to the same local building code as a site-built house and set on a permanent foundation, while a manufactured home is built entirely in a factory to the federal HUD Code on a permanent steel chassis.

The HUD Code is the federal construction and safety standard (24 CFR Part 3280) that governs manufactured homes built entirely in a factory, and it preempts local building codes for that housing type.

A SIP home is built from structural insulated panels of rigid foam bonded between two structural skins, and an ICF home is built from hollow foam blocks filled with reinforced concrete, both of which produce a tighter, better-insulated shell than conventional stick framing.

The International Energy Conservation Code, or IECC, is the model energy code adopted by reference across most jurisdictions that sets minimum requirements for insulation, air-sealing and equipment efficiency in a new home.

The included-features list is specific to each builder and community. Buyers are most often surprised by flooring extent, fencing, landscaping, blinds, appliances and the garage-door opener. Ask for the written included-features sheet and read it against the model home.

Structural options are priced before framing, finishes are chosen at the design center, and the model home you liked is fully upgraded. Set an upgrade budget before your first design appointment so the selections don't set it for you.

Sort every upgrade by whether it is structural or can be done later. Anything inside the walls or the slab, such as layout, rough-ins and wiring, is builder-only and worth paying for now. Most cosmetic finishes are cheaper to do after closing.

No, but the largest incentives usually require the builder's lender. Compare the incentive value against the rate and fees as a total cost, not rate against rate. Get both offers in writing on the same loan terms.

Typically you lose the rate buydown and closing-cost credits, but the amount is specific to the community and even the week. Ask for the builder-lender offer and an outside offer in writing and compare them on identical loan terms.

A rate buydown is a builder-paid mortgage subsidy. It can be temporary, like a 2-1 buydown, or permanent, through a forward commitment. It comes from the same budget as a price cut, which is why builders often prefer to move on the rate rather than the headline price.

It depends entirely on the lock product. Float-down options, extended locks and lock-and-shop each behave differently if rates fall before closing, so get the lock terms in writing and know which mechanism you hold.

Builders protect the headline price to hold comparable sales, and they move on incentives, upgrades and closing costs instead. Ask where the flexibility is rather than whether the price is negotiable. It is almost always in those three places.

Construction runs in phases: permitting, foundation, framing, dry-in, trades, finishes and inspections. Cycle time depends on permit queues, trade availability, weather and long-lead items. Ask the builder for a written schedule specific to that community.

Roughly in order, they are permit and inspection queues, trade scheduling, long-lead materials, and change orders made after framing. Change orders are the one you control, so lock your selections early.

No, but the on-site sales consultant works for the builder, not for you. A buyer's agent usually must be registered at your first visit, and since 2024 the written buyer agreement governs how that agent is paid, so sort representation out before you tour.

Registration policies vary, and many builders require your agent to be with you on your first visit. If you want your own agent involved, ask the community's policy before you tour.

Yes. Municipal inspections check code compliance, not workmanship, so a private inspection catches what they don't. Get both a pre-drywall inspection, while framing and systems are visible, and a pre-closing inspection.

The pre-drywall walkthrough is your look inside the walls before insulation and drywall close them. Check blocking, duct runs, plumbing penetrations, window flashing and electrical box locations. These are expensive or impossible to fix once covered.

The blue tape walkthrough is the final walk before closing, where you flag defects for the punch list. Items left off the list at closing are much harder to get fixed afterward, so be thorough.

Builder deposits vary by builder, plan and whether you are ordering options. In general new-construction deposits run larger than resale and are often partly non-refundable, but the number and terms live in the specific contract.

Usually only under the contract's stated contingencies, and money already spent on ordered options is normally forfeited. Read the deposit and cancellation terms in the contract before you sign.

Read the clauses that legitimately move the number: change orders, options ordered after signing, and any escalation or cost-adjustment clause. Builder contracts vary widely here, so check those specific provisions rather than assuming the price is fixed.

The first bill often reflects a land-only or partial valuation, and the jump comes when the finished home is assessed. Escrow shortages tend to follow that reset, so expect the second-year bill to look different. Check the county appraisal district for the specifics.

Add the full tax rate, including the MUD or PID line, to the HOA dues to get a monthly all-in cost for each community, then compare those. Two otherwise identical homes in neighboring communities can differ materially once the district charges are in, so compare the all-in figure, not the base rate.

A MUD's rate generally declines as the district pays down its bonds, and the district can eventually be annexed or dissolved, but the schedule is specific to each district. Point to the district's own disclosure for where it stands rather than assuming a timeline.

An HOA fee is a private association's dues for amenities and rules; a MUD tax is a taxing district repaying infrastructure bonds through your tax bill. They are separate charges, and a home can carry both.

You can take structural options, but only from the builder's approved list and only before a cutoff date. A true layout change means moving to a semi-custom or custom builder.

The ETJ is the unincorporated ring where a Texas city still controls subdivision platting but not always building permits, and recent state law has narrowed that authority. The county, the city and any emergency services district can each have a claim, so the permit answer depends on the address. An ESD levy is a separate tax line that buyers often miss.

A construction-to-permanent, or one-time-close, loan funds the build in draws and then converts to a standard mortgage at completion with a single closing and one set of closing costs.

A one-time-close loan converts to a permanent mortgage automatically at completion, while a two-time-close arrangement uses a short-term construction loan that must be separately refinanced into a mortgage, meaning a second closing and a second set of costs.

A home is dried-in once the roof, exterior sheathing, windows and house wrap are in place so the interior is protected from weather, which is the milestone that lets interior trades begin.

The rough-in is the stage when plumbing, electrical and HVAC lines are run through the open framing before insulation and drywall close the walls, and it is inspected before it is covered.

Retainage is a portion of each progress payment, commonly around ten percent, that the owner or lender withholds until the work is complete to protect against unfinished or defective work.

A lien waiver is a signed release in which a contractor or supplier gives up the right to file a mechanic's lien for work already paid for, and lenders and title companies collect them at each draw so that paid-for work cannot later become a claim against the home.

A percolation, or 'perc', test measures how quickly soil drains, and it is required to design and size an on-site septic system on land that has no connection to a public sewer.

Value engineering is the process of adjusting materials, methods or scope to bring a design back to a target budget without giving up the home's essential function.

The Section 45L New Energy Efficient Home Credit is a federal tax credit paid to the builder, worth $2,500 for a home certified to ENERGY STAR and $5,000 for one certified to DOE Zero Energy Ready, which is one reason builders pursue those certifications.

A Manual J is the ACCA-standard calculation that sizes a home's heating and cooling equipment to the actual heat gain and loss of its envelope rather than a rule of thumb, so the HVAC system is neither oversized nor undersized.

Standing inventory is a completed, unsold spec home a builder is already carrying, and because the builder is paying to hold it, standing inventory usually carries the deepest incentives and the quickest closing.

Acting as your own general contractor, known as owner-building, means the owner takes on scheduling, hiring and coordinating the trades, pulling permits and carrying the liability and financing risk a builder would normally hold, and many construction lenders restrict or decline to finance it.

An easement is a recorded right for a utility, drainage or access use across part of a lot, and the owner generally may not build over it.

A setback is the minimum distance a structure must sit from a property line under zoning and deed restrictions, and it limits where a home, garage or addition can be placed on a lot.

Ask for the included-features sheet, the options cutoff dates, the written schedule, the warranty document and who backs it, the incentive terms in writing, and what the surrounding land is zoned for. Those items shape what you get and what you pay.

Production builders use a standard form and change little of it, but delivery dates, contingencies and incentive language can move. Buyers have limited leverage, so spend it on those terms rather than the price.

Yes. The builder's form is written for the builder. A review should focus on the arbitration clause, delay remedies, deposit-forfeiture terms and warranty limits, the provisions most likely to matter if something goes wrong.

Most builder contracts contain broad delay allowances and few buyer remedies. Read exactly what the contract says about delay, and weigh the practical exposure on your rate lock, rather than assuming a specific outcome.

Only through the contract's own contingencies, and typically at the cost of your deposit and any ordered options. The executed contract governs, so read its cancellation terms before you rely on getting out.

Lock-and-shop is an extended rate lock taken before the home is finished, sometimes with a float-down option. The trade is certainty against a fee and a possibly higher starting rate, so weigh how long your build is against how much the certainty is worth.

Check public permit records, warranty complaints and the local building department, walk a completed phase, talk to owners who have lived there a year, and read the warranty document itself. Those sources show a builder's record better than a brochure does.

The model comes fully upgraded and sometimes furnished, but it has been walked through for years and may involve a leaseback where the builder rents it back for a time. Inspect it like any used home and weigh the upgrades against the wear.

An inventory home carries the deepest incentives and a known closing date. A to-be-built home lets you choose selections and a lot, but your rate is exposed to market moves while it is built.

Ask which selections are structural and have already passed their cutoff, what the allowance covers, whether pricing is installed or material-only, and what can be safely left until after closing. That keeps the appointment from setting your budget for you.

Check the recorded plat, the community's phasing map, and the city or county land-use and zoning records to see what can be built behind your lot. The sales office's verbal answer is not a source. The recorded documents are.

Builders typically raise prices as each release sells, which favors buying early. Early phases, though, live with construction traffic and unfinished amenities. Weigh the likely price path against living through the build-out.

Most new-home building has moved out of the city core to Georgetown, Liberty Hill, Leander, Kyle, Buda, Manor, Pflugerville and Bastrop. The supply of finished lots in the outer counties decides where new homes get built.

Some communities do. Whisper Valley's geothermal loop is the best-known example, and Austin Energy Green Building gives builders in that utility's service area a local efficiency rating. It varies by community, so ask rather than assume it comes standard.

Your protection depends on whether your deposit is escrowed or held by the builder, the lender's position, and whether the warranty is builder-backed or third-party. An unescrowed deposit is the biggest exposure, so confirm how yours is held before you sign.

A temporary certificate of occupancy is a conditional municipal sign-off that lets a buyer move in while a few minor items are still being finished, short of the full certificate of occupancy.

Third-party structural coverage normally transfers to a later owner, while a builder's own workmanship warranty often does not. The distinction is spelled out in the warranty document, so check what transfers before you count on it at resale.

The homestead exemption attaches to the owner occupying the home, and the county appraisal district sets the filing window and any late-filing allowance. The cap on assessed increases only starts once the exemption is in place, so file with your appraisal district as soon as you qualify.

The warranty document sets the process, whether that is a portal, written notice, or a third-party administrator. Written, dated notice protects the claim, so follow the document's channel exactly and keep a record.

Workmanship is covered first, mechanical systems next, and structural last. Structural coverage is usually the narrowest in practice because it requires an actual load-bearing failure, so read what each tier covers.

Some drywall cracking and door sticking is normal settlement, and Central Texas expansive clay makes seasonal slab movement worse. Much of it falls under first-year workmanship, so the one-year mark is the moment to submit your full list.

Texas gives the builder a chance to fix the problem first. Under the Residential Construction Liability Act (Chapter 27 of the Property Code), you give written notice and an opportunity to repair before suing, and the contract's arbitration clause usually governs the dispute. Send that written notice and keep a record.

You can protest through the county appraisal district, on its deadline. Your homestead exemption and the assessment cap both affect the outcome. File on time through the district. We don't predict results or values here.

An 11-month warranty inspection is a walkthrough near the end of the first-year workmanship warranty when the owner compiles a final list of items for the builder to correct while that coverage still applies.