Jessica Martinsen · Austin Real Estate
Buying new construction around Austin: the builder's contract is not the TREC contract
How builder contracts differ from resale contracts, which inspections to schedule at each phase, and how incentives tied to builder lenders really work.
The first thing to understand about a new build is that you are not signing the familiar Texas resale contract. Builders use their own contracts, drafted by their own counsel, and the differences are not cosmetic: earnest money is often larger and harder to recover, completion dates flex in the builder's favor, disputes usually route to arbitration, and some contracts allow price escalation for materials. None of this makes new construction a bad purchase - it makes the contract a document worth reading before the design-center excitement, and worth a real-estate attorney's hour if the numbers are large.
Bring your own representation, and bring it on the first visit. Builder sales offices are staffed by lovely people who work for the builder, and most builders will pay a buyer's agent - but many require the agent to be registered on your first recorded visit, not introduced later. The builder's incentive packages are usually tied to using their affiliated lender and title company; run the math with an outside lender anyway, because a headline incentive can cost more in rate than it returns in closing-cost credits, and the affiliated offer only has to beat the best competing quote you actually obtain.
Being first owner does not mean skipping inspections - it means scheduling three of them. A pre-pour inspection looks at the foundation before concrete hides it. A pre-drywall inspection is the valuable one almost nobody orders: framing, plumbing runs, electrical, and HVAC ducting are all visible for one week of the build and never again. The final inspection before closing catches the ordinary punch list. Builders sometimes discourage independent inspectors; a builder confident in its work has no reason to, and how the site manager reacts to the request is itself information.
New-home warranties in Texas typically come structured as one year on workmanship, two on major systems, and ten on structural elements, administered under state rules that require you to give the builder notice and an opportunity to repair before litigation. The eleven-month walkthrough is the deadline that matters: a month before the workmanship warranty expires, walk the house with a list and file everything in writing. Settling, nail pops, and caulk separation in the first year of a Central Texas summer are normal; the warranty exists precisely so the builder, not you, closes them out.
Two location-level checks belong in the file before you sign anything. Most new communities around Austin sit in a MUD or PID, which adds a disclosed extra tax while the district's bonds are repaid - get the current rate and remaining term, not just the reassuring word 'temporary.' And ask what is planned for the empty land you can see: the greenbelt view that sold the lot premium may be a future phase, a school site, or a road. The county's plat records and the district's service plan answer both questions with documents rather than a salesperson's recollection.
Common questions
- Can I use my own agent and lender on a new build?
- Yes. Register your agent on the first visit - many builders require it - and let the affiliated lender's incentive package compete against a real outside quote. Take whichever is genuinely cheaper over your expected hold, not whichever headline is larger.
- Do I really need inspections on a brand-new house?
- Three: pre-pour, pre-drywall, and final. Pre-drywall is the one that matters most - the structure, plumbing, and ducting are visible exactly once. Municipal code inspections are minimums, not quality control.
- What is the eleven-month walkthrough?
- A full inspection shortly before the one-year workmanship warranty expires. Everything found goes to the builder in writing while repairs are still their obligation - it is the cheapest renovation you will ever get.
- How do builder contracts differ from resale contracts?
- Builder-drafted terms commonly include larger earnest deposits, flexible completion dates, arbitration clauses, and sometimes escalation provisions. Read before signing and consider an attorney review; it is not the TREC form your agent uses on resale.
- Should I worry about MUD taxes in a new community?
- Plan for them. Most new Austin-area communities repay infrastructure bonds through an added district tax, disclosed at sale. Ask the current rate and remaining bond term and put both in your monthly math.
This page is a planning guide, not a market report. Confirm current prices, taxes, insurance and property facts against authoritative sources before acting on them.