Last reviewed: August 12, 2026. This information is educational only and does not constitute legal or financial advice. Texas real estate practices vary by city; consult licensed Texas attorneys and professionals before proceeding.
Texas new construction involves different processes than many other states, with distinct roles for builders and sales agents, specific contract forms, inspection protocols and property-tax structures that vary by location. Understanding whether your builder uses a Texas Real Estate Commission (TREC) contract or a builder-drafted agreement, how property taxes work in different jurisdictions, and what due diligence is required for flood zones, HOAs and MUD districts helps buyers make informed decisions across the state’s diverse markets.
Builder and sales-agent roles
In many Texas new-construction transactions, the sales agent represents the builder, not the buyer. This differs from typical resale transactions where agents often have fiduciary duties to buyers. Understand who your agent represents and what disclosures are required. Builders may offer incentives to use their preferred lender, but compare those offers with independent financing to ensure the terms are competitive.
Texas law requires specific disclosures about agency relationships. Review these documents carefully. The TREC consumer information explains buyer representation, seller representation and intermediaries. Consider hiring your own buyer’s agent to represent your interests, especially when purchasing from production builders.
TREC contracts vs builder contracts
TREC-adopted forms are used by license holders where required, but builders or attorneys may use builder-drafted contracts. Texas offers promulgated contract forms including New Home Contract (Incomplete Construction) and New Home Contract (Completed Construction). Some builders use these TREC forms, while others draft their own contracts.
TREC contracts include certain consumer protections developed by the commission; builder contracts may favour the builder. The choice of contract form depends on the builder and whether a licensed real estate broker is involved. Have a qualified real-estate attorney review whichever contract you are asked to sign, paying attention to completion timelines, extension provisions, remedy periods and dispute-resolution clauses.
Property taxes and assessment timing
Property taxes in Texas are locally assessed by counties and districts, not at the state level. The Texas Comptroller’s office provides information about how property taxes work and local appraisal districts determine assessed values. New construction may be assessed based on partial completion during the first year and full value in subsequent years, with appraisal dates typically set at January 1.
Understand how your specific county appraisal district handles new construction and whether your projected taxes reflect the full assessed value once the home is complete. Tax rates vary significantly between cities, school districts and other jurisdictions. Research the actual tax rate for the specific property, not just a county average, as rates can vary within counties by school district and other taxing entities.
Insurance, flood zones and windstorm requirements
Texas properties may require different insurance depending on location. Coastal areas may need windstorm coverage through the Texas Windstorm Insurance Association. Properties in FEMA flood zones may require flood insurance, especially if the purchase involves a federally backed mortgage.
Review FEMA flood maps before purchasing to understand the property’s flood zone designation. Insurance costs can vary substantially based on exact location, construction type and elevation. Obtain insurance quotes early in the process rather than assuming coverage will be available at standard rates. Some properties may require additional endorsements or separate policies for wind, flood or hail coverage.
HOAs, MUDs and PID districts
Many Texas new developments involve special districts or associations, but these obligations depend on the exact property and governing documents. Municipal Utility Districts (MUDs) issue bonds to finance infrastructure; properties pay taxes to repay those bonds. Public Improvement Districts (PIDs) and Tax Increment Reinvestment Zones (TIRZs) also impose additional levies in some communities.
Homeowners Associations (HOAs) charge mandatory fees in some developments but not all. Understand all mandatory fees and taxes before purchasing, as these affect your monthly budget and total cost of ownership. Read the MUD bond documents, PID assessments and HOA covenants to understand the obligations and whether they can increase. Not every community has MUD, PID or HOA obligations—verify the specific property’s status.
Inspections and due diligence
Even new construction should be inspected by qualified professionals. The TREC consumer information includes guidance on inspections for new construction and licensed inspector information. Private inspectors may identify issues that municipal or third-party inspectors missed.
Review inspection contingency periods in your contract. New construction may have warranty periods, but identifying issues before closing is preferable to pursuing warranty claims later. TREC provides consumer notices about inspections and property condition disclosures. Understand what inspections are available, what warranties the builder offers, and how defects will be addressed.
City-specific variation
Texas markets differ significantly. Houston’s lack of zoning creates different development patterns than Dallas or Austin. Austin’s development regulations include specific affordability and design requirements. San Antonio has different historic preservation and tree ordinances. Fort Worth, El Paso and other cities each have local requirements that affect new construction.
Research the specific regulations applicable to your city and understand how they affect the property you are purchasing. Check municipal building department websites for permit requirements and inspection schedules. Some cities have additional disclosure requirements or development standards that affect new construction.
Not legal or financial advice
This article explains general Texas new-construction purchasing mechanics. It does not constitute legal, tax or financial advice. Texas real estate transactions involve complex documents and local requirements; work with qualified Texas attorneys and real estate professionals. Verify all information through official sources including TREC, the Texas Comptroller and FEMA.
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