Hidden Costs of Building a Home in Texas: What Buyers Need to Know

Posted by Kim Reding on January 12, 2026

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Building a new home in Texas — especially in high-demand areas like Argyle, Northlake, Denton, Flower Mound, and Prosper — is exciting. But many buyers are surprised when the final number ends up higher than the advertised “base price.”

As a Broker Associate representing dozens of new-construction buyers across North Texas, I help clients navigate the true cost of building so they’re protected from expensive surprises.

Here’s everything buyers need to know before signing a contract with a Texas builder.

💰 1. Lot Premiums

This is one of the biggest hidden costs.

While the builder may start a model at “$550,000,” that price usually does NOT include the lot.

Lot premiums vary based on:

Size
Greenbelt views
Cul-de-sac location
Corner lots
Oversized or irregular shapes
Proximity to amenities

Typical Lot Premiums in North Texas (Accurate & Current)

Standard lot: $0 – $15,000
Oversized lot: $15,000 – $35,000
Greenbelt or premium-facing: $25,000 – $75,000+
Half-acre or acre lots (luxury): $100,000 – $350,000+

Why This Matters

Lot selection dramatically affects resale value — something your agent can help evaluate.

🛠 2. Structural Upgrade Costs

These are upgrades you must decide on before the home is framed. Examples include:

Enlarged patios
Media room additions
Bay windows
Fireplace additions
3-car garages
Ceiling height increases
Sliding glass doors
Luxury primary bath options

These upgrades can add $10,000 to $80,000+ depending on builder and community.

🛋 3. Design Center Upgrades

This is where buyers get hit the hardest.

Typical Costs

Conservative upgrade package: $8,000 – $20,000
Mid-range upgrades: $25,000 – $45,000
High-end finishes: $50,000 – $120,000+

Upgrades may also vary dramatically between builders. Highland Homes, for example, includes more standard features than many competitors—while some builders price low at base and make it up in upgrades.

🧱 4. Exterior Elevation Fees

The front exterior style (brick, stone, siding combo) can add:

$5,000 – $25,000+ depending on the builder.

Buyers don’t always realize that the model home elevation is often a premium choice.

🪜 5. Pre-Closing Costs You Might Not Expect

✔ Utility Connection Fees

Many Texas municipalities charge:

Water tap fees
Sewer tap fees
Utility setup costs
Impact fees for new developments

These can range from $1,500 to $6,000 depending on the city.

✔ Surveys

Some builders include it — others require you to pay separately.

✔ Title Policy

Varies by builder. Many large Texas builders no longer cover this cost unless you use their lender.

Title policy cost depends on price, but on a $600,000 home it’s about $3,300.

📦 6. Post-Move-In Costs Most Buyers Forget

This is where Texas new-construction owners get surprised the most.

❗ Landscaping / Sod Add-Ons

Some builders only landscape the front yard.
Backyard sod can cost $1,500 – $4,500 depending on size.

❗ Window Treatments

New construction = zero blinds.
Average cost for blinds/shades: $2,000 – $7,000.

❗ Backyard Features

Patio extensions
Pergolas
Concrete slabs
Decking
Outdoor kitchens

These often add $5,000 – $30,000+ after closing.

❗ Gutters

Some builders include partial gutters only.

Full gutter installation can range $1,000 – $3,500 depending on home size.

❗ Fencing

If you’re early in the phase, fences may not yet be installed.

Average North Texas fencing cost: $4,000 – $8,000.

❗ Full sprinkler coverage

Some builders only sprinkle the front yard unless upgraded.

🧾 7. HOA Fees, PID Fees & MUD Taxes

Many Texas master-planned communities — especially in Argyle, Northlake, and Prosper — include special taxing districts.

PID (Public Improvement District) Fees

Common in master-planned communities.
Ranges from $1,500 – $3,500+ annually.

MUD (Municipal Utility District) Taxes

Some communities have no MUD; others add 0.3% – 0.8% to the tax rate.

HOA Fees

Ranges from:

Standard: $600 – $1,000/year
Active lifestyle communities: $1,200 – $2,000/year

These fees significantly impact affordability and long-term resale value.

🏗 8. Builder Incentives Aren’t Always What They Seem

Builders often advertise:

“$20,000 toward closing costs”
“Lower interest rates”
“Free upgrades with preferred lender”

But…

Using the builder’s lender may lock you into a higher base rate or require specific loan structures.

A knowledgeable Realtor will:
✔ Compare lender incentives
✔ Shop rates externally
✔ Negotiate additional credits
✔ Calculate the true cost to you

Builder reps represent the builder, not you — which is why representation is essential.

🔍 9. Construction Delays & Cost of Rate Lock Extensions

If the home takes longer than expected to build (common in Texas):

Your rate lock may expire
You may pay extension fees
Your payment may change

Rate lock extensions can cost $1,000 – $4,000+.

🛡 10. Why You MUST Use a Realtor When Building

A builder rep’s job is to protect the builder.
My job is to protect YOU.

As your agent, I help with:

Identifying cost traps
Negotiating incentives
Reviewing contracts
Ensuring fair pricing
Monitoring construction
Advising on upgrades that increase resale value
Avoiding upgrades that waste money
Navigating inspections and walkthroughs
Preventing costly mistakes

Best part?
The builder pays my commission — not you.

You get full representation at no cost.

🧠 Expert Insight from Kim Reding

Broker Associate | Magnolia Realty

“The biggest mistakes I see in new construction come from buyers not understanding what’s included — and what isn’t. With an experienced agent by your side, you’ll avoid thousands of dollars in unnecessary costs and build a home with long-term value.”

🎯 Final Thoughts

Building a home in Texas is an incredible opportunity — but understanding the hidden costs is essential to protecting your budget and your investment.

With a local new-construction expert guiding you, you can build confidently, save money, and make smart decisions that maximize long-term value.

👉 Thinking about building a home in North Texas? Schedule your new construction consultation today.
📧 kimreding@magnoliarealty.com
🌐 www.kimreding.com