Houston New Construction Buyer Agent Rebate: What the Builder's Commission Is Worth to You
The short answer: when you buy a new construction home in the Houston area, the builder typically pays a buyer's agent commission of around 3% of the sales price. With KAT Realty Group's full-service flat fee of $4,999, the difference between that builder-paid commission and the flat fee may be applied toward your allowable closing costs and prepaids, subject to lender approval. On a $450,000 new build in Katy or Cypress, a 3% builder commission is $13,500 — leaving a potential benefit of roughly $8,501 for the buyer. The fee is $4,999 at closing.
That is the money part, and it is real. But the reason Houston buyers need representation on a new build has less to do with the rebate than with three things that are specific to this market: municipal utility district taxes, the fact that builders owe you no seller's disclosure, and the flood question that follows from both.
Why the builder pays a buyer's agent at all
Builders budget for buyer-side commission the same way they budget for landscaping and signage. It is a marketing cost, already priced into the home. If you walk into a model home without representation, the builder does not hand you that money — it simply stays with the builder. Nothing about arriving alone lowers the price of the house.
This is the single most common misunderstanding in new construction, and it is worth being precise about it: an unrepresented buyer in Houston is not negotiating a better deal. They are declining a service the builder has already paid for.
What the rebate looks like at Houston price points
The figures below assume a 3% builder-paid commission and KAT Realty Group's $4,999 flat fee. Actual co-op amounts vary by builder and community, and lender rules govern how much of a credit can be applied at closing.
| Purchase price | 3% builder commission | KAT flat fee | Potential benefit to you |
|---|---|---|---|
| $325,000 | $9,750 | $4,999 | $4,751 |
| $400,000 | $12,000 | $4,999 | $7,001 |
| $450,000 | $13,500 | $4,999 | $8,501 |
| $550,000 | $16,500 | $4,999 | $11,501 |
| $700,000 | $21,000 | $4,999 | $16,001 |
Two honest caveats. Some builders have reduced co-op compensation to 1–2%, and a few have stopped offering it entirely — which shrinks or eliminates the rebate. And on a financed purchase, your lender decides how much credit can be applied; a credit cannot usually exceed your actual closing costs and prepaids. Anyone who quotes you a guaranteed rebate figure before reading the builder's compensation terms and talking to your lender is guessing.
Register your agent on the first visit — or none of this applies
Nearly every Houston builder requires that your agent be disclosed on your first visit to the model home or sales office, before you sign the guest register. Miss that, and most builders will refuse to pay a buyer's agent on that community for that buyer, permanently. There is no appeal, and it does not matter that you had an agent all along.
Policies differ by builder, and increasingly by community within the same builder. As of 2026:
| Builder | Buyer-agent commission |
|---|---|
| D.R. Horton, Perry Homes, David Weekley, Meritage, Westin, Chesmar, Taylor Morrison, Tri Pointe, Pulte, Drees, Toll Brothers | Typically 2–3% |
| Highland Homes | Up to 3%, paid as the lower of their rate and your representation agreement |
| KB Home | Capped at 2% since 2021 |
| Lennar | Varies by community — not offered in every Houston community |
| Sandcastle Homes | Has been testing a model with no direct buyer-agent commission |
Lennar spells out the requirement in its own published broker policy, and it is the strictest of the major builders: to qualify for any commission, Lennar must be offering one in that specific community, the buyer must identify and register the broker on the buyer’s first interaction with a Lennar employee, and the broker must accompany the buyer on the initial visit to the community, in person or virtually. Lennar also requires the purchase agreement to be executed within 60 days of that registration.
Because Lennar operates in roughly ninety Houston-area communities and publishes no list of which ones pay, the only reliable approach is to confirm the specific community before you visit it — which takes one phone call.
This is the most expensive five minutes in new construction. If you are planning to tour communities this weekend, sort out representation first — not after you find something you like.
The MUD tax question nobody asks at the model home
Most new construction around Houston sits inside a municipal utility district. A MUD is a taxing entity that funded the water, sewer and drainage infrastructure for the community, and it repays those bonds through a tax line on your bill that is separate from the county, city, school and college rates.
Harris County's adopted MUD rates for 2025 ranged from $0.00 to $1.50 per $100 of assessed value. That is not a rounding difference. A sample of the spread:
| District | 2025 rate per $100 |
|---|---|
| Cypress Klein UD | $0.1030 |
| Harris County MUD 345 | $0.1539 |
| Fort Bend Cinco MUD 2 | $0.2200 |
| Baker Road MUD | $0.2790 |
| Fry Road MUD | $0.3283 |
| Fort Bend MUD 134B | $0.9650 |
| Harris County MUD 434 | $1.0200 |
| Harris County MUD 422 | $1.4000 |
On a $450,000 home, a MUD rate of $0.25 per $100 costs about $94 a month. A rate of $0.85 costs about $319 a month. The $225 monthly gap is worth roughly $35,000 in borrowing capacity — which means two identical houses at the same sticker price can sit in completely different affordability brackets, and the model home's payment sheet will not necessarily tell you which one you are standing in.
MUD rates often decline as the district's bonds are paid down. Harris County MUD 502 fell from $1.3800 to $0.7700 between 2021 and 2025, and Crosby MUD from about $0.4525 to $0.2800. But that is a tendency, not a promise: Harris County MUD 025 adopted exactly $0.8100 in every one of those five years. A newer community in an early build-out phase generally carries a higher rate for longer, because the bonds are newer and there are fewer rooftops to spread them across.
The practical step is simple and almost nobody takes it: before you write an offer, pull the specific district for that specific lot, look at its rate history, and run the payment on the real combined rate rather than the builder's estimate.
On a new build, you get no seller's disclosure — including on flooding
Texas Property Code §5.008 requires a seller to give a buyer a written disclosure of the property's condition. Subsection (e)(10) exempts "a new residence of not more than one dwelling unit which has not previously been occupied for residential purposes."
In plain terms: the builder does not have to give you one, and will not.
That matters more in Houston than anywhere else in Texas, because the disclosure form is where a seller would otherwise have to answer whether the property is located wholly or partly in a 100-year or 500-year floodplain, a floodway, a flood pool or a reservoir; whether it has flooded before; and whether it has taken water from a reservoir release. On a resale you get those answers on a form. On a new build you get nothing, and the diligence is entirely yours.
This is the part of a Houston new-construction purchase that most deserves a second set of eyes: pulling the FEMA flood map for the lot rather than the subdivision, checking the elevation certificate, asking what the drainage plan assumes, and finding out what the flood insurance will actually cost before the option period runs out.
Builder incentives right now, and how to read them
The market is in your favor at the moment. As of September 2026, about 66% of builders nationally reported offering sales incentives and 38% reported cutting prices outright, with builder sentiment at a twelve-month low of 32. Houston-area prices were down roughly 1.9% year over year — the mildest decline among the big four Texas metros, but a decline.
Houston offers this year have included fixed rates in the 4.99% to 5.50% range through builder-affiliated lenders on selected homes, often paired with $10,000 to $25,000 in closing cost credits and design center allowances. Those packages change monthly, sometimes weekly, and they are concentrated on standing inventory rather than on homes yet to be started.
Two timing points worth knowing. Quarter-end and fiscal year-end are when builders are most motivated, because sales targets are measured on closings, not contracts — which makes the last weeks of December unusually productive if you can close quickly. And a completed spec home that has been standing for several months is a fundamentally different negotiation from a build-to-order home in a new phase. The spec home is inventory the builder is paying to carry. The to-be-built home is not.
Should you use the builder's preferred lender?
Often yes — but run the arithmetic rather than assuming either way.
Most of the largest incentives are conditioned on financing through the builder's affiliated lender, and a genuine permanent rate buydown into the 5s is worth far more over the life of the loan than a slightly better origination fee elsewhere. That is a real offer, not a trick.
What to check: whether the buydown is permanent or a temporary 2-1 structure that resets, what the rate is contingent on, whether the lender's fees are higher in a way that quietly claws back part of the credit, and what happens to the incentive if you switch lenders after signing. Get a loan estimate from the builder's lender and at least one outside lender on the same day and compare cash to close and total interest, not the headline rate.
Where new construction is happening around Houston
Activity is concentrated in the Katy and Fulshear corridor in Fort Bend and Waller counties, Cypress and Tomball in northwest Harris County, the Conroe and Montgomery stretch up I-45, Richmond and Rosenberg along US-59, and Manvel and Pearland to the south in Brazoria County. Master-planned communities including Elyson, Cross Creek Ranch, Sienna, Candela, Veranda and NorthGrove are among the larger active developments.
Each of those sits in a different county, a different school district and a different utility district, which is exactly why the combined tax rate is worth checking lot by lot rather than by reputation of the community.
Where a flat fee wins, and where it is closer
A flat fee saves the most on higher-priced homes, because the builder's commission scales with price and the fee does not. Below roughly $200,000, a percentage-based commission and a $4,999 flat fee land close together, and the advantage is modest. We would rather say that plainly than pretend the math is identical in every price band.
It is also worth saying that the rebate is not the main reason to have representation on a new build in Houston. The MUD rate, the absent disclosure, the flood question and the builder's contract terms are. The rebate is what makes getting that help cost less than doing without it.
About KAT Realty Group. KAT Realty Group is a full-service flat fee real estate service founded by Weiting Yu, a licensed Texas agent operating under Texas Ally Real Estate Group. Buyer representation is a flat $4,999 statewide, paid at closing, compared with the 2.5–3% a traditional buyer's agent charges. KAT Realty Group holds a 5.0 Google rating and serves clients in English and Mandarin (中文说明). Flat fee real estate is fully legal in Texas. KAT Realty agents operate under the same TREC licensing requirements as traditional agents.
Questions about a specific Houston community or lot? Call (512) 686-6598.
Frequently asked questions
Do I need a real estate agent to buy a new construction home in Houston?
No, but the builder has already budgeted a buyer-side commission into the price of the home. If you buy unrepresented, that money stays with the builder rather than coming back to you, and you give up representation in a transaction where you receive no seller's disclosure.
Will the builder lower the price if I come without an agent?
Generally no. The commission is a budgeted marketing cost, not a discount the builder passes along. Builders also avoid undercutting their own co-op arrangements, because doing so would discourage agents from bringing buyers.
When do I have to tell the builder I have an agent?
On your first visit to the model home or sales office, before you sign the guest register. Most Houston builders will not pay a buyer's agent who is disclosed later, and the decision is rarely reversible.
What is a MUD tax and will mine go down?
A municipal utility district tax repays the bonds that funded your community's water, sewer and drainage infrastructure. Harris County rates for 2025 ranged from $0.00 to $1.50 per $100 of value. Rates often decline as bonds are paid down, but not always — some districts have held the same rate for five consecutive years.
Does a builder have to give me a seller's disclosure in Texas?
No. Texas Property Code §5.008(e)(10) exempts a new residence that has not previously been occupied. That means you will not receive written answers to the form's flood-history and floodplain questions, and that diligence falls to you and your agent.
Do I still need a home inspection on a brand-new house?
Yes. An independent inspection is separate from the municipal inspections the builder passes, and phase inspections during construction catch items that are impossible to see once walls are closed. A pre-warranty-expiration inspection near the eleven-month mark is also worth scheduling.
How does the KAT Realty Group flat fee work on a new build?
Buyer representation is a flat $4,999, paid at closing. Where the builder's co-op commission exceeds the flat fee, the difference may be applied toward your allowable closing costs and prepaids, subject to your lender's approval. Homes above $900,000 carry an additional fee: $1,000 from $900,000 to $2 million, $2,000 from $2 million to $3 million, and $5,000 above $3 million.
Related: New construction buyer agent in Texas · Flat fee buyer representation · Flat fee realtor in the Houston metro · Houston housing market data