If you're buying new construction in Frisco, Prosper, Celina, McKinney, Sherman, Little Elm, Aubrey, or anywhere in North Texas, you’ve probably seen ads like:

✔️ “$20,000 buyer incentive!”

✔️ “4.99% interest rate!”

✔️ “$15,000 toward closing costs!”

✔️ “Free design center upgrades!”

But here’s what most buyers don’t realize:

Builder incentives are marketing tools—and they’re negotiable.

Builders structure incentives strategically, and understanding how they work can save you tens of thousands of dollars.

Let me break down every type of builder incentive and how I negotiate them for clients.

1. Builder Mortgage Rate Buydowns (The Most Valuable Incentive)

A rate buydown is when the builder uses a credit to lower your interest rate.

Two types of buydowns:

A) Permanent Buydown

Builder pays discount points to lower your rate for the entire loan.

Example:

• Market rate: 6.75%

• Builder rate: 5.25%

• Savings: Massive

This is the #1 best incentive in most cases.

B) Temporary Buydown (2-1 Buydown or 1-0 Buydown)

Builder lowers your rate temporarily:

• 2-1 buydown: 2% lower the first year, 1% lower the second, normal rate afterward

• 1-0 buydown: 1% lower the first year

This saves money upfront but not long-term.

Permanent buydowns are almost always better than temporary ones.

2. Builder Closing Cost Credits

Builders frequently offer:

✔️ $5,000–$25,000 toward closing costs

✔️ Payment of title policy (sometimes)

✔️ HOA contributions

✔️ Prepaid taxes/insurance credits

These help reduce your cash-to-close.

BUT:

They often require you to use the builder’s preferred lender and preferred title company.

I help you compare incentives to make sure they’re truly beneficial.

3. Design Center Credits (Upgrades)

Many builders offer design credits such as:

✔️ $5,000–$20,000 for upgrades

✔️ Free flooring improvements

✔️ Appliance packages

✔️ Cabinet upgrades

✔️ Lighting packages

✔️ Smart home enhancements

These are great—but you must spend the credit at the builder’s design center, and some upgrades have huge markups.

I guide you on which upgrades retain resale value (and which don’t).

4. Lot Premium Discounts

Builders sometimes discount:

✔️ Premium lots

✔️ Cul-de-sac locations

✔️ Greenbelt lots

✔️ Oversized lots

✔️ Corner lots

These can be worth $10k–$75k+ depending on the community.

Timing matters—builders cut lot prices late in the fiscal year or if they need inventory moved.

5. Inventory Home (Spec Home) Discounts

Builders often offer their deepest discounts on inventory homes, because:

✔️ They’re already built

✔️ Carrying costs hurt the builder

✔️ They want them off the books

Discounts can be:

✔️ $20k–$150k off base price

✔️ Additional closing cost credits

✔️ Special financing incentives

Inventory homes are where I negotiate the biggest wins.

6. Free Appliances or Upgrades

Builders sometimes include:

✔️ Refrigerator

✔️ Washer/dryer

✔️ Blinds

✔️ Garage door openers

✔️ Smart home packages

These aren’t as valuable as rate buydowns or credits, but they help.

7. Builder Incentives Are Not "Free" — They Are Structured Into Margins

This is critical:

Builder incentives are priced into their business model.

The builder recoups these costs through:

✔️ Preferred lender agreements

✔️ Title company partnerships

✔️ Upgrade markups

✔️ Base price increases

✔️ Volume pricing on materials

The key is making sure you come out ahead, not the builder.

That’s where I protect you.

8. The Best Builder Incentive Depends on Your Financial Goals

If you want the lowest monthly payment → Permanent rate buydown

If you want the lowest cash-to-close → Closing credits

If you want the prettiest house → Design credits

If you want the best resale value → Lot discounts + long-term rate buydown

If you want the biggest discount → Inventory home + end-of-quarter timing

I customize the strategy around your goals.

9. How to Compare Builder Incentives vs Outside Lenders

Sometimes the builder incentive looks huge—but isn’t.

For example:

✔️ Builder rate: 5.5% with $10k credit

vs.

✔️ Outside lender rate: 5.25% with no credit

The outside lender may still be cheaper overall.

I run a side-by-side comparison to calculate:

✔️ Total interest over 5 years

✔️ Total interest over 10 years

✔️ Total payment difference

✔️ Cash-to-close difference

Then you can confidently choose the best deal.

10. Builder Incentives Change Monthly (Sometimes Weekly)

Builders adjust incentives based on:

✔️ Inventory levels

✔️ Interest rate environment

✔️ Quarter-end deadlines

✔️ Fiscal year-end deadlines

✔️ Competition among nearby communities

I track incentives across dozens of North Texas builders so you always know the best deals.

11. My Role When Negotiating Builder Incentives

When you buy new construction with me, I:

✔️ Negotiate rate buydowns

✔️ Secure closing cost credits

✔️ Maximize design credits

✔️ Confirm lender compares are accurate

✔️ Negotiate on inventory homes

✔️ Check if incentives stack

✔️ Verify incentives don't hide price increases

✔️ Ensure appraisal risk is considered

✔️ Protect your deposit

Builders always offer the best deals to the most informed buyers—that’s exactly what I help you be.

12. My Rule of Thumb

The best builder incentive is the one that saves you the most money long-term—not the one that sounds the flashiest.

Bottom Line: Builder Incentives Are Powerful When Negotiated Correctly

When I represent you, I make sure:

✔️ You understand every incentive

✔️ Incentives match your financial goals

✔️ Nothing is hidden in the fine print

✔️ The lender comparison is accurate

✔️ You don’t leave money on the table

✔️ You get the best possible deal

New construction can be an incredible value—but only when negotiated with strategy.

Want a Realtor Who Knows Every Builder Incentive in North Texas?

If you're buying a new home, I’d love to help you maximize incentives and secure the best terms possible.

CLICK HERE to Connect With Me