1
- 1-2-10 warranty
- The standard new-home warranty: 1 year workmanship, 2 years systems (mechanical, electrical, plumbing), 10 years structural.
A
- Absorption / sales pace
- Net home sales per community per month - the metric that sets a builder's pricing and homesite-release timing.
- ADU
- Accessory Dwelling Unit - a secondary home on a lot; rules and by-right allowances vary sharply by city.
- Allowance
- A dollar budget set for a category (flooring, appliances) in a custom contract; overages are billed to the buyer.
B
- Backlog
- Signed but not-yet-closed homes; a leading indicator of a builder's coming revenue.
- Base price
- The advertised starting price of a plan, before options, upgrades and lot premium - almost never what a buyer actually pays.
- Blower-door test
- A measured air-tightness test required by modern energy codes and by ENERGY STAR certification.
- Blue-tape / orientation walkthrough
- The final pre-closing walk, where the buyer flags defects with tape for the punch list.
- Build-on-your-lot (BYOL)
- A production or semi-custom builder erecting one of its stock plans on land the buyer already owns.
- Build-to-rent (BTR)
- Purpose-built single-family rental communities - a fast-growing slice of new construction with its own builder brands.
- Builder incentive
- Concessions used to close a deal - rate buydowns, closing-cost credits, free upgrades - usually tied to using the in-house lender.
- Building envelope
- The insulated, air-sealed shell that governs comfort and energy use.
C
- Certificate of Occupancy (CO)
- The municipal sign-off that a home is legally habitable, issued after final inspections pass.
- Change order
- A written, priced modification to the contracted scope after the contract is signed.
- Cost per square foot
- The headline metric buyers compare; varies widely by finish, plan efficiency and region, and excludes land and lot prep.
- Cost-plus contract
- Custom-build pricing: the actual cost of the work plus a builder fee or percentage - transparent but open-ended.
- Custom builder
- Builds a one-off home to the buyer's own design, usually on the buyer's lot and typically on a cost-plus contract.
- Cycle time
- Days from foundation start to completion - a core efficiency metric volume builders manage relentlessly.
D
- Design center / design studio
- The showroom where buyers choose finishes and add upgrades; a profit center production builders manage carefully.
- Draw schedule
- How a construction loan releases funds to the builder as milestones (foundation, framing, dry-in, finish) are completed.
E
- Earnest money / builder deposit
- The buyer's up-front deposit; on new construction it is often larger and partly non-refundable.
- Elevation
- The exterior style (A/B/C) offered for a single floor plan; it changes the facade, not the interior layout.
- ENERGY STAR / DOE Zero Energy Ready
- Federal performance certifications many builders now market as proof of an efficient, tight, well-built home.
- ETJ (extraterritorial jurisdiction)
- The unincorporated ring outside a Texas city's limits where the city still controls subdivision platting. Much of the Austin metro's new-home volume is built in an ETJ or inside a suburban city rather than in Austin proper, so which rules apply - and which utility, school district, MUD or PID a home sits in - is a per-community question, never a metro-wide one.
- Even-flow production
- Starting a steady number of homes per period to smooth trades and purchasing, instead of building in bursts.
F
- Fixed-price / lump-sum contract
- A single contracted price for a defined scope; the production-builder norm.
- Floor plan
- The interior layout sold under a model name, usually offered in several square-footage and elevation variants.
H
- HERS Index
- Home Energy Rating System score - lower is more efficient, with 0 being a net-zero home.
- HOA
- The homeowners association governing a community, its dues and its rules.
- Homesite / lot
- The individual parcel. New-home pricing is always plan + homesite, never a single number.
I
- Impervious cover limit
- The share of a lot that may be covered by roof, driveway and paving. Austin caps it by zoning district and tightens it sharply over the Barton Springs and Edwards Aquifer recharge and contributing zones, constraining footprint, driveway and ADU plans on infill and western lots long before a plan is drawn. Percentages vary by district and watershed - read the Land Development Code for the site, never quote a single number.
- Included features
- Finishes bundled into base price. Lennar's 'Everything's Included' and KB Home's 'Built-to-Order' are the two opposing industry philosophies.
L
- Land-light / lot-option model
- Controlling homesites through option contracts instead of owning the land; pioneered by NVR and now industry-wide.
- Lot premium
- An added charge for a more desirable homesite - greenbelt, corner, cul-de-sac or water.
M
- Master-planned community (MPC)
- A large developed community with shared amenities, multiple builders and phased release of homesites.
- Model home
- The professionally decorated, fully upgraded plan a community sells from - rarely priced like what a buyer actually builds.
- MUD (Municipal Utility District)
- A Texas financing district that funds a community's water and sewer infrastructure and adds a line to the property-tax bill.
N
- Notice and opportunity to repair (Texas RCLA)
- Under the Residential Construction Liability Act (Texas Property Code Chapter 27), a homeowner must give the builder written notice of a claimed construction defect and a chance to inspect and make a written offer of repair before filing suit. It is the operative Texas new-home defect process now that the Texas Residential Construction Commission - the state builder-registration and inspection body - was abolished in 2009, which left warranty terms to the builder's own contract and to any third-party warranty the builder buys. Check the statute for the current deadlines before quoting them.
O
- Options & upgrades
- Priced changes to the base home, from structural options to finish selections; a major source of builder margin.
P
- Phase / section / release
- Builders release homesites in batches, raising prices as each batch sells through.
- PID (Public Improvement District)
- A Texas assessment district a city or county creates to fund a development's infrastructure, repaid through an annual assessment levied on each lot. Distinct from a MUD, sometimes layered with one, and a real addition to a Central Texas buyer's yearly cost that the base price never shows. Texas law requires the assessment be disclosed to a purchaser - confirm the current form and code section before publishing specifics.
- Pre-drywall / frame walk
- The buyer walkthrough before insulation and drywall, when framing, wiring and plumbing are still visible.
- Preferred / in-house lender
- The builder's affiliated mortgage arm (DHI Mortgage, Lennar Mortgage); the best incentives usually require using it.
- Production builder
- Builds a fixed library of plans at volume on land it controls; the model behind nearly every national builder.
- Punch list
- The list of items a builder must correct before or just after closing.
Q
- Quick move-in (QMI) / inventory home
- A spec home already under construction or finished, sold as move-in ready.
R
- Rate buydown
- A builder-paid mortgage subsidy (a 2-1 buydown, or a permanent forward commitment) - the dominant new-home incentive in a high-rate market.
S
- Semi-custom builder
- Starts from a set plan library but allows structural and finish changes; the middle ground between production and custom.
- Slab-on-grade / post-tension slab
- A concrete slab foundation, often post-tensioned in expansive-clay markets like Central Texas to resist movement.
- Spec (speculative) home
- A home a builder starts without a buyer under contract, betting it sells during or after construction.
- Stick-built vs. modular vs. manufactured
- On-site framing, vs. factory-built modules assembled on site, vs. HUD-code homes built entirely in a plant.
T
- Third-party warranty
- Backed coverage from a provider like 2-10 Home Buyers Warranty or StrucSure, rather than the builder standing alone.
- Trade partner / subcontractor
- The framing, concrete, plumbing, HVAC and other crews a builder contracts rather than employs directly.
What people actually ask us
These are not answered here, deliberately. A short answer to any of them would be wrong more often than it was right, because the honest answer depends on your situation.
- What's the difference between a production builder and a custom builder?
- What is a spec home?
- What is a quick move-in home?
- What does base price mean on a new home?
- What is a lot premium?
- What is a master-planned community?
- What is a MUD tax in Texas?
- What is a PID assessment?
- What's the difference between a MUD tax and a PID assessment?
- What is build-on-your-lot?
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