How New Construction Cash Back Works in Texas

Updated November 2026 · John Baptiste, Local Realty Agency Mid-Cities

What is new construction cash back?

When you buy a new construction home in Texas, the builder pays a commission to the agent who represents you. Your agent can share a portion of that commission with you at closing. That’s cash back.

With this program, you get 1% of the purchase price back. On a $350,000 home, that’s $3,500 credited to you at the closing table. On a $500,000 home, it’s $5,000.

The money comes from the agent’s commission. It does not increase the price of the home, and it does not come out of the builder’s pocket. The Texas Real Estate Commission (TREC) allows this, and the Consumer Financial Protection Bureau (CFPB) has recognized commission rebates as a way for buyers to reduce their cost of purchasing a home.

How does a 1% cash back rebate work?

The process is simple. Here’s how it goes:

1. You reach out before visiting any builder communities. A quick call or text is all it takes.
2. Your agent registers you with the builder. This is standard practice in new construction and lets the builder know you’re represented.
3. You tour model homes, pick your lot, choose your floor plan, and work through the details with the builder’s sales team. Your agent is there to review the contract and keep things on track.
4. At closing, the builder pays the buyer agent commission per the listing agreement.
5. Your agent credits 1% of the purchase price back to you. It shows up as a line item on your closing disclosure, processed through the title company.

The whole thing is documented, transparent, and handled through normal closing channels.

Is it legal to get cash back from your agent in Texas?

Yes. Texas allows commission rebates to homebuyers.

The Texas Real Estate Commission (TREC) permits licensed agents to rebate a portion of their commission to their clients, provided the rebate is disclosed to all parties and recorded on the closing disclosure.

The U.S. Department of Justice has also supported commission rebates as a pro-consumer practice. The DOJ has taken the position that rebates benefit buyers by lowering their overall transaction costs.

The requirements in Texas are straightforward:

• The rebate must be disclosed to the builder, the lender, and the title company
• It must appear on the closing disclosure (CD) or settlement statement
• It must be processed through the title company

This is not a workaround or a loophole. It’s a standard practice regulated by TREC.

Source: TREC.texas.gov, DOJ Competition Advocacy

How much cash back can you get on a new build?

The cash back is 1% of the purchase price. Here’s what that looks like at different price points:

Use the calculator on our homepage to see the number for the specific home you’re considering.

Why would an agent give you cash back?

Fair question. Here’s the honest answer.

New construction deals are different from resale transactions. When you buy a resale home, your agent is coordinating inspections, negotiating repairs, managing appraisal issues, and handling a lot of moving pieces.

On a new build, much of that work is handled by the builder’s process. The home is new. There’s a builder warranty. The timeline and paperwork flow through the builder’s team.

Because the workload is different, the math works to share a portion of the commission with you. You get money back, your agent earns a fair fee, and the deal gets done. It works for both sides.

Who pays for the cash back?

The builder pays a commission to the buyer’s agent as part of every new construction sale. This is built into the builder’s business model and is standard across the industry.

Your cash back comes from that commission. It does not come from the builder. It does not get added to the price of your home. The builder pays the same commission whether your agent offers cash back or not.

Here’s the part that matters: if you buy without an agent, the builder doesn’t lower the price by the commission amount. That budget simply stays on the builder’s side. Having an agent costs you nothing as the buyer, and with a cash back program, it actually puts money in your pocket.

Does cash back affect your mortgage or loan?

In most cases, a commission rebate does not create any issues with your loan. The most common approach is to apply the rebate as a closing credit, which reduces your out-of-pocket costs at closing.

The rebate appears on the closing disclosure as a credit from your agent to you. Lenders see it, the title company records it, and it’s fully transparent.

A few things to keep in mind depending on your loan type:

• Some loan programs may not allow the credit to exceed your actual closing costs
• Certain programs may have specific rules about how credits are applied
• Your lender can confirm what applies to your situation early in the process

The Consumer Financial Protection Bureau (CFPB) requires all credits and rebates to be disclosed on the closing disclosure document. Discussing the rebate with your loan officer early keeps everyone on the same page.

Do you pay taxes on a real estate commission rebate?

According to IRS guidance, a commission rebate on a home purchase is generally treated as a reduction in the purchase price, not as taxable income.

In practical terms, you typically don’t owe income tax on the cash back you receive. The IRS views it like a price adjustment on the property.

It may affect your cost basis if you sell the home later, which could factor into a capital gains calculation down the road. A tax professional can walk you through the specifics for your situation.

Source: IRS guidance on homebuyer rebates

Why does it matter if you have an agent on your first builder visit?

New construction works differently than buying an existing home. Most builders have a registration policy: the agent who is with you on your first visit, or who registers you before that visit, is recognized as your representative for that community.

If you visit a model home before connecting with an agent, the builder’s team may register you as an unrepresented buyer. That’s their standard process. Once that happens, bringing an agent in later can be difficult depending on the builder’s policy.

This isn’t anyone trying to take advantage of you. It’s just how builder registration systems work. They need to know on day one who is representing the buyer so commissions are tracked properly.

The simplest move is to reach out to an agent before your first visit. A quick call or text is enough. Your agent can register you with the builder by phone or email, often before you even walk through the door.

If you’ve already visited a builder community on your own, it’s still worth reaching out. Some builders accept agent registration after the first visit, especially if you haven’t signed a purchase agreement yet. Every situation is different, and it costs nothing to ask.

Do you need a buyer’s agent for new construction?

You’re not required to have one. But here’s what having your own agent brings to a new build transaction:

• Contract review. Builder contracts are long and detailed. Your agent knows what to look for and what questions to ask.
• Timeline coordination. New builds take months. Your agent keeps track of milestones, walks, and closing dates alongside the builder’s team.
• Lender coordination. Construction timelines can affect rate locks and financing. Your agent and your lender stay in sync.
• Someone in your corner. The builder’s sales team is knowledgeable and helpful, but they represent the builder. Your agent represents you.
• Cash back. Without an agent, there’s no commission to rebate. The builder pays the same amount either way. The question is whether any of that money comes back to you.

The builder pays the buyer agent commission as part of the transaction. Having an agent doesn’t cost you anything as the buyer.

How is new construction different from buying a resale home?

A few key differences matter when it comes to cash back.

On a resale deal, there are typically more moving parts for your agent: home inspections, repair negotiations, appraisal disputes, seller counters. The commission your agent earns reflects that workload.

On new construction, the builder handles much of the process. The home is new and comes with a warranty. There’s no negotiation over a leaking roof or an old HVAC system. The transaction is more streamlined.

That’s why cash back programs tend to be more common on new construction. The agent’s workload is different, which makes it possible to pass a portion of the commission back to you.

There are also differences in how commissions are structured. On resale, commissions are negotiated as part of the listing agreement between the seller and their agent. On new construction, the builder sets the buyer agent commission as part of their sales program. Rates vary by builder and community.

What happens at closing with a commission rebate?

Everything goes through the title company, just like every other part of the closing. There is nothing informal or off the books about it.

Here’s the sequence:

1. Before closing, your agent notifies the title company and the builder that a commission rebate will be applied.
2. The title company adds the rebate as a line item on the closing disclosure.
3. At closing, the builder pays the full buyer agent commission to your agent’s brokerage.
4. The brokerage credits 1% of the purchase price to you, either as a closing cost credit or a check after closing, depending on lender guidelines.

The lender sees it. The title company records it. The builder is aware. It’s a standard, documented transaction.

How do you get started with new construction cash back?

Three steps:

1. Reach out before visiting any model homes. A call, text, or the form on this page. That’s it.
2. Get registered with the builder. Your agent handles this, usually the same day.
3. Go tour homes. Shop, compare, take your time. When you find the right one, your agent handles the rest. At closing, 1% of the purchase price comes back to you.

Frequently Asked Questions