McKinney's New-Construction Incentives Aren't Discounts. Here's Where the Money Actually Goes.

The builder says there's no price cut this quarter, then hands you a flyer listing a rate buydown, a closing cost credit, and a free washer and dryer. That isn't generosity. It's a decision about who absorbs the cost of a slower market, and the builder has already decided it won't be the price on the sign.

That decision matters more than most buyers realize, and not just for their own monthly payment. It changes what a resale seller two streets over can prove their house is worth. It changes what shows up on your tax bill the January after you move in. If you're comparing a quick move-in at Painted Tree against a resale listing in Stonebridge Ranch or Craig Ranch, the sticker prices you're looking at aren't measuring the same thing, and knowing why is the difference between negotiating well and negotiating blind.

Why Builders Won't Just Lower the Price

A price cut on one house in a community resets the baseline for every house in that phase, including the ones the builder hasn't sold yet and the ones current owners are hoping to sell in a year or two. A rate buydown or a closing cost credit doesn't carry that risk. It never touches the recorded sale price, so it never shows up in the county's transaction history as a markdown.

That's the entire logic behind why 2-1 temporary buydowns, permanent rate buydowns, and "pick one" credit menus have become the default incentive structure across new-construction communities in Collin County this year. A temporary buydown drops the rate by two points in year one and one point in year two before it reverts to the note rate. A permanent buydown costs the builder roughly 1 percent of the loan amount for every quarter point shaved off, funded through discount points at closing. Either way, the home closes at full price in the public record. The discount lives in the financing, not the deed.

One builder in Painted Tree's Village District structured this exactly that way this summer: pick exactly one of four options, a flat credit toward closing costs, a price reduction, a move-in package of appliances and blinds, or a credit toward HOA dues, and the closing-cost option only applied if you financed through the builder's preferred lender. That's not a menu designed to maximize your savings. It's designed so the builder never has to choose the one option, the price cut, that would show up as a comp for the next buyer in that same section.

The typical incentive package across North Texas new construction runs somewhere between $8,000 and $25,000 in value, and builders routinely build 2 to 4 percent into the base price to fund it. Whether you come out ahead depends entirely on whether you'd have negotiated a better rate through an outside lender anyway, not on the size of the number printed on the flyer.

What This Does to the House Down the Street

Here's the part that rarely gets explained to buyers weighing new construction against resale in the same part of McKinney: an appraiser pulling comps for a resale listing in Stonebridge Ranch or Craig Ranch can't see the incentive. They see a closed sale at full price. If three quick move-ins nearby all closed with hidden buydowns instead of real discounts, the comp set looks stronger than the actual demand supporting it.

That cuts both ways. It can prop up a resale seller's asking price in the short term. It can also mean a buyer's own appraisal on an existing home comes in lower than expected once the market catches up, because the "full price" comps it was compared against were never really full price in economic terms, just in paperwork.

The three submarkets below aren't measuring identical things, and that's the point. Painted Tree's numbers reflect builder list prices with incentives layered on top. Stonebridge Ranch reflects what buyers actually closed on. Craig Ranch reflects what sellers are currently asking, not yet tested against an appraisal at all.

None of these three numbers were built the same way. One is an ask, one is a close, and one hasn't sold yet. Treating them as directly comparable is exactly the mistake that turns into a low appraisal or an over-anchored offer.

If you're a buyer and your resale offer appraises below contract because of thin or skewed comps, Texas gives you a real lever. The TREC contract includes a separate appraisal gap amendment, distinct from the inspection contingency in Paragraph 11, and any buyer can file a Reconsideration of Value with three recent comps within a half mile at no cost, typically processed within three to five business days. In competitive DFW submarkets, appraisal gaps of $10,000 to $45,000 aren't rare. Knowing which lever to pull, gap coverage, a price reduction, or an ROV, before you're staring at a shortfall at the closing table is worth more than any single flyer incentive.

The Tax Bill That Arrives a Year Late

New construction carries a second cost that incentive flyers never mention. When you close, the county often assesses the home at its incomplete-improvement value, meaning the value on the tax roll doesn't yet reflect the finished house. That changes the following January, when the Collin Central Appraisal District reassesses the property at full market value. Buyers who budgeted their monthly payment off the first year's tax estimate can see that number climb noticeably once the reassessment lands, right around the same time the temporary rate buydown starts reverting toward the full note rate.

The way to blunt that increase is the homestead exemption, and the timing is unforgiving. Collin Central Appraisal District requires the application be filed between January 1 and April 30 of the tax year, and applications received after March 15 typically won't make it onto the Notice of Appraised Value the district mails around April 15. Miss the April 30 deadline entirely and you're filing a late application, if the district accepts it at all, while paying the full unexempted bill in the meantime. Skip the exemption altogether on a new build and the added monthly cost can offset a meaningful share of whatever the builder's buydown just saved you.

Two Numbers to Ask For Before You Sign Anything

Every incentive, whether it's a rate buydown, a closing credit, or an appliance package, can be translated into two figures. Ask the builder or your agent to run both before you compare offers.

1. The monthly payment impact. What does your principal and interest payment look like in year one, year two, and after any temporary buydown expires and reverts to the note rate.
2. The cash-to-close impact. How much of your own money does this incentive actually keep out of the transaction, versus how much is offset by a higher base price or a preferred-lender fee you wouldn't have paid otherwise.

A permanent buydown usually wins if you're staying long term. A closing cost credit usually wins if cash on hand is the constraint. A design credit only wins if you were going to spend that money at the design center anyway. None of them win automatically just because the flyer says "incentive."

A Few Questions Worth Asking Before You Compare

Does a builder's rate buydown show up anywhere in the public sale price? No. The recorded sale price reflects the full contract price. The buydown is funded through the lender at closing and never appears as a discount in county records or MLS history.

I'm selling a resale home near a new-construction community. Should this change my pricing strategy? It's worth knowing which nearby closings involved heavy incentives before you set an asking price off those comps. A comparative market analysis that accounts for incentive-heavy new construction sales looks different than one that treats every closed sale as an apples-to-apples price.

What actually happens to my tax bill the first year I own a new build in McKinney? Expect the first year's assessment to reflect an incomplete or partially built value, followed by a reassessment to full market value the following January. Filing your homestead exemption between January 1 and April 30 is the main lever available to soften that increase.

If you're weighing a quick move-in against a resale listing anywhere between Painted Tree, Stonebridge Ranch, and Craig Ranch, the honest comparison takes more than two list prices side by side. Harman Cheema at HXC Real Estate works this exact stretch of McKinney and can walk through what a specific incentive actually nets you against a specific resale option. Message Harman on WhatsApp to start your McKinney home search or run the real numbers on a new-construction offer before you sign anything.