A builder usually prices your property as land: the lot’s usable width and depth, the building lines and lot coverage that deed restrictions and city codes allow, the trees, drainage and flood zone, and the cost to clear it. When those numbers support a new home worth far more than the old one, the same house can be worth more as a lot than as a home.
Rules and forms below are stated as of October 30, 2026, and this guide is updated when one changes.
A builder buys the land and the right to build on it
A builder usually pays for what it can build, not for your house. Anything that limits the size or placement of the new home it plans lowers the land price.
Working back from the finished home
Builders usually estimate what the finished home would sell for, then subtract the cost to build it, the soft costs (design, permits, insurance, interest and taxes during construction), the cost to sell, the cost to clear the site and the profit they need for the risk. What is left is the most that builder can pay for the land.
Hypothetical example: how the land number moves
Round numbers chosen only to show the arithmetic, not Houston prices or costs. A builder expects the new home to sell for $3,000,000 and budgets $2,450,000 for construction ($1,500,000), soft costs ($300,000), selling ($150,000), demolition ($50,000) and profit ($450,000). The land is worth $550,000 to that builder. If a floodplain line and a protected tree shrink the house so it would sell for $2,700,000, and costs fall to $2,350,000, the land number drops to $350,000. A $300,000 change in the finished price moved the land price by $200,000.
House value or lot value: how to tell
Your property is likely worth more as a lot when the land, not the house, carries most of the value.
- The appraisal record. Texas appraisal records list land and improvement values separately (Tax Code Section 25.02), so your Harris Central Appraisal District account shows both. When land is most of the total, a builder is a likely buyer. These are tax values, not offers.
- The house. An older, smaller house on a lot wide and deep enough for a much larger new home is the profile builders usually look for.
- The rules. Deed restrictions, a Village code, a floodplain or protected trees can cut the buildable area, and then a buyer who wants to renovate may pay more.
The surest answer comes from pricing the property both ways. The guide to selling a home in River Oaks, Tanglewood, West University or the Memorial Villages covers pricing the house. This guide covers the land.
What raises and lowers a lot’s value to a builder
Frontage, depth and the rules that limit the footprint matter most, then flood exposure, trees and clearing cost.
| Factor | What the builder checks | Where the rule is written |
|---|---|---|
| Frontage and width | Width at the building line, and whether the lot can be split | Chapter 42 in Houston; each Village’s zoning code |
| Depth | Room for the house between the front and rear setbacks | Deed restrictions; Village codes |
| Building lines | How far the house must sit from the street, the sides and the rear | Chapter 42 or the Village code; stricter deed restrictions control |
| Corner lot | A second street frontage and a second building line | Chapter 42 (10 feet on a local side street); Village codes |
| Lot coverage | How much of the lot the house and paving may cover | Village codes; Chapter 42’s small-lot standards |
| Flood zone | Floor height, fill limits and floodway limits | FEMA flood maps; Houston Chapter 19; Village flood and drainage rules |
| Trees | Which trees need a permit to remove and how many must stay | Village tree ordinances; the City’s right-of-way rule |
| Clearing | Utility disconnects, the demolition permit and slab removal | Houston Permitting Center guideline CE-1075; Village permit checklists |
In the City of Houston: Chapter 42 first, then the deed restrictions
In the City of Houston, Chapter 42 of the Code of Ordinances sets the floor and deed restrictions often set a higher one. Section 42-181 sets a 3,500-square-foot minimum single-family lot where there is wastewater service. Smaller lots, down to an average of 1,400 square feet, need a plat that meets performance standards, including more than 60 percent of each small lot left uncovered by buildings (Section 42-184). A new lot generally must be at least 20 feet wide (Section 42-185), and on a local street the standard front building line is 20 feet, with 10 feet along a side street (Section 42-156).
Those are minimums. Where deed restrictions require a greater building line or setback, the deed restrictions control (Section 42-150(b)), and the City’s Legal Department can enforce restrictions on use, setbacks, lot size and the number of structures by suit for injunction (City of Houston deed restriction enforcement).
Some blocks carry a Special Minimum Lot Size or Special Minimum Building Line designation, set at the lot size or front setback already met by at least 70 percent of the properties (60 percent in a City historic district). New lots cannot be smaller than the special lot size, new homes must sit behind the special building line, and both control over Chapter 42’s lesser minimums (Sections 42-150(c) and 42-197). The Planning and Development Department’s program page links to the map that shows them.
In the Memorial Villages: each city writes its own code
Bunker Hill Village, Hunters Creek Village, Piney Point Village, Hedwig Village, Spring Valley Village and Hilshire Village are separate cities, so each Village’s own zoning code sets a builder’s footprint. Three of them:
| Village | Minimum lot area | Standard front yard | Footprint limit |
|---|---|---|---|
| Bunker Hill Village, District A (Zoning sections 5.04 and 5.06) | 20,000 sq ft | 50 feet (40 on a cul-de-sac) | 45% impermeable; 55% total, permeable surfaces included |
| Hunters Creek Village (Section 44-160) | 22,500 sq ft | 50 feet | Building area 25% of the lot, outdoor pools excluded |
| Piney Point Village (Section 74-244) | 40,000 sq ft | 50 feet on most streets | Building area 30%; 50% with driveways and all impervious surfaces |
Older lots that miss today’s minimums follow their own rules. Hunters Creek Village caps building area on a nonconforming lot at one-third of the lot or 5,625 square feet, whichever is less (Section 44-218), and Piney Point Village allows a home on a nonconforming lot only with a plat its planning and zoning commission approves under Section 74-244. The comparison of River Oaks and the Memorial Villages sets the Villages side by side.
Flood zone, drainage and the floodway
The flood map sets how high a new house must sit and how much of the lot can be built on. In Houston, a new home in the 100-year or 500-year floodplain must have its lowest floor and utilities at or above the 500-year flood elevation plus 2 feet (Chapter 19, Section 19-33; AO zones use a depth rule). Chapter 19 generally bars new construction in a floodway, though it allows replacing a house there on elevated floor construction at least 3 feet above the 500-year flood level (Section 19-43), and does not allow development to reduce flood storage without mitigation (Section 19-34). A higher slab costs the builder more.
Start with the effective map on FEMA’s Flood Map Service Center. Chapter 19 also lets the City Engineer apply newer, more restrictive flood study data by written determination (Section 19-4). The Harris County Flood Control District’s MAAPnext maps are drafts as of October 30, 2026, shared for awareness only and not usable for insurance or regulatory decisions; FEMA is expected to release preliminary maps and open a formal review later. Harris County has 35 floodplain administrators and the District is not one of them, so the permitting city’s rules count: Hunters Creek Village wants contours on the survey of a lot in the 100-year floodplain and an elevation certificate, and Bunker Hill Village an engineer-sealed drainage design for every new home.
Trees
Trees can protect a lot’s value or cap it. Bunker Hill Village requires a permit to remove any tree over 5 inches in diameter and at least one tree per 1,000 square feet of lot area, a quarter of them in the front yard for new construction (Code Sections 4-183 and 4-184). Hunters Creek Village protects any tree with a trunk circumference of 18 inches or more and permits removal for construction only when it is necessary to make reasonable use of the site; once protected trees come out for a planned house, a later design must fit the cleared area for five years (Section 18-20). Piney Point Village’s forester reviews a tree form with every new-construction application. In Houston, a demolition may not remove trees in the street right-of-way.
Utilities, demolition and the cleared site
Clearing is a permitted sequence, and the builder prices it. In Houston, a master plumber disconnects the sewer and water lines and has that work inspected before the demolition permit can be requested; the slab comes out unless the building official approves an exception; an asbestos survey goes in with the application where one applies; and the demolition must pass final inspection before a new-construction permit can be sold (guideline CE-1075, revised January 2026). Hunters Creek Village’s demolition checklist adds Memorial Villages Water Authority approval, a CenterPoint Energy gas disconnect letter, proof the electric lines are cut and a tree survey.
Where builders buy: Spring Branch, the Memorial Villages and Tanglewood
Spring Branch
The Spring Branch neighborhoods are City of Houston super neighborhoods, so Chapter 42 and each subdivision’s deed restrictions apply. The City’s profile of Spring Branch East describes new home construction in many of its deed-restricted subdivisions, especially near Wirt Road. Marnie Greenwood’s closed sales on Compass include 32 in Spring Branch.
The Memorial Villages
Large minimum lots, deep front yards and coverage caps make the land itself the asset in the Villages. Her closed sales on Compass include 25 in the Memorial Villages: Bunker Hill Village 8, Hunters Creek Village 8, Piney Point Village 5, Hedwig Village 2 and Spring Valley Village 2.
Tanglewood
Tanglewood is a City of Houston neighborhood, and the City’s profile of the Greater Uptown super neighborhood notes large older homes there being replaced with larger new ones. Her closed sales on Compass include 16 in the Tanglewood area, 9 of them inside Tanglewood.
How a builder sale works
A builder sale usually uses the same Texas forms and title-company closing as a home sale, with a longer look at the land first.
The contract
The Texas Real Estate Commission’s One to Four Family Residential Contract (Resale), Form 20-19, effective July 1, 2026, fits a sale with the house standing. Its Unimproved Property Contract, Form 9-18, also effective July 1, 2026, is for land without buildings. If a builder offers its own contract, have a Texas real estate attorney read it before you sign.
The option period is the builder’s feasibility window
Paragraph 5B of the resale contract gives the buyer an unrestricted right to terminate within the number of days the parties write in, for an option fee paid to the seller. Builders use that window to check the survey, the title commitment and restrictions, the flood data, the trees and the permit path, and they usually ask for more days than an owner-occupant does. The days, fee and earnest money are negotiable. Paragraph 6D lets the buyer object to title matters that prohibit a use it names, and builders commonly name building a new home.
Survey, title and condition
Paragraph 6C offers three choices: the seller’s existing survey with the Texas Department of Insurance’s T-47 Residential Real Property Affidavit (or T-47.1 Declaration), a new survey at the buyer’s expense, or a new survey at the seller’s expense. Builders usually order their own boundary, topographic and tree surveys anyway, and usually buy as-is under paragraph 7D, which still lets them inspect and terminate during the option period.
Financing, closing and staying after closing
Some builders pay cash; others borrow, and a loan contingency goes in TREC’s Third Party Financing Addendum. Closing customarily runs through a title company. If you need time to move, TREC’s Seller’s Temporary Residential Lease (Form 15-7, effective January 5, 2026) covers a seller who stays no more than 90 days after closing. For who pays what, see the guide to seller closing costs in Houston.
Find out what your lot is worth to a builder
Request a value review that looks at your property both as a home and as a lot.
Off-market or listed: what each route trades
A quiet sale to builders trades exposure for privacy; an open listing trades privacy for competition between builders and owner-occupants.
- A quiet sale. The property goes to a short list of builders, with no public photos and fewer visitors. Marnie Greenwood often uses her network to sell properties off the Multiple Listing Service, including lots for builders.
- A Compass Private Exclusive. The property is marketed only to Compass agents and their buyers before a public launch. See Compass Private Exclusives.
- An open listing on the MLS. Builders and owner-occupants compete for the same property, the clearest test of whether the house or the lot is worth more, at the cost of a public price history.
Paperwork to pull before a builder walks the lot
Gather these before you talk price:
- Your survey and T-47 affidavit or T-47.1 declaration, if you have them.
- The recorded deed restrictions and every recorded amendment, from the county clerk or your title company.
- Any variance, permit or plat history with the City or your Village, and any special minimum designation on your block.
- Your appraisal district account, with the land and improvement values.
- Flood records: insurance, claims, any water in the house, and the FEMA zone.
The Seller’s Disclosure Notice still applies to most teardowns
A buyer’s plan to demolish does not by itself excuse the Seller’s Disclosure Notice. Texas Property Code Section 5.008 requires it from the seller of residential property with not more than one dwelling unit. Its exemptions include court-ordered, foreclosure and fiduciary sales, transfers between co-owners or to a spouse or lineal relative, and real property where the value of any dwelling does not exceed 5 percent of the value of the property. That last one fits some teardowns and not others, so confirm it with your attorney before checking the no-notice box in paragraph 7B(3) of the resale contract. TREC’s current Seller’s Disclosure Notice is Form 55-1, effective May 28, 2026. A buyer who receives a required notice only after signing may terminate for any reason within seven days of receiving it. The resale contract adds a second notice: paragraph 7I calls for TREC’s Seller’s Disclosure about Groundwater and Surface Water Rights (Form 61-0, effective July 1, 2026) unless every condition in 7I(3) is true, including no known well or pond and water only from a named city or utility.
Lead-based paint in a house built before 1978
The federal lead-based paint disclosure rule applies to the sale of housing built before 1978, and its listed exemptions (foreclosure sales and certain leases) do not include a sale for demolition (40 CFR 745, Subpart F). TREC’s addendum for it is Form 56-0, effective May 28, 2026. The buyer gets 10 days to test for lead, or another period agreed in writing, and can waive testing in writing.
Talk to a builder before you knock anything down
Selling the house standing keeps both kinds of buyer and your tax status.
Demolishing before you sell can cost you the homestead exemption and the owner-occupant buyers
Texas sets homestead eligibility as of January 1 (Tax Code Section 11.42), and a residence homestead is a structure occupied as your principal residence together with its land (Section 11.13(j)). With no house on January 1, the land does not meet that definition: no homestead exemption that year, and the 10 percent cap on increases in a homestead’s appraised value expires (Section 23.23(c)), so the land is taxed on its full market value. Section 11.135 continues the exemption during rebuilding only after a casualty or wind or water damage makes the house uninhabitable; it says nothing about a house the owner chooses to tear down. Demolition also removes every buyer who wanted the house. Talk to builders, and to your tax advisor, before you apply for a demolition permit.
Taxes at the sale
The year’s property taxes are split at closing. Paragraph 13 of the TREC resale contract prorates the current year’s taxes through the closing date, lets the proration account for any change in exemptions that will affect that year’s taxes, and has the parties adjust when the actual statements arrive. For each taxing unit’s rate, see Houston property taxes, Village by Village; for what happens to the exemption when you sell, see the Texas homestead exemption guide.
Frequently asked questions
Houston builders usually work backward from the new home: its expected sale price, minus construction, soft costs, selling costs, demolition and the builder’s profit, leaves the most the builder can pay for the land. Anything that shrinks the new house, such as a building line, a coverage cap, a floodplain rule or a protected tree, lowers the land price.
A Houston house is often worth more as a lot when the land carries most of the value, such as an older, smaller house on a lot wide and deep enough for a much larger new one. The appraisal district record lists land and improvement values separately, a first signal. The reliable test is pricing it both ways.
Usually yes. Texas Property Code Section 5.008 requires the notice from the seller of residential property with not more than one dwelling unit, and a buyer’s plan to demolish is not an exemption. One exemption covers real property where the value of any dwelling does not exceed 5 percent of the property’s value; confirm with an attorney before checking the no-notice box in the TREC contract.
Demolishing first puts two things at risk. Texas sets homestead eligibility on January 1, so a house that is gone by then leaves land with no homestead exemption and no 10 percent appraisal cap. Demolition also removes every buyer who wanted the house itself.
Splitting a Houston lot takes a plat that meets Chapter 42 of the City Code: a 3,500-square-foot minimum lot, or smaller lots averaging at least 1,400 square feet when the plat meets performance standards. Deed restrictions that set a larger lot size or building line control, and a Special Minimum Lot Size designation on the block prevails over Chapter 42’s lesser minimum.
Each Memorial Village applies its own zoning code. As of October 2026, Bunker Hill Village’s District A requires a 20,000-square-foot lot and caps impermeable coverage at 45 percent, Hunters Creek Village requires 22,500 square feet and caps building area at 25 percent, and Piney Point Village requires 40,000 square feet and caps building area at 30 percent. All three regulate tree removal.
The flood zone sets how high a new Houston home must sit and how much of the lot can be built on. Chapter 19 of the City Code puts the lowest floor of a new home in the 100-year or 500-year floodplain at the 500-year flood elevation plus 2 feet and generally bars new construction in a floodway. A higher slab costs more and usually lowers the land price.
The Texas Real Estate Commission’s resale contract, Form 20-19, effective July 1, 2026, covers a sale with the house standing, and its Unimproved Property Contract, Form 9-18, covers vacant land. Builders usually negotiate a longer option period under paragraph 5B. Have an attorney read any builder-drafted contract.
For a house built before 1978, yes. The federal lead-based paint disclosure rule in 40 CFR 745 applies to sales of pre-1978 housing, and its listed exemptions, foreclosure sales and certain leases, do not include a sale for demolition. TREC’s lead-based paint addendum is Form 56-0, effective May 28, 2026, and the buyer may waive the 10-day testing period in writing.
A seller can stay after closing if the builder agrees. The Texas Real Estate Commission’s Seller’s Temporary Residential Lease, Form 15-7, effective January 5, 2026, covers a seller who remains no more than 90 days after closing. The rent and terms are negotiated.
Related guides
- Selling a Home in River Oaks, Tanglewood, West University or the Memorial Villages (2026)
- River Oaks vs the Memorial Villages (2026)
- Houston Property Taxes, Village by Village (2026)
- Texas Homestead Exemption in Harris County (2026)
- Seller Closing Costs in Houston (2026)
- About Marnie Greenwood, Broker Associate at Compass
- Compass Private Exclusives
- What’s My Home Worth?
Selling a lot or teardown in Spring Branch, the Villages or Tanglewood?
On HAR.com, Marnie Greenwood’s record shows 161 homes sold and 71 leased in the last five years, and RealTrends Verified credits her with 26 transaction sides and $37.3 million in sales volume in 2025. Her closed sales on Compass include 32 in Spring Branch and 25 in the Memorial Villages.
Sources
- Texas Legislature: Property Code Section 5.008; Tax Code Sections 11.13, 11.42 and 11.135, Section 23.23 and Section 25.02 (in force October 30, 2026)
- City of Houston, Code of Ordinances: Chapter 42, Subdivisions, Developments and Platting and Chapter 19, Floodplain (version of October 22, 2026)
- City of Houston: Planning and Development, Special Minimum Lot Size and Building Line program; Legal Department, Deed Restrictions; Super Neighborhoods 86, Spring Branch East and 21, Greater Uptown (read October 30, 2026)
- Houston Permitting Center, Building Demolition Guideline CE-1075 (revised January 2026)
- City of Bunker Hill Village: Code of Ordinances, Appendix A sections 5.04 and 5.06 and sections 4-183 and 4-184 (version of April 22, 2026); New Home and Re-Construction Projects (updated March 2023)
- City of Hunters Creek Village: Code of Ordinances, sections 18-20, 44-159, 44-160 and 44-218 (version of December 9, 2025); Building Demolition checklist and New Residence checklist (posted January 2023)
- City of Piney Point Village: Code of Ordinances Chapter 74, section 74-244 (version of November 10, 2025); New Construction checklist 2026
- Harris County Flood Control District, MAAPnext and About MAAPnext (draft status as of October 30, 2026); FEMA, Flood Map Service Center
- Texas Real Estate Commission: Form 20-19 and Form 9-18 (effective July 1, 2026); Form 55-1 and Form 56-0 (effective May 28, 2026); Form 61-0 (effective July 1, 2026); Form 15-7 (effective January 5, 2026)
- Texas Department of Insurance, T-47 Residential Real Property Affidavit (effective November 1, 2024)
- U.S. Environmental Protection Agency, 40 CFR Part 745, Subpart F (current as of October 30, 2026); Harris Central Appraisal District
- Marnie Greenwood’s HAR.com profile, RealTrends Verified profile for 2025 and closed-sales record on Compass (each read October 29, 2026)
This guide is general information, not legal, tax or financial advice. Confirm the details for your own situation with a Texas real estate attorney, a CPA or tax advisor, your title company, or the Harris Central Appraisal District.