Total Cost to Buy a Home in Austin TX 2024
Buyers often focus only on the down payment, then get surprised at closing by a bill they did not budget for. Here is every cost involved in buying a home in Austin and the surrounding Central Texas suburbs.
1. Down Payment
The largest upfront cost, though it can be reduced significantly:
| Loan Type | Rate | On $380K Home |
|---|---|---|
| VA Loan | 0% | $0 |
| FHA | 3.5% | $13,300 |
| Conventional | 3-5% | $11,400-$19,000 |
| Conventional | 20% | $76,000 |
2. Closing Costs
Typically 2-3% of the loan amount. On a $380,000 home, budget $7,600-$11,400.
Breakdown of typical Texas closing costs:
| Cost | Typical Amount |
|---|---|
| Origination fee | $1,000-$3,800 (0-1% of loan) |
| Appraisal | $500-$700 |
| Title insurance (owner's policy) | $1,500-$2,200 |
| Title insurance (lender's policy) | $400-$700 |
| Survey | $400-$600 |
| Recording fees | $100-$200 |
| Prepaid interest (15-30 days) | $600-$1,400 |
| Homeowner's insurance (1 year) | $1,800-$3,000 |
| Property tax escrow (2-3 months) | $2,000-$5,000 |
| HOA setup fee (if applicable) | $200-$500 |
3. Inspection Costs (Due Diligence Period)
| Inspection | Typical Cost |
|---|---|
| General home inspection | $350-$500 |
| Foundation inspection | $200-$350 |
| Pest/termite inspection | $75-$150 |
| Pool inspection (if applicable) | $150-$250 |
| Sewer scope | $150-$250 |
| HVAC inspection | $100-$200 |
| Total recommended | $600-$1,200 |
4. Option Fee
Unique to Texas: the option fee gives you the right to terminate during your inspection period. Typically $100-$300, paid to the seller. It is non-refundable but applies toward purchase price at closing.
5. Earnest Money Deposit
Typically 1% of the purchase price ($3,800 on a $380K home). Held in escrow and applied to your costs at closing. Refundable if you exit during the option period or under other contract contingencies.
6. Moving Costs
- Local move (Austin area): $800-$2,000
- Long-distance (from California, etc.): $3,000-$10,000+
Total Cash Needed by Scenario
| Scenario | Total Cash Needed |
|---|---|
| Veteran using VA loan, no DPA | $2,000-$5,000 (inspections, earnest, option) |
| FHA buyer with Texas DPA | $3,000-$6,000 |
| FHA buyer without DPA | $18,000-$26,000 |
| Conventional 5% buyer | $22,000-$32,000 |
| Conventional 20% buyer | $82,000-$100,000 |
How to Reduce Your Cash to Close
- Seller concessions: Ask the seller to pay up to 3-6% in closing costs
- Lender credits: Accept a slightly higher rate in exchange for lender credits toward closing costs
- DPA programs: Cover down payment and sometimes closing costs
- VA loan: Limits certain fees and sellers can pay up to 4% in concessions
Frequently Asked Questions
For a VA loan buyer with minimal costs: $2,000-$5,000 total. For an FHA buyer with down payment assistance: $3,000-$8,000. For an FHA buyer without DPA on a $380K home: $18,000-$26,000 total (down payment + closing costs + inspections). For a conventional 5% buyer: $22,000-$32,000 total.
In Texas, the seller typically pays for the owner's title insurance policy (a negotiable item but customary). The buyer pays for the lender's title insurance policy. This is different from most other states where the buyer pays for both. Negotiating seller-paid title is easier in slower markets.
Financial advisors recommend keeping 1-2% of the home's value in reserve for maintenance and repairs annually. On a $380,000 Austin home, that is $3,800-$7,600 per year. Older homes need more; new construction comes with builder warranties that cover many repairs in years 1-2.
