The Duplex Store

Costs of Buying in Austin

Here is a list of some of the upfront costs you will experience in purchasing homes here in Austin. Earnest money and option fee are the only checks we need upfront. Copies will suffice to get the offer through, but upon acceptance we need those checks overnighted to our office immediately.

$1000 Earnest Money - (for homes over $100k), sometimes 1% of sales price for foreclosures or higher price properties. Made out to the title company. Personal check preferred, or money wired directly to Title company. If the property is $200k or over, 1% is normally required and not a choice. For commercial property, earnest money could be as high as $10,000 or $50,000 - it depends largely on the sellers.

$100 Option Fee - This is the source of great confusion in many deals starting out. For some folks out of state, you may not be familiar with this. In California, folks have 17 days unrestricted right to "review" and back out of it if you don't want the property during that time. In Texas, this is basically a "no fee option period of 17 days". Here we don't have a standard number of days to review or a standard fee for this review period. In brief the option fee is a fee paid directly to the Owner to give you, the Buyer, the unrestricted "right to review" for an agreed upon number of days (10 days being the generally accepted norm) to take the property off the market and do inspections and bid for repairs. This fee is normally $100 for 10 days. However you can pay $1 for 10 days - it's really up to the seller to decide whether or not they want to take the house off the market for 10 days for only $1. Pretty unlikely, but it's happened. Consider the alternative - Would you rather lose $1000 earnest money, or the $100 option fee?

$250-$450 - Inspection. Price is based on # of units and sq.ft. Single family homes are around $250-$300. This is required by me. I can't go into a deal unless you get it inspected. Even on a new home, you've got to get an inspection. You would be surprised how many things you'll find! You have the right to choose who you want to inspect the house, I can only make recommendations.

$350-$450 - Appraisal. Required by the Lender, most likely this is paid for at closing, however your lender may require a deposit to guarantee payment in case the deal falls through. This can happen during the 10-day option period, but most often happens the 2nd week of processing. Appraisers you normally don't get the choice, but you can always talk to your lender and see if you can choose.

$300-$400 - Survey. This is also required by the Lender and Title company. About half of all owners have a copy of their old survey, I try to get ahold of this. However, even if they have a copy of their old one, the Buyer is suggested to order a new one in most cases. This happens after appraisal and before closing, about the 3rd week. This is similar to the appraisal, it gets paid at closing but the lender may need a deposit check.

Closing Costs - These vary, but are comprised of lender origination fees, prepaid property taxes and prepaid home owner's or hazard insurance. You can expect to pay possibly 2% or even 5% in closing costs. As the name implies, this is not really an upfront cost, but it will be cash out of pocket at the closing table.