Austin Home Buyer FAQ

Q1: Is now actually a good time to buy in Austin, or should I wait?

In 2025 Austin has shifted from a frenzied seller’s market to one of the strongest buyer markets in the country. A recent Redfin analysis ranked Austin the number one buyer’s market in the U.S., with roughly 130 percent more sellers than buyers and homes staying on the market longer, which gives buyers more leverage and more room to negotiate.

Mortgage rates have also softened from their peaks above 7 percent in early 2025. Recent Freddie Mac data shows the average 30-year fixed rate hovering around the low 6 percent range, while the average 15-year fixed rate is in the mid 5 percent range, and many well-qualified buyers are again seeing quotes in the mid 5 percent range depending on loan type, points, and program.

Whether you should buy now depends on three things: your budget, your timeline, and your job and life stability. If you’re financially ready, this softer market and easing rate environment let you focus on getting the right home and terms instead of racing to win a bidding war. With us, we start by running the numbers for your specific budget, preferred neighborhoods, and likely payment range so you’re not guessing off national headlines.

Q2: How much home can I afford?

Most lenders look at your debt-to-income ratio, your credit profile, and how much you have for down payment and reserves. In 2025, many loan programs still target a maximum total debt load around the mid 40 percent range of your gross income.

A quick online affordability calculator is a starting point, but it’s not a plan. When we sit down together, we look at three numbers side by side: the payment you qualify for, the payment you’re actually comfortable with, and the price range that works in the Austin neighborhoods you care about.

Our goal is simple: a payment that lets you sleep at night, not just a loan you can technically get.

Q3: How much do I need for a down payment and closing costs?

You don’t need 20 percent down to buy a home. Many buyers use 3 to 5 percent down on conventional loans, with some programs allowing even less or zero down for VA and certain USDA buyers.

On top of that, most buyers pay closing costs in the range of about 2 to 5 percent of the purchase price. These cover lender fees, title, appraisal, and prepaid items like taxes and insurance.

In your first strategy meeting, we’ll map out a realistic cash-to-close number for you and talk through ways to reduce that upfront cash, including seller credits and local assistance programs when available.

Q4: What credit score do I need to buy a home?

Minimums vary by loan type, but in 2025 most conventional loans expect a score of at least 620, while government-backed programs can allow lower scores with specific conditions.

That said, your rate and monthly payment improve as your score goes up. Recent data shows that higher-scoring buyers are getting noticeably better interest rates than buyers in the mid 600s.

If your score needs work, we can connect you with lenders who specialize in helping buyers build a 6 to 12 month game plan instead of just saying “no”.

Q5: What is the first step in the home buying process?

The first real step is a full pre-approval, not just a quick online pre-qualification. A pre-approval means a lender has reviewed your income, credit, and assets and given you a written approval letter, which sellers and listing agents now expect before taking offers seriously.

With Shipman Partners, we pair that pre-approval with a strategy session that covers neighborhoods, timing, and your must-haves. That way your search is focused from day one.

Q6: How long does it take to buy a home from start to finish?

Once your offer is accepted, a typical contract-to-close timeline in today’s market is about 30 to 45 days for a financed purchase. That window covers inspections, appraisal, loan underwriting, title work, and final closing. National guides and lender data show an average closing time in the low to mid 40-day range when financing is involved.

Before that, your lender pre-approval usually takes anywhere from a few days to a couple of weeks, assuming you have a decent credit score and provide documents promptly.

From our experience at Shipman Partners, the majority of buyers fall into a three to six month window from the time they get serious about the process to the day they close on their home. That timeline includes learning the market, getting pre-approved, touring homes, making offers, and then completing the 30 to 45 day contract period once an offer is accepted.

We’ve also seen both extremes. We’ve helped cash buyers who needed to move quickly go from first conversation to closing in under 30 days. On the other end of the spectrum, we’ve helped very specific buyers who took a year or more just to find the right home that truly fit their needs. Whatever your situation calls for, we’re with you from start to finish so the process feels guided rather than rushed.

Q7: Do I really need my own buyer’s agent?

In today’s environment, this is one of the most common questions buyers ask. A good buyer’s agent should help you understand local pricing, spot red flags, structure offers, and negotiate both price and terms in your favor, rather than leaving you to figure it out against professionals who do this every day. Consumer and industry guidance consistently notes that the listing agent’s job is to get the best price and terms for the seller, not the buyer.

Even under the new commission rules, most transactions still end up with the seller covering some or all of the buyer agent commission as part of the overall deal, including many builder sales that offer a flat buyer broker fee. Recent reporting shows that while buyers now sign agreements that make their agent’s fee explicit, sellers in most markets still end up paying the buyer side fee at closing because they want access to represented buyers and smoother transactions.

That means in practice you’re usually getting professional representation on the buy side without writing a separate check for it, while the seller already has a listing agent (and in the case of builders, a sales team and legal department) whose job is to protect their interests and maximize their outcome.

There’s no single academic study that cleanly says, for example, that buyers save a specific percentage when they use a buyer agent, compared to going alone. Most of the hard data is on the seller side, where FSBO statistics show that owners who skip agents tend to net significantly less than those who use professional representation, suggesting that skilled agents do move financial outcomes. Research on agent and brokerage characteristics also finds that agent skill and firm quality have a measurable impact on prices and outcomes, especially in cooler markets where negotiation matters more.

On top of that, multiple consumer pieces warn that buyers who go directly to the listing agent often end up paying more or missing important issues because that agent can’t fully advocate for them.

Our view is simple: the seller already has a professional negotiator on their side. Without a knowledgeable buyer agent truly representing you, you’re betting that you can out-negotiate the pros whose everyday job is to get the highest price and strongest terms for the seller. At Shipman Partners, our job is to level that playing field and put someone equally experienced on your side of the table.

Q8: After the 2024 NAR settlement, who pays the buyer agent commission?

The big change is transparency, not that buyers suddenly write a separate check for their agent. Since August 17, 2024, buyers working with a REALTOR are asked to sign a written agreement that clearly spells out how their agent is paid and what services they provide.

In practice, most buyer agent fees are still built into the overall deal and negotiated so they’re paid from the seller’s proceeds at closing. Recent reporting shows that while buyers are now technically responsible for their agent’s fee, the majority still negotiate for the seller to cover that cost as part of the transaction.

On our side, we walk you through exactly how our compensation works before you sign anything and make sure it’s aligned with your budget and goals.

Q9: Why do I have to sign a written buyer representation agreement just to tour homes?

This is part of the same 2024 rule changes. NAR now requires that buyers working with REALTORS sign a written buyer agreement before touring homes with that agent. The goal is to make the relationship, responsibilities, and compensation clear up front instead of buried in fine print.

Our agreement explains exactly what we do for you, how we’re paid, and how we handle conflicts of interest. It’s designed to protect you, not trap you.

Q10: What kind of mortgage should I choose and how do interest rates affect me?

The right loan depends on your timeline, your risk comfort, and your cash position. Most buyers still use fixed-rate loans, but there are choices across conventional, FHA, VA, USDA, and other programs, each with different rules on credit, down payment, and mortgage insurance.

Rates have come down from early 2025 peaks above 7 percent. Recent data from Freddie Mac and major news outlets shows the average 30-year fixed rate sitting around the low 6 percent range, while the average 15-year fixed is in the mid 5 percent range. Many well-qualified buyers are again seeing quotes in the mid 5 percent range for certain loan programs and structures, especially when they choose shorter terms or pay points.

Even a small change in rate can move your monthly payment more than you might expect. We help you run side-by-side scenarios so you can see how payment, cash to close, and break-even timelines change with different rate, term, and loan options, and choose a combination that fits your life, not just a lender’s worksheet.

Q11: Are there first-time buyer or down payment assistance programs in Austin or Texas?

Yes. In addition to national programs, Texas and local agencies regularly offer down payment and closing cost assistance, especially for first-time buyers and certain income ranges. Many of these are delivered through participating lenders and can change year to year based on funding.

Instead of pointing you at a random list, we coordinate with trusted local lenders who work with these programs daily so you know which options realistically fit your situation.

Q12: How much should I offer on a home and will I have to bid over asking?

In a strong buyer’s market like Austin’s 2025 environment, homes are taking longer to sell and price reductions are common in many segments. That means you often don’t need to bid over asking just to be in the running.

For any home you’re serious about, we prepare a custom market analysis that looks at recent comparable sales, current competition, and days on market. From there we recommend a price and terms strategy that fits both the data and your risk tolerance.

Q13: What are contingencies and which ones should I keep?

Contingencies are built-in protections that let you cancel or renegotiate if certain things don’t go as expected. The most common ones are for financing, appraisal, and inspections. In a more balanced or buyer-friendly market, most buyers keep these protections firmly in place instead of waiving them.

We walk you through what each contingency does, when you can safely tighten timelines, and when it’s smart to stand firm for your own protection.

Q14: What happens during inspections and do I really need one?

A professional home inspection is one of the most important parts of the process. In Texas, a typical inspection in 2025 usually costs somewhere in the mid $300 to $600 range for a standard single-family home, depending on size and complexity. Inspectors examine major systems and structure and then deliver a written report that highlights both routine maintenance items and potential problems.

Once the report comes in, you usually have several options: ask the seller to make repairs, request a price reduction, negotiate a closing cost credit, or in serious cases use your inspection contingency to walk away and recover your earnest money. Guides from Redfin, Zillow, ConsumerAffairs, and others all describe inspection negotiations as a normal part of the process rather than something unusual. Recent Redfin data also shows that seller concessions of some kind are becoming more common again, appearing in roughly 40 to 45 percent of transactions in 2025 as the market has shifted toward buyers.

In our experience at Shipman Partners, the majority of our buyers negotiate price reductions, repair credits, or seller-paid items that are well in excess of the cost of the inspection. That doesn’t happen in every single case, but it’s common enough that the inspection is usually a very good investment.

We also strongly recommend inspections even on new construction. Many buyers assume that city building inspectors and builder warranties are enough, but national consumer and industry sources repeatedly say that new homes can still have hidden issues, and that a private inspection is recommended even when the house is brand new. In our own Austin area transactions, every single new construction inspection we’ve been involved with has turned up multiple items that the builder agreed to correct before closing.

Even if those items would be covered by a builder warranty later, it’s almost always easier and less stressful to have them addressed before you close rather than spending weeks or months trying to get warranty work scheduled. The inspection gives you leverage at the right time and helps protect your investment from day one.

Q15: What if the appraisal comes in low?

If the appraised value is lower than the contract price, there are several options: renegotiate the price, have the seller make concessions, bring extra cash to closing, or cancel under your appraisal contingency if your contract allows it.

Because we track Austin pricing trends closely, our goal is to structure offers that already anticipate where appraisal is likely to land, which reduces surprises.

Q16: Can I back out of a contract and will I lose my earnest money?

You can usually cancel without losing your earnest money if you’re still within an active contingency period and your reason fits that contingency, such as financing falling through, serious inspection issues, or an appraisal problem that can’t be resolved. Outside those protections, backing out often means forfeiting some or all of your earnest money. Consumer and industry guidance is very clear that buyers should understand these windows before they sign, because they’re your main safety valves.

In Texas, one of the most important protections is the option period. The option period is a negotiated number of days that starts once the contract is fully executed. During this period, you pay the seller a separate, usually non-refundable option fee in exchange for the right to terminate the contract for any reason at all and still receive your earnest money back.

Option periods in our market are commonly written in the seven to fourteen day range, though the exact number of days and the fee amount are negotiable. During that time you typically complete inspections and initial negotiations. If you decide the home isn’t right for you for any reason during the option period, you can terminate, lose only the option fee, and recover your earnest money. Once the option period ends, your ability to walk away cleanly becomes much more limited.

Part of our job is to make sure you know exactly how long your option and other contingencies last, what has to happen inside those windows, and what the financial risk would be if you chose to cancel at any point.

Q17: What other costs should I expect besides my mortgage payment?

Common “hidden” or overlooked costs include property taxes, homeowners insurance, HOA dues, routine maintenance, and bigger repairs like roofs or HVAC over time. National guidance and recent consumer pieces point out that buyers should also budget for inspections, utility setup, and ongoing maintenance reserves.

When we build your budget, we include realistic estimates for taxes, insurance, and utilities based on the homes and neighborhoods you’re targeting so you have a full monthly and yearly picture, not just principal and interest.

Q18: What happens at closing and when do I get the keys?

Closing is the final signing appointment where you sign your loan documents and the deed is recorded. In most cases, once the funds are delivered and the transaction records, you receive your keys the same day, often right after closing.

We coordinate with the title company, lender, and seller so you know exactly what to bring, when your utilities should be switched, and when you can plan your actual move.

Q19: I plan on buying a new home from a builder. Why would I need an agent?

When you buy new construction, the builder is the seller, and the person you meet in the model home is the builder’s sales agent. Their job is to represent the builder’s interests, help the builder sell inventory at the best possible price and terms, and move contracts smoothly to closing. They’re friendly and helpful, but they don’t work for you.

New construction is also more complicated than many buyers expect, especially if the home isn’t finished yet. You’re dealing with build timelines, construction milestones, change orders, selections, inspections at different stages, and a thick builder contract that’s written by the builder’s lawyers. Consumer and industry articles consistently point out that having your own buyer agent can help you understand the contract language, keep the builder on track, and negotiate more effectively on price, upgrades, and incentives.

Most reputable builders in the Austin area still offer a buyer broker commission or flat fee, which means they’re already budgeting for buyer agent compensation in the price of the home. In other words, you’re usually paying for representation whether you use it or not. Recent reporting on the new commission model notes that builders often pay a set commission to buyer agents to help ensure smooth sales, even as rules around how those fees are disclosed have changed.

From our own experience at Shipman Partners, buyers generally get a better deal and a better overall experience on new builds when they have their own agent. We’ve helped dozens of buyers purchase new construction across the Austin area. We set realistic expectations about build timelines, help anticipate and get in front of delays, and keep you informed about which upgrades tend to add lasting value in our market versus which are mostly cosmetic.

We also see real-world examples of the value of representation. One of our buyers once visited a builder’s model on their own. The sales rep told them that if they didn’t use an agent, she could get them ten thousand dollars in upgrades. When the buyer called us, we asked them to pause, reached out directly to the builder, and negotiated an agreement where the builder still covered our buyer agent fee and increased the upgrade credit to twenty thousand dollars. That extra leverage came from understanding how builders structure their pricing and incentives and how much room they often have to move.

Bottom line: when you buy from a builder, you’re stepping into a highly professional sales environment with contracts, timelines, and big dollars at stake. Having an experienced new construction buyer agent on your side costs you little or nothing in most cases and can pay off in better terms, fewer surprises, and a smoother path from dirt to closing.