How Closing Costs Work on Inventory Homes 

Buying a home isn’t just about the down payment and monthly mortgage. Closing costs—the fees and expenses paid at the end of a real estate transaction—are a critical part of the budget that catches many buyers off guard. For buyers in San Antonio and surrounding areas like Boerne, Schertz, Cibolo, Helotes, and New Braunfels, closing costs can total $6,000–$15,000 or more depending on the home’s price.

Here’s the good news: With move-in ready homes (also called inventory or quick-close homes), builders often step in to make these costs significantly more manageable. By offering credits or covering certain expenses, builders create opportunities for buyers to move in with substantially less money out of pocket.

For PCS families relocating to Joint Base San Antonio (JBSA), first-time buyers, or renters whose leases are ending, this financial relief can be the difference between renting another year and achieving homeownership.

This comprehensive guide explains how closing costs work, what builders typically cover in 2025, and how buyers can strategically maximize these incentives when purchasing a move-in ready home.

What Are Closing Costs? A Complete Breakdown

Closing costs are the collection of fees and expenses paid to finalize a real estate transaction. They typically range from 2% to 5% of the purchase price—though this percentage can vary based on loan type, location, and specific circumstances.

Typical Closing Cost Range by Home Price (San Antonio, 2025)

Common Components of Closing Costs

1. Loan-Related Fees:

• Loan origination fees: 0.5%-1% of loan amount charged by lenders for processing
• Discount points: Optional fees to reduce interest rate (each point = 1% of loan)
• Underwriting fees: $300-$500 for loan approval process
• Credit report: $25-$75 for pulling credit history

2. Title and Escrow:

• Title insurance: Protects against ownership disputes ($500-$2,000+)
• Title search: Verification of clean title ($150-$400)
• Escrow/settlement fees: Title company services ($400-$800)
• Recording fees: County charges to record deed ($50-$250)

3. Property-Related Expenses:

• Appraisal fee: $400-$600 to verify home value
• Home inspection: $300-$500 (optional but recommended)
• Survey: $350-$600 to verify property boundaries
• Pest inspection: $75-$150 (often required for VA/FHA loans)

4. Prepaid Expenses:

• Homeowners insurance: First year premium ($1,200-$2,000)
• Property taxes: Prorated amount to cover remainder of tax year
• HOA fees: Prorated if applicable
• Prepaid interest: Interest from closing until first payment

5. VA Loan Specific (if applicable):

• VA funding fee: 0%-3.3% of loan amount (varies by service status, down payment)
• Note: VA loans prohibit certain fees, potentially reducing overall costs

How Builders Help With Closing Costs in 2025

San Antonio builders are offering some of the most competitive closing cost incentives in recent memory. Here’s how they structure assistance:

1. Lump-Sum Closing Cost Credits

Many builders in San Antonio currently offer $5,000–$15,000 in direct credits toward closing costs on inventory homes, with premium homes sometimes exceeding $20,000.

Current 2025 Examples:

• M/I Homes: Up to $10,000 toward closing costs on select homes
• Taylor Morrison: Up to $12,000 toward closing costs
• Perry Homes: Up to $15,000 in flex dollars
• Empire Communities: Zero closing costs on select homes (limited time)

These credits can be applied to virtually any closing cost, dramatically reducing out-of-pocket expenses.

2. Preferred Lender Incentives

Builders often tie closing cost assistance to using their affiliated mortgage company. While this requirement exists, the total package frequently saves buyers money compared to outside lenders—but always compare.

Benefits of Builder-Preferred Lenders:

• Streamlined approval process (builder familiarity)
• Coordination of construction timelines
• Access to builder-exclusive rate buydowns
• Enhanced closing cost assistance

Important: Get quotes from at least 2-3 lenders, including the builder’s preferred lender AND outside mortgage companies. Compare:

• Interest rates
• Closing cost assistance
• Total loan costs over 30 years
• Flexibility and service quality

3. Interest Rate Buydowns

Many builders offer temporary or permanent rate buydowns that can be more valuable than closing cost credits.

Common Buydown Structures:

2-1 Buydown: Interest rate reduced by 2% in year one, 1% in year two, then full rate

• Example: 7% rate becomes 5% year one, 6% year two, 7% thereafter
• Typical cost: $5,000-$8,000 (builder pays)

3-2-1 Buydown: Even more aggressive first three years

• Example: 7% becomes 4% / 5% / 6% / 7%
• Current M/I Homes offer includes rates as low as 1.875% first year with buydown

Permanent Buydown: Reduces rate for entire 30-year term

• Typically 0.25%-0.75% reduction
• Can save tens of thousands over loan life

4. Prepaid Expenses Coverage

Some builders cover:

• First year of homeowners insurance ($1,200-$2,000 value)
• Prepaid property taxes
• First year HOA dues ($300-$2,000+ value)
• Initial escrow deposits

5. Free Upgrades and Structural Options

Instead of (or in addition to) cash credits, builders may offer:

• Design center credits: $5,000-$20,000 toward upgrades
• Structural additions: Extended patios, extra bedrooms
• Premium features: Granite counters, upgraded flooring, appliance packages
• Smart home packages: Security systems, automated systems

Why Builders Offer These Incentives: The Economics

For builders, unsold inventory represents carrying costs that accumulate daily:

• Mortgage interest on construction loans
• Property taxes on completed homes
• Insurance and maintenance costs
• Opportunity cost of tied-up capital
• Quarterly sales goals and investor expectations

By offering $10,000-$15,000 in closing cost assistance, a builder might:

• Sell a home 60-90 days faster
• Save $3,000-$5,000 in carrying costs
• Hit sales targets that affect bonuses and stock prices
• Clear inventory for next phase

Result: Win-win situation where builder reduces costs AND buyer saves thousands.

When Incentives Are Strongest

Quarter-End Push (March 31, June 30, September 30, December 31):

• Builders scrambling to hit sales targets
• Incentives often increase 20-50%
• Most negotiating leverage

Year-End (November-December):

• Strongest incentive period annually
• Clearing inventory before new year
• Tax advantages for builders

Community Closeout:

• Last few homes in a phase
• Builder wants to move to next project
• Sometimes exceptional deals

Market Slowdowns:

• When sales pace slows
• Interest rates spike
• Inventory accumulates

Real-World San Antonio Examples (2025)

Example 1: Cibolo Military Family

Situation: Active-duty couple PCSing to JBSA-Randolph
Home Price: $325,000
Loan Type: VA (100% financing)
Builder Incentive: $12,000 closing cost credit (using preferred lender)

Closing Cost Breakdown:

• VA funding fee (waived for disabled veterans): $8,125
• Title/escrow/recording: $2,100
• Appraisal/survey: $950
• Prepaid taxes/insurance: $2,400
• Misc fees: $425
• Total closing costs: $14,000
• Builder credit: -$12,000
• Out-of-pocket: $2,000

Result: Family purchased $325,000 home with $2,000 total cash needed at closing.

Example 2: Boerne First-Time Buyer

Situation: Young professional, first home purchase
Home Price: $295,000
Down Payment: 5% ($14,750)
Loan Type: Conventional
Builder Incentive: $10,000 credit + 2-1 rate buydown

Benefits:

• Year 1 payment: $1,420/month (at reduced rate)
• Year 3+ payment: $1,680/month (full rate)
• Closing cost credit: $10,000
• Total first-year savings: $3,120 (lower payments) + $10,000 (credit) = $13,120

Result: Buyer eased into homeownership with lower initial payments.

Example 3: New Braunfels Investor

Situation: Investment property purchase
Home Price: $280,000
Down Payment: 20% ($56,000)
Builder Incentive: $7,500 closing costs + first year HOA dues ($1,800)

Outcome:

• Reduced closing cash by $9,300
• Immediate rental ready (move-in condition)
• Faster ROI timeline

Example 4: Helotes Empty Nesters

Situation: Downsizing from large home
Home Price: $415,000
Builder Incentive: $15,000 flex dollars

How They Used It:

• $8,000 toward closing costs
• $7,000 in design center upgrades (luxury vinyl plank, quartz)
• Customized home without increasing loan amount

VA Buyers: Stacking Benefits for Maximum Savings

VA loan buyers can achieve extraordinary value by combining VA benefits with builder incentives:

VA Loan Advantages:

• Zero down payment required
• No PMI (private mortgage insurance)
• Competitive interest rates (often 0.25%-0.5% below conventional)
• Limited closing costs (VA prohibits certain junk fees)
• Assumable loans (transferable to next buyer)

Plus Builder Incentives:

• $5,000-$15,000 closing cost credits
• Rate buydowns
• Free upgrades

Real Example:

$300,000 Home Purchase:

• Down payment: $0 (VA benefit)
• Builder closing cost credit: $12,000
• Closing costs after credit: ~$3,000-$5,000
• Total cash needed: $3,000-$5,000 for a $300,000 home

Compare to conventional with 10% down:

• Down payment: $30,000
• Closing costs: $10,500
• Total cash needed: $40,500

Difference: $35,000-$37,500 less for VA buyers

Tips for Maximizing Builder Closing Cost Incentives

1. Get Pre-Approved Early (Before Shopping)

Having financing ready positions you to:

• Take advantage of time-sensitive offers
• Negotiate from strength
• Close quickly on inventory homes
• Demonstrate seriousness to builders

Action: Get pre-approved with both builder’s lender and 1-2 outside lenders.

2. Compare Total Loan Costs, Not Just Closing Credits

Example Comparison:

Builder’s Lender:

• Interest rate: 7.00%
• Closing cost credit: $12,000
• 30-year interest: $418,527

Outside Lender:

• Interest rate: 6.75%
• Closing cost credit: $3,000
• 30-year interest: $395,731

Analysis: Despite $9,000 less in credits, outside lender saves $22,800 in interest over 30 years.

Lesson: Run full 30-year amortization comparisons.

3. Ask About “Stacking” Multiple Incentives

Some builders allow combining:

• Closing cost credits
• Rate buydowns
• Free upgrades
• Lot premium waivers

Question to ask: “Can I combine the $10,000 closing credit with the granite upgrade package?”

4. Shop Multiple Communities and Builders

Incentives vary dramatically:

• Builder A: $8,000 credits
• Builder B: $15,000 credits on similar home

Action: Tour 4-5 builders before deciding.

5. Use an Experienced Realtor®

Tami Price and experienced Realtors® provide:

• Knowledge of which builders negotiate most
• Awareness of unadvertised incentives
• Negotiation expertise to increase offers
• Comparison of total value across builders
• Protection of your interests (sales reps work for builder)

Important: Introduce your Realtor® on FIRST visit to builder—otherwise they cannot represent you.

6. Time Your Purchase Strategically

Best Timing:

• Last week of quarters (March, June, September, December)
• November-December (year-end)
• When inventory has sat 90+ days
• During market slowdowns

7. Negotiate Everything

Even “advertised” incentives are often negotiable:

• Request additional $2,000-$5,000 in credits
• Ask for upgraded lot at standard price
• Negotiate free fence, sprinkler system, window treatments
• Request additional design center credits

Phrase: “I love this home. If you can add $3,000 more in closing credits, I’m ready to write a contract today.”

8. Understand Your Closing Cost Needs

Calculate your specific closing costs:

• Use online calculators
• Get Loan Estimate from lenders
• Plan for 3.5%-4% of purchase price

This tells you how much credit you actually need.

Why PCS Buyers Benefit Most from Closing Cost Assistance

Military families relocating to JBSA face unique financial pressures:

PCS-Related Expenses:

• Moving costs (if not fully covered)
• Temporary lodging before closing
• Household goods shipping gaps
• Travel expenses for house hunting
• Deposits (utilities, etc.)
• Immediate needs (furniture, repairs)

Total PCS costs: Often $5,000-$15,000 out-of-pocket

How Builder Credits Help:

Scenario: PCS family buying $310,000 home

Without Builder Credits:

• Closing costs: $10,850
• Moving expenses: $6,000
• Temporary housing: $3,000
• Total cash needed: $19,850

With $12,000 Builder Credit:

• Closing costs: $10,850
• Builder credit: -$12,000
• Net closing cost: $0 (actually $1,150 refund to buyer!)
• Moving expenses: $6,000
• Temporary housing: $3,000
• Total cash needed: $7,850

Savings: $12,000 directly improves PCS transition affordability

Frequently Asked Questions

Q: How much can builders typically cover in San Antonio?

A: In 2025, builder incentives typically range from $5,000 to $15,000, with some promotions exceeding $20,000 on premium homes. M/I Homes offers up to $10,000, Taylor Morrison up to $12,000, and Perry Homes up to $15,000 in flex dollars.

Q: Do I have to use the builder’s lender to get closing cost assistance?

A: Often yes, but not always. Most significant incentives require using the builder’s preferred lender. However, always compare the total package including interest rates with outside lenders to ensure you’re getting the best overall deal.

Q: Can VA buyers benefit from builder closing cost incentives?

A: Absolutely! VA buyers get a double benefit: zero down payment from VA + builder closing cost credits. This combination often results in needing only $2,000-$5,000 total cash to close on a $300,000+ home.

Q: Do closing cost credits reduce the home’s sales price?

A: No. Closing cost credits apply to transaction fees, not the purchase price. This means:

• Home still appraises at full value
• Neighborhood comps aren’t affected
• Your equity position is the same
• Resale value is protected

Q: Are closing cost incentives negotiable?

A: Yes! Builders may increase credits if:

• The home has been on market 90+ days
• You’re closing near quarter-end or year-end
• You’re a cash buyer or pre-approved
• You’re flexible on closing timeline
• You agree to use preferred lender

Q: What’s better: closing cost credits or rate buydowns?

A: It depends on your situation:

Choose closing costs if:

• You’re cash-strapped for closing
• Planning to sell within 5-7 years
• Want maximum immediate savings

Choose rate buydown if:

• You have closing cost cash available
• Planning to stay 10+ years
• Want lower monthly payments long-term

Best: Sometimes you can get both!

Q: Can first-time buyers stack city programs with builder incentives?

A: Yes! San Antonio’s HIP programs (providing $1,000-$30,000 in down payment assistance) can be combined with builder incentives for maximum affordability.

The Bottom Line: Thousands in Savings Available

Closing costs add $6,000-$15,000+ to home purchases, but with move-in ready homes in San Antonio, builders often help reduce or even eliminate these expenses. From lump-sum credits to prepaid taxes and insurance, these incentives make homeownership significantly more accessible for buyers across San Antonio, Boerne, Schertz, Cibolo, Helotes, and New Braunfels.

For PCS buyers relocating to JBSA, first-time homeowners, or anyone making a quick move, builder-paid closing costs can be a genuine game-changer—potentially saving $10,000-$15,000 in immediate out-of-pocket expenses.

Key Strategies:

1. Get pre-approved with multiple lenders
2. Shop multiple builders and communities
3. Compare total 30-year loan costs
4. Time purchases for quarter/year-end
5. Work with experienced Realtor® who knows builder negotiations
6. Understand your specific closing cost needs
7. Ask about stacking multiple incentives

Ready to Explore Move-In Ready Homes with Maximum Incentives?

Contact Tami Price, REALTOR® & New Construction Specialist:

Phone: 210-620-6681

Website: www.tamiprice.com

Email: tami@tamiprice.com

Tami knows which San Antonio builders offer the best incentives, how to negotiate maximum credits, and how to structure deals for lowest out-of-pocket costs. Let her expertise save you thousands.

Disclaimer

All information provided is for educational purposes and should not be considered financial advice. Builder incentives vary by community, timing, and availability. Always verify current offers with builders and compare all financing options. Information current as of November 2025.