How to Buy a House in Texas: Everything You Need to Know

The Lone Star State consistently ranks among the top three states for population growth—and for good reason, as there are many compelling reasons to move to Texas.

Whether you’re already a resident, planning your move, or buying a house in Texas from out-of-state, preparation and planning are key to securing your dream home. In this guide, we’ll explain everything you need to know about how to buy a house in Texas so you can navigate the local real estate market and begin house-hunting with confidence.

Things to know before buying a house in Texas

Before diving head first into the process of buying a house in Texas, there are a few crucial factors you must familiarize yourself with:

Property taxes: Texas ranks sixth-highest for property taxes nationwide, so you’ll need to consider how this will impact your monthly mortgage payment.
Homeowners insurance: Costs can vary significantly based on location, especially in areas prone to natural disasters like flooding and tornados.
Market conditions: Texas housing prices vary considerably by city, so you’ll need to monitor the latest trends and market shifts carefully.
Home inspection requirements: The Lone Star State has strict inspection protocols set by the Texas Real Estate Commission (TREC).
HOA regulations: Many communities have homeowners associations with specific rules and fees that you’ll need to understand before buying a house in Texas.
Legal procedures: The home-buying process in Texas is regulated by unique laws, such as the Real Estate License Act, the Inspector Act, and the Timeshare Act. So, consulting a real estate attorney is essential.
Utilities and energy: Texas has a deregulated energy market, so how electricity pricing works here is different than in many other states.
Climate considerations: The seasons in Texas can be extreme, so it’s essential you choose a location with summer weather and winter conditions that meet your expectations and lifestyle requirements.
Title insurance: Most mortgage lenders and loan programs will only support a purchase if you buy a title insurance policy.
Minimum credit score: To buy a home in Texas, most lenders typically require a credit score of at least 620 or higher.

By carefully weighing these considerations along with the various other pros and cons of moving to Texas, you can plan and budget more efficiently.

10 steps to buying a house in Texas

Now you’re familiar with the background information, it’s time to work through each stage of the process in steps. To buy a house in Texas with minimal stress, we recommend the following strategy.

1. Assess your finances

Developing a solid understanding of your financial situation is essential before buying property in Texas. In addition to accessing your credit report, you’ll need to gather other relevant documents to apply for a mortgage loan or down payment assistance. Examples include proof of gross monthly income, bank statements, W-2 forms, and your tax returns.

2. Get pre-approved for a mortgage

Securing a mortgage pre-approval letter is an essential aspect of the home-buying process because it shows sellers that you’re a serious contender. It pays to shop around and compare interest rates from multiple lenders to get the best deal. You’ll also need to plan ahead, as it typically takes seven to sixty days for any mortgage lender to review your income, employment history, and credit score to assess your debt-to-income ratio.

3. Find a real estate agent

Contracting a knowledgeable local real estate agent is essential for navigating the complexities of buying a house in Texas. Non-residents, in particular, will benefit from the experience of tenured agents who can provide valuable insights into neighborhoods, pricing, and potential issues. Due to recent changes in state legislation, buyers must pay their own agent commission, which is typically around 2.87% of the property value.

4. Begin house hunting

With your finances in order and an agent by your side, it’s time to start looking for your new home. Presumably, you’ll already have researched the broad options, such as moving to Dallas or relocating to Houston. You’ve likely also considered a list of the safest cities and the best cities for families. Now it’s time to fine-tune the details by exploring neighborhoods across Texas that fit your lifestyle and budget.

5. Make an offer

Once you find a home you love, work with your agent to submit a competitive offer. Factors to consider include:

The home’s condition
How long it has been on the market
Current market trends

Remember that in a seller’s market (where demand outpaces supply), you may need to offer more than the asking price.

6. Get a home inspection

Texas laws require sellers to disclose any known issues; however, an independent inspection may still prove invaluable in uncovering hidden problems, such as structural damage or pest infestations before buying a house. Texas home inspections cost between $200 and $500 on average—a small price to pay for peace of mind.

7. Review and finalize the contract

If any issues are discovered, you can ask the seller to fix them or negotiate a lower price before settling on a closing date. The best real estate agents will help you navigate these discussions, ensuring that all contingencies are included in your contract to protect you from unforeseen issues in the closing process.

8. Secure homeowners insurance

Obtaining homeowners insurance is one of the mandatory requirements to buy a house in Texas if you’re purchasing through a mortgage lender. Prices vary based on factors like location and the home’s value. However, the average cost of annual home insurance in Texas is around $4,400. This is over double the national average of $1,915. So, it pays to shop around for policies that offer the best coverage for your needs.

9. Close on your new home

To finalize the sale, you’ll need to sign all the necessary documentation and pay closing costs, which are usually around 2-5% of the purchase price. Closing costs typically include:

Appraisal fees
Lender fees
Attorney fees
Transfer tax
Title and escrow charges

Reviewing the closing disclosure form carefully is essential to avoid any unexpected charges.

10. Move in and settle

After closing, it’s time to move into your new Texas home! This is the exciting part, where you get to pick out fixtures, flooring, furnishings, etc. To ensure a smooth transition, you’ll also need to set up utilities, including water, gas, and electricity. Remember that Texas has a deregulated energy market, so it’s always worth exploring your options thoroughly to find the best plan.

What do you need to buy a house in Texas?

With the nuts and bolts of how to buy a home in Texas covered, let’s get you up to speed with a checklist of what you’ll need before you get started:

Good credit score: Higher credit scores usually equate to better interest rates.
Minimum down payment: For Federal Housing Association (FHA) loans, the minimum down payment is usually at least 3.5%.
Pre-approval letter: This essential document outlines the amount you are eligible to borrow based on your unique financial profile.
Steady income: Most lenders look for at least two years of steady income in the same field.
Savings for closing costs: Being prepared with a savings buffer prevents last-minute financial stress.
Homeowners insurance: This is essential for buying a home in Texas if you need to secure a mortgage.
Identification and documentation: Valid ID, Social Security number, and other financial documents like pay stubs and bank statements.

Understanding these requirements helps prepare you for the financial commitment involved in buying a house and empowers you to approach lenders with confidence.

Financial assistance and programs

Here’s a comprehensive list of the various government-backed loans and payment assistance programs available to eligible homebuyers:

The Texas State Affordable Housing Corporation (TSAHC) offers down payment assistance programs and mortgage credit certificates.
The Texas Homebuyer Program provides competitive mortgage interest rates and helps with down payment requirements for first-time and repeat buyers purchasing in targeted areas.
The Texas Department of Housing and Community Affairs (TDHCA) provides first-time homebuyers with low-interest home loan assistance.
My First Texas Home program offers low-interest-rate mortgage loans to veterans and first-time home buyers.
The Home Sweet Texas Home Loan Program provides home loans and down payment assistance to moderate-income families who want to buy a house.
The Good Neighbor Next Door Program offers up to 50% discounts on listings in “revitalization areas” for teachers, police officers, firefighters, and EMTs.
Various Federal programs help eligible buyers secure FHA loans, VA loans, USDA loans, etc.

These financial assistance programs are designed to make homeownership more accessible. Researching and applying for these programs early in your journey can provide significant advantages and open doors to opportunities you may not have thought possible.

Save on electricity plans with BKVE

We hope you’ve found our information and resources about how to buy a house in Texas helpful in your research and planning. As you embark on your exciting homeownership journey, don’t forget to consider ongoing living expenses like utilities.

At BKVE, we offer a variety of Texas electricity plans tailored to fit your needs and budget. Whether you prioritize competitive pricing, renewable energy options, or flexible payment plans, we have something for everyone.

Enter your zip code today to compare your options and find your plan.

Written by Graham Lumley

Graham Lumley, Digital Marketing Manager at BKV Energy, leads digital and traditional marketing strategies, focusing on educating Texans about the state's deregulated energy market. With over 8 years of marketing experience, he creates content to help consumers understand and save on their energy bills, bringing a fresh and dynamic approach to the industry.