Buying A House In Texas: Facts And Tips

Author:

Carey Chesney

Sep 4, 2024

6-minute read

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Thinking about buying a house in Texas? Perhaps deep in the heart of it? Let’s make sure you’re well prepared. Buying a home in Texas is like buying a home in most places around the country. But there are a few things to consider that are specific to the Lone Star State when purchasing your new abode.

Why Buy A House In Texas?

Texas real estate can be a great investment. According to the latest U.S. Census data, the median value of Texas homes jumped nearly 17% between 2021 and 2022. Whether you're a first-time or seasoned home buyer or a real estate investor, the potential for a solid return on investment in Texas is like everything else in the state – big!

Top 5 Real Estate Cities In Texas

We’ve listed the top five real estate cities in Texas, according to Rocket Homes℠. Each city is unique, and so is the decision of where to live for each individual.

That said, if you’re looking to become a homeowner in Texas, a good place to start would be to gain a basic understanding of real estate trends in popular Texas cities.

1. Austin

Serving as the capital of the Longhorn State, Austin is the 10th most populated city in the United States, with about 975,000 people. Austin residents, known as Austinites, include a diverse mix of government employees, college students, musicians, high-tech and blue-collar workers. Austin also bills itself as the live music capital of the world. In short, Austin has a lot to offer.

Austin Real Estate Listings

2. Dallas-Ft. Worth

This north Texas economic powerhouse is fueled by banking, commerce, insurance, telecommunications, technology, energy, health care, medical research, transportation and logistics. Combined with its humid, subtropical climate, Dallas-Fort Worth appeals to business-conscious residents who enjoy year-round warm weather.

Dallas-Fort Worth Real Estate Listings

3. San Antonio

Rich in history and growing fast, San Antonio combines an old-world feel with a new-world pace. San Antonio has grown from a small Spanish mission outpost to the seventh most populated city in the U.S. and the second most populated city in the South, after Houston. The city’s 1.4 million residents can enjoy many attractions, including the crown jewels: The Alamo and San Antonio Missions National Historical Park.

San Antonio Real Estate Listings

4. Houston

Everything is bigger in Texas. And no city is bigger than Houston, with a population of more than 2.3 million.

Houston has long been known for energy, manufacturing, aeronautics and transportation, but it’s also a global leader in the health care sector. Business is king in Houston, with the second most Fortune 500 headquarters of any U.S. city.

Houston Real Estate Listings

5. Corpus Christi

This south Texas coastal city has a population of more than 316,000, making it the eighth most populated city in Texas.

With the nickname “Sparkling City by the Sea,” it’s easy to see why Corpus Christi is considered one of the most beautiful places to live in the state. Corpus Christi combines a big city feel with the serenity of a waterside retreat. The result is a unique and desirable experience for residents and visitors.

Corpus Christi Real Estate Listings

Things To Know About Buying A Home In Texas

Like many states, buying and selling real estate is relatively straightforward in Texas. However, savvy home buyers should get familiar with some regulations and business practices specific to Texas.

Dual Agency Isn’t Permitted

Dual agency is when one real estate agent represents the buyer and the seller in the same real estate transaction. While dual agency is allowed in many states, it’s not in Texas.

30-Day Escrow Is The Norm

A purchase contract is considered fully executed once a buyer and seller negotiate and agree on the contract’s terms. At this point, the escrow process begins. The duration of escrow until closing can vary depending on the complexities of the deal and the state. In Texas, escrow typically lasts 30 days, which can be much shorter or longer, depending on your specific situation.

Seller Disclosure Reports Are Required

In Texas, home sellers must submit disclosures outlining their knowledge of a house’s physical condition. Issues like water damage, fires in the house, etc., are all matters sellers must disclose. Seller Disclosures are pretty standard in most states across the country.

Attorneys Aren’t Required

Some states require a lawyer to represent the seller and the buyer at closing, but Texas doesn’t. Your agent, lender and title company are primarily responsible for ensuring you understand all the legal documents. Feel free to ask questions if there is anything you don’t understand.

Offers Must Be In Writing

All offers to buy real estate in Texas must be submitted in writing. Regardless of the law, putting everything in writing is a good idea no matter which state you want to purchase property in. But in Texas, it’s a must.

Winter Is Often The Cheapest Time To Buy

As you’ll typically find in most of the country, most homeowners in Texas sell during the spring, and sellers who put their house on the market in the winter often do it out of necessity. Traditionally, this means houses sell for a bit less during the winter.

No State Property Tax

Texas doesn’t have a state property tax. Instead, local governments and counties set rates and collect property taxes, giving them the authority to determine property values. With 254 counties in Texas, you should expect property tax rates to vary significantly across the state.

How To Buy A House In Texas

Buying a house in Texas is similar to buying a home in other states. Let’s dive into a few key requirements of the home buying process.

1. Have Good Credit

A reasonably good credit score is the best place to start when determining whether you’re ready to buy a home in Texas. You'll need a score of at least 620 for most conventional loans, though you can find loans with lower credit score requirements. Not quite at 620? You can use several easy-to-find resources to learn how to bump up that score as you prepare to buy a home.

2. Have A Low Debt-To-Income Ratio

Debt-to-income ratio (DTI) calculates how much money you owe versus how much you make in a month. Lenders want to know you won’t have trouble paying your mortgage. Most lenders prefer your DTI ratio of 36% or less.

3. Find A REALTOR®

Working with a REALTOR® familiar with Texas real estate can help you find potential homes more easily. Plus, once you’re ready to submit an offer, a REALTOR® will prepare the paperwork for you and help ensure the process runs smoothly.

4. Gather Your Financial Documentation

Whether you’re taking out a Federal Housing Administration (FHA) or conventional loan, lenders need proof that you can repay the loan to buy a house in Texas. Pay stubs, tax records, credit reports and debt documentation are just a few of the financial documents you’ll need for your home loan application.

5. Get An Appraisal And Home Inspection

Lenders also want to ensure they don’t let you borrow more money than the home is worth. Once you’ve signed a contract to buy a home in Texas, your lender will order an appraisal to assess the home’s value and confirm that it’s worth at least what you offered to pay for it.

You should also schedule a home inspection to learn more about the property’s physical condition and identify potential defects, damage or repairs.

6. Save For A Down Payment

Most conventional loans require a down payment of at least 20% of a home’s purchase price to avoid private mortgage insurance (PMI). The lender covers the other 80% with a mortgage loan. However, you can find other loan options that require smaller down payments. Be sure to talk to your lender about the loans you’re eligible for to help you buy a home in Texas.

The state offers several assistance and home loan programs, including:

  • My Choice Texas Home: This program provides down payment and closing cost assistance on a 30-year, fixed-rate loan to home buyers with at least a 620 credit score. Home buyers must meet the program’s income limits and other requirements.
  • My First Texas Home: This program also offers down payment and closing cost assistance on a 30-year, fixed-rate loan. First-time home buyers and veterans with a minimum 620 credit score are eligible.
  • Texas Mortgage Credit Certificate Program: First-time home buyers can receive additional reductions on their federal tax bill through this program.

The Bottom Line

Buying a house in Texas can be a savvy decision for many reasons. From its affordable cost of living to ample job opportunities and warmer climate, Texas has something for everyone.

Because buying a house is a major decision, you should take your time to research, weigh your financial situation and consider your long-term plans and lifestyle preferences.

Are you ready to find your dream home in the Lone Star State? Begin your house hunt and connect with one of our Verified Partner Agents.

Portrait of Carey Chesney.

Carey Chesney

Carey Chesney is a Realtor® and freelance writer that brings a wealth of experience as a former Marketing Executive in the fields of Health Care, Finance and Wellness. Carey received his Bachelor's in English at University of Wisconsin-Madison and his Masters in Integrated Marketing & Communications at Eastern Michigan University.

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