Buying House in Texas
a Step-by-step
guide

Search for your dream home

How Buying House in Texas Works

Buying house in Texas is a critical decision that comes with a big challenge. There are lots of moving parts in the process and many things to consider. This guide is to help home buyers understand how buying house in Texas works. It will help them navigate the process and know the required items to expect and when to expect them. The process is as listed below. This is a short version of the guide. A full version in a 13-page, free e-book, is available upon request.

Photo of buying home in Texas

1. Determine Your Housing Needs and Where to Live

Once you decide to buy a house, the first step is to determine your housing needs and the area you want to live in. If buying house for the family, the needs of the entire family should be considered. Therefore, determine and decide on the above issues before making offers.

2. Choose a mortgage lender

Before you start searching for house, you will first choose a mortgage lender. The lender will evaluate your situation and determine the type of loan and the amount you qualify for. So, this step is important because it will determine whether you will move forward or not. Below are the items lenders will likely verify:

income & employment

They will verify your income, employment, and other sources of income you may have. If you work, provide copies of your W2, paystub, tax return, etc. If you are self-employed, they may ask for your company profit & loss statement.

debt and monthly bills

Provide a list of bills you pay monthly, including car payments. This is because they will analyze your income and debt to determine your affordability for mortgage loan. Your chances of getting approval will be lower if your monthly household payment is greater than your monthly income. 

Down Payment Funds

The lender will likely verify that you have enough money for down payment. Down payment for buying a house ranges from 0% – 20% of the purchase price. The more money you put down, the lower your monthly payment, and your chances for loan approval will be higher.

3. Get your numbers in writing

When you decide on a lender, get your numbers in writing, including interest rate, processing fees, loan origination fee, etc. If the lender is unable to give these numbers in writing, find another lender.

4. Get Pre-Approval Letter

Once you are approved for loan for buying house in Texas, ask your lender for pre-approval letter. This letter shows the approval amount or the price range of the house you qualify for. Pre-approval letter is important because it confirms to your agent and home seller that you are a serious buyer. Therefore, you need pre-approval letter, not pre-qualification letter.

Pre-Approval letter vs Pre-Qualification letter

There is a big difference between a pre-approval letter and pre-qualification letter.
Pre-approval letter shows that you are approved for loan and possibly the price range of house approved. On the other hand, pre-qualification letter is just a basic and quick assessment of your financial situation. It carries no weight. Sellers don’t value it as much as pre-approval letter. So, now that you know the difference, go ahead and get your pre-approval letter ready.

5. Find a Realtor

By now, you must have determined the area you want to live in, and have chosen your mortgage lender. The next thing is to find a Realtor to represent you in the transactions, and also advise and guide you. You will sign a buyer representation agreement, authorizing the realtor to work on your behalf in buying the house.

6. Get Your Initial Cost Funds Ready

Initial costs are the expense associated with buying a house other than down payment.
Buyer needs to make sure that funds for the initial costs are available. Below are some of the initial cost components buyer needs to expect and be ready for. 

a. Home Inspection Fee
b. Home Appraisal Fee
c. Closing Costs
d. Property Tax
e. Homeowner Insurance
f. Home Owners Association Fees
g. Buyer Moving Costs
h. Residential Service Contract
i. Property Survey
j. Earnest Money and Option fee

7. Begin Search for your new home

Now that you have all the preliminaries taken care of, you and your Realtor will schedule home showing. However, the scheduling will depend on your agent’s policy and the seller’s instructions. See the e-book for more information and tips on house hunting.

8. Making Offers

If you have made it this far, congratulations! You have done most of the heavy lifting. This time, you are going to make an offer to purchase the house you like. See the e-book for some of the components of the contract to pay particular attention to when making an offer. 

9. Submitting your offer

Once you and your agent agree on the offer you are happy with, you will sign the contract. Your agent gathers the contract and necessary documents, including the pre-approval letter, and submits them to seller agent. Seller agent then submits the offer to the seller. 

After reviewing the offer, seller has three options. First option is to accept the offer. Second option is to reject the offer. Third option is to counter the offer. If seller accepts and signs the offer, it becomes a contract. If they reject the offer, the contract becomes void and the process ends. If seller counters the offer, you may choose to accept and sign the counter offer or respond with your own counter offer. When you and seller agree and sign the contract, you will both be bound in the contract.

The contract and supporting documents are now sent to the Title Company for closing. You or your agent also submits your earnest money and options fee to the escrow officer. You will now be waiting for closing.

10. Home Appraisal, if required

When buying house in Texas, appraisal is usually required by lenders when loan is involved. If the appraised value of the house is lower than the purchase price, lenders will not approve the loan. They will require the purchase price to be lowered to below or equal to the appraised value. If the seller declines to lower the price, buyer may choose to pay the difference in cash. Otherwise, buyer can terminate the contract. If the appraisal is adequate or lender allows the buyer to pay the difference, the process moves forward.

11. Home Inspection, if required

Just like for appraisal, when buying house in Texas, home inspection is required if mortgage loan is involved. The purpose of the appraisal is to evaluate the home to enable the buyer make informed decision on the purchase. After the inspection, the inspector reports his findings, including items that need repairs.

12. Final Walk-Through Before Closing

Now, you are very close to completing the process of buying house. The next step is to conduct a final walk through of the house. This is done before signing the closing documents. See e-book for details

13. Final Step of buying house - Closing

This is the last step in the buying house process. Seller turns in the house keys to the escrow officer. Both buyer and seller sign the required documents. Escrow officer gives buyer the house keys. Purchase is now complete. Congratulations on your new home!

Buying House Guide in a Flow Chart

This guide is also available in a condensed process flow chart, for easy glance. To get your copy, click the buying house in Texas guide.

Summary

Step-by-step process of buying home in Texas is discussed. As stated earlier, a full or expanded version of this guide is available in a FREE 13-page E-Book. It is packed with more detailed information. To get your copy, provide your email below and we will email it to you.

Buying home in Texas guide - from preparation to closing

e-book buying a house in Texas

Get our FREE 13-page e-book that gives a road map of home buying process in Texas, from preparation to closing. In this e-book, you will learn about: 

  • Becoming ready to buy a house.
  • Choosing a mortgage lender
  • Getting Pre-approval for mortgage loan
  • Searching for home.
  • Making offers
  • And more

Request your free copy using the form below. We’ll email it to you.

Work with us

Your friendly Real Estate Agent and Realtor.

When it comes to buying a house, I’ll help guide you in the right direction.

One of my duties as a Realtor is to guide and advise home buyers and sellers. 

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