Buying A House In Texas: Facts And Tips
Carey Chesney7-Minute Read
March 10, 2021
Thinking about buying a house in Texas? Perhaps deep in the heart of it? Let’s make sure you’re well prepared! While buying a home in Texas is similar to buying most places in the country, there are a few things specific to the Lone Star State to be aware of when finding your next abode. We’ll get into that later, but for now, let’s start with why?
Why Buy A House In Texas?
Texas real estate can be a great investment. Whether you’re searching for your forever home or you’re a first-time home-buyer looking for a starter home or you’re interested in investment rental opportunities, the opportunity for a solid return on investment (ROI) is – like everything in Texas – big!
Searching for Texas real estate is as easy as clicking on that link. Knowing where and what to look for when buying a house in Texas, as well as understanding the process, that’s a little more complicated. Fear not though, we are here to help.
Top 5 Real Estate Cities In Texas
Now that we have covered the “why” of buying in Texas, let’s dive into “where.” The following is a list of the Rocket HomesSM top five real estate cities in Texas. Each city is unique and the decision of where to live is unique to each individual. That said, having a basic understanding of the real estate trends in each of the top five cities in Texas is a good place to start if you’re looking to become a homeowner in Texas.
Serving as the capital of the Longhorn State, Austin is the 11th-most populous city in the United States, with about 979,000 people. Austin residents, known as Austinites, include a diverse mix of government employees, college students, musicians, high-tech workers and blue-collar workers. Home to the University of Texas, Austin features an intellectual vibe mixed with a down-home Texas feel to make up its city culture. Throw into the mix that Austin is also the live music capital of the world, and you can easily see this is a place with a lot to offer.
Links to More Resources on Austin
2. Dallas - Ft. Worth
This north Texas economic powerhouse is primarily based on banking, commerce, insurance, telecommunications, technology, energy, healthcare, medical research, transportation and logistics. Combined with its humid subtropical climate, this makes Dallas-Ft. Worth appealing to the business-conscious resident who enjoys year-round warm weather.
Links to More Resources on Dallas-Ft.Worth
3. San Antonio
Rich in both history and current population growth, San Antonio combines an old-world feel with a new-world pace. San Antonio has grown from being a Spanish mission outpost to the seventh-most populous city in the United States, and the second-most populous city in both Texas and the Southern United States, with more than 1.5 million residents. Attractions for residents to visit abound, with the crown jewels being The Alamo and San Antonio Missions National Historical Park.
Links to More Resources on San Antonio
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, as it has the second-most Fortune 500 headquarters of any U.S. city.
Links to More Resources on Houston
5. Corpus Christi
This south Texas coastal city has a population of more than 326,000, making it the eighth-most populous city in Texas. With the nickname "Sparkling City by the Sea," it’s easy to see why this is considered one of the most beautiful places to live in the state. Corpus Christi combines a big-city feel with that comforting feeling of a waterside retreat to bring a unique and desirable experience to residents and visitors alike.
Links to More Resources on Corpus Christi
Things To Know About Buying A Home In Texas
Like many states, Texas laws make it easy to buy and sell real estate. That said, there are a few regulations and common business practices related to buying a home in Texas that any savvy buyer should be aware of.
Dual Agency Is Not Permitted
Dual agency is the term for when the same real estate agent represents both the buyer and the seller in a real estate transaction. While dual agency is allowed in many states, in Texas, it is not.
30-Day Escrow Is The Norm
Once the terms of a contract between a buyer and seller are fully negotiated and agreed upon, the contract is considered to be fully executed. At this moment, the escrow process begins. The duration until closing can vary greatly depending on the nature of the deal and the state. In Texas, a 30-day escrow is typical, but it can be much shorter or much longer depending on your specific situation.
Seller Disclosure Reports Are Required
In Texas, home sellers are required to submit disclosures on the physical condition of the house. Things like the presence of water damage, fires that have occurred in the house, etc., are all items about the house that the seller must disclose. This is pretty standard in most states across the country as well.
Attorneys Are Not Required
Some states require a lawyer to represent for both the seller and the buyer at closing, but Texas does not. This means there is more responsibility from your agent, lender and title company to ensure you understand all the legal documents you are signing, so be sure to ask questions if there is anything that puzzles you.
Offers Must Be In Writing
All offers to buy real estate in Texas must be submitted in writing. This is a good idea no matter what state you are buying property in – laws or not – but in Texas it’s a must.
Winter Is Often The Cheapest Time To Buy
In Texas, much like most of the country, most people sell in the spring months, and sellers who put their house on the market in the winter are more likely to be doing so out of necessity. Traditionally this means houses sell for a bit less in the winter. That said, 2020 and 2021 have been unique years (on a lot of fronts) and the real estate market has not yet settled back into its pre-pandemic state.
How To Buy A House In Texas
Many requirements to buy a house in Texas are standard and must be adhered to. Let’s dive into a few of the key requirements.
Have Good Credit
A reasonably good credit score is the best place to start when investigating whether or not you are ready to buy a home in Texas. There are low-credit loans, but you'll need a score of at least 620 for most conventional loans. Not quite at 620? No worries, there are a number of easy-to-find resources for learning how to bump up that score as you get ready to buy.
Have A Low Debt-To-Income Ratio
Simply put, this calculation is how much money you owe in relation to how much you make. Lenders want to know you won’t have trouble paying your mortgage, and a good measure is making sure about ⅓ of your income is the amount of your debt, including the new mortgage. This may also be referred to as a 33% debt to income ratio.
Find A REALTOR®
Working with a REALTOR® who’s 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 ensure the process runs smoothly.
Gather Your Financial Documentation
Whether you’re taking out a Federal Housing Administration (FHA) loan or a conventional loan, lenders can't just take your word for it when it comes to approving you for a 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 will need to produce.
Get An Appraisal
Lenders also want to make sure the home they are lending you money for is worth it. Once you have signed a contract to buy a home in Texas, your lender will order an appraisal to assess the value of the house to make sure it is worth at least what you offered for it.
Save For A Down Payment
Most conventional loans will require 20% of the purchase price as a down payment, with the lender covering the other 80% in the form of a mortgage loan. There are other options that require less though, so be sure to discuss all the financial tools available to you with your lender when buying a home in Texas. The state has several assistance programs available got home buyers, including:
- My Choice Texas Home: They provide down payment and closing cost assistance on a 30-year, fixed-rate loan to any home buyer with a credit score of at least 620, but they are subject to requirements such as income limits.
- My First Texas Home: They provide down payment and closing cost assistance on a 30-year, fixed-rate loan to first-time home buyers with a minimum credit score of 620.
- Texas Mortgage Credit Certificate Program: This group provides additional reductions on your federal tax bill for first-time home buyers.
The Bottom Line
Now you can use the information in this article as well as more research on your own to give you the confidence to buy that home in Texas! Are you ready to begin the home buying process? Get preapproved with Rocket Mortgage®.
Viewing 1 - 3 of 3
Buying A House Out Of State: Tips And Strategies
Looking to move out of state and not sure how the home buying process works? Read our article on how to buy a home out of state and other tips to guide you.
Best Places To Live In The US 2021 – 2022: Cities And States Ranked
We’ve identified the best states and cities to live in America for 2021 – 2022. Learn more about how we determined the best places to live in the U.S. here.