Home Buying Guide: Everything You Need to Know

The Texas Homebuying Timeline: What to Expect Start to Finish

Most Texas home purchases take 45–75 days from accepted offer to closing. The timeline has three phases — pre-approval and search, contract to inspection/appraisal, and final underwriting to close — each with its own dependencies and decision points. Understanding the full sequence before you start prevents the most common buyer mistakes: falling in love with a home before knowing what you can afford, waiving inspections under competitive pressure without understanding the risks, and discovering financing problems a week before closing.

Step 1: Pre-Approval Before You Search

Pre-approval is not optional in the Texas market — it’s a prerequisite for competitive offers. Most Texas listing agents won’t present an offer to their seller without a lender’s pre-approval letter, and in multiple-offer situations, a strong pre-approval letter can differentiate you from otherwise equal offers. Pre-qualification (a lender’s unverified estimate based on self-reported information) is not the same as pre-approval and is treated accordingly by sellers.

For a genuine pre-approval: the lender verifies your identity, pulls a hard credit inquiry (temporarily reduces your score by 3–5 points), reviews your W-2s and tax returns, documents your assets, and runs your application through automated underwriting. The resulting pre-approval letter specifies the maximum loan amount you’re approved for, the loan program, and any conditions that must be met before final approval. An underwritten pre-approval — where a lender’s underwriter has reviewed the complete file — is even stronger and reduces the risk of surprise conditions when the actual purchase application is submitted.

Documents to gather before meeting with a lender: two years of W-2s and federal tax returns, one month of current pay stubs, two months of bank statements on all accounts being used for down payment and reserves, photo ID, and documentation of any other income sources. Self-employed borrowers add two years of business returns (Schedule C, Form 1065, or Form 1120-S depending on entity type).

Texas buyers should get pre-approval letters from two lenders rather than one. The pre-approval process doesn’t obligate you to use that lender, and having a second opinion gives you rate comparison leverage when you eventually lock. Rate competition between lenders on the same loan scenario — same credit score, same loan amount, same program — is where buyers with well-documented files capture meaningful savings. A 0.25% rate difference on a $350,000 loan saves $48/month and approximately $17,280 over 30 years.

Step 2: Understanding Texas-Specific Costs Before You Budget

Texas’s property tax environment is the most important financial variable that buyers from other states frequently underestimate. Texas’s average effective property tax rate is approximately 1.74% (Tax Foundation) — versus the national average of 1.10%. On a $350,000 home, that’s $6,090/year = $508/month in property taxes, compared to $3,850/year = $321/month at the national average. The $187/month gap means a Texas buyer earning $80,000/year has meaningfully less purchasing power than a buyer with the same income in a lower-tax state.

Texas homestead exemption ($100,000 off school district taxable value, filing Form 50-114 with your county appraisal district by April 30 of the year after purchase) saves $800–$1,200/year in property taxes starting in year two. It doesn’t reduce your year-one escrow payment — lenders base escrow on the pre-exemption tax bill — but produces a predictable savings that accumulates over your ownership period. The 10% annual cap on assessed value increases that activates with the homestead exemption is equally valuable in appreciating markets: your taxable value can’t grow more than 10% per year regardless of actual appreciation, protecting you from the tax escalation that hits new buyers in the same neighborhood at full market value.

Texas homeowners insurance averages $2,200–$4,500/year — significantly above the national average — due to hail, wind, hurricane exposure (coastal areas), and the claims experience of major Texas weather events. For a $350,000 home, budget $2,800–$3,500/year for insurance. Shop multiple carriers including USAA (for military families), State Farm, Allstate, and Texas-specific carriers like Texas Farm Bureau Mutual. The Texas Department of Insurance’s rate comparison tool at tdi.texas.gov publishes complaint ratios and financial stability ratings for Texas insurers.

Step 3: Making Competitive Offers in Texas Markets

Texas is a “non-disclosure” state — sale prices are not publicly recorded in the MLS or required to be disclosed. Comparable sales data comes from MLS transaction records that agents access through their board memberships. As a buyer working with an agent, ask to see the actual closed comparable sales data (not estimated values from automated systems) for properties similar to your target in size, condition, and location sold within the past 90 days.

Texas uses the Texas Real Estate Commission’s (TREC) One to Four Family Residential Contract as the standard purchase contract. The contract has specific provisions important for Texas buyers:

Option period: Texas buyers typically negotiate a 7–10 day unrestricted option period, funded by an earnest money payment (typically 1–3% of purchase price). During this period, you can terminate the contract for any reason and receive your earnest money back. The option fee (typically $100–$500 separately from earnest money) is non-refundable but is credited to your purchase at closing if you proceed. The option period is when your inspection, survey review, and initial appraisal assessment occur. Never waive the option period on a Texas resale home — it’s your primary risk management tool.

Earnest money: Typically 1–3% of purchase price held by the title company. In Texas, earnest money is refundable during the option period and may be refundable after option period expiration if a specific contract condition fails (financing contingency termination, appraisal contingency). After the option period expires and conditions clear, the earnest money is at risk if you default without contractual basis.

Title company selection: Texas buyers have the right to choose their own title company. Most transactions use the title company the agent recommends, but you can request a title company of your choice. In Texas, the buyer typically negotiates for the seller to pay the owner’s title insurance premium (customary in Texas; approximately $1,935 on a $350,000 purchase at promulgated rates). Confirm this is included in your offer.

Step 4: Inspections in Texas — What to Prioritize

Texas’s climate, soil conditions, and housing stock create specific inspection priorities that buyers from other states need to understand:

Foundation inspection: Expansive clay soils are endemic throughout North Texas (Dallas-Fort Worth area), Central Texas (Austin), and the Gulf Coast corridor (Houston). Clay soils expand when wet and contract when dry, creating differential foundation movement that is the leading structural issue in Texas homes. Foundation inspection by a licensed structural engineer (not a home inspector) costs $300–$500 and provides a formal report on current conditions, movement history, and recommendations. On any DFW, Austin, or Houston home over 15 years old, a structural engineer’s foundation assessment is worth every dollar. Foundation repair ranges from $3,000 for minor pier work to $30,000–$80,000+ for severe differential movement requiring full pier-and-beam or concrete post-tensioned slab repair.

HVAC inspection: Have a licensed HVAC contractor inspect the system beyond what the general home inspector covers. An HVAC contractor measures refrigerant pressure, inspects coil condition, checks blower motor amperage, verifies system capacity relative to home square footage, and provides a remaining-life estimate. In Texas, where air conditioning runs 6–8 months and systems are often undersized or aging, knowing whether the HVAC has 2 years or 12 years of reasonable remaining life is material to your offer price and decision-making.

Roof inspection: Hail damage is endemic in Texas, particularly in the DFW and Austin corridors. A home inspector with specific roofing expertise (or a licensed roofing contractor) should evaluate hail damage evidence, remaining shingle life, and flashing and penetration condition. Sellers may have delayed roof claims; visible granule loss, soft spots, and impact marks from hail events should be documented and considered in price negotiation or repair requests.

Wood-destroying insects: Texas law requires a WDI (wood-destroying insects) report for VA-financed purchases; it’s recommended for all buyers. Termite damage and activity is common in central and eastern Texas. Treatment costs $400–$1,500; damage repair can be substantial if activity has been ongoing and undetected.

Step 5: Understanding the Appraisal and What Happens If It Comes In Low

Your lender orders an appraisal through an Appraisal Management Company (AMC) after the contract is executed. The appraiser provides an independent estimate of market value based on comparable closed sales. If the appraisal comes in below your contract price, you have four options under a standard Texas TREC contract with an appraisal contingency (Third Party Financing Addendum):

1. Renegotiate the price with the seller to the appraised value. Many sellers will reduce price to appraised value to keep the transaction alive rather than re-listing and facing the same appraisal outcome with the next buyer.
2. Pay the gap — the difference between appraised value and purchase price — in cash at closing. Your lender will finance up to the appraised value only; the gap comes from your own funds. Only makes sense if you’re confident the property is worth the contract price and the gap is manageable.
3. Challenge the appraisal (Request Reconsideration of Value) by providing your agent’s comparable sales data that supports the contract price. Appraisers who missed relevant comparable sales or made errors in adjustment methodology will update their report when presented with documented evidence. This works occasionally and is worth attempting with good data.
4. Terminate the contract and receive your earnest money back (with proper financing contingency language in place). You lose the option fee and the appraisal cost, but avoid overpaying for the property.

Step 6: Final Walkthrough and Closing

The final walkthrough (typically 24 hours before closing) confirms that the property is in the condition agreed to in the contract — repairs specified in the inspection response have been completed, appliances and fixtures that were supposed to convey are still present, and no new damage has occurred since your inspection. Bring your inspection report and inspection response addendum to the walkthrough. If repairs agreed to weren’t made or were done improperly, this is the time to negotiate — not after you’ve signed closing documents.

Texas closings occur at a title company, not at a lender’s office or attorney’s office (Texas doesn’t require attorney closings on residential transactions). The title company’s escrow officer coordinates the signing of the deed, deed of trust, and loan documents. Bring government-issued photo ID, a certified check or wire transfer for your cash to close (personal checks are not accepted at most Texas title companies), and a copy of your homeowners insurance binder or policy showing your coverage effective date at or before closing. Closing typically takes 45–90 minutes. Your lender funds the loan the same day or the following business day; you receive keys when the deed records at the county clerk’s office, typically within a few hours of closing.