The Texas Home Buying Process
Texas real estate has several unique features that differ from other states. Understanding these before you start will prevent surprises and help you move faster when you find the right home.
Stage 1: Financial Preparation (2-4 Weeks)
Review Your Credit
Pull your credit report from all three bureaus at annualcreditreport.com. Dispute any errors before applying for a mortgage — corrections can take 30-60 days.
Calculate Your Budget
Use the 28% rule: housing costs should not exceed 28% of gross monthly income. Add in property taxes (1.8-2.5% annually in Central Texas) and homeowner's insurance ($150-$250/month).
Save for Upfront Costs
Beyond down payment, budget for inspections ($600-$1,200), option fee ($100-$300), earnest money (1% of purchase price), and moving costs.
Stage 2: Pre-Approval (3-7 Days)
Choose a local lender with Texas experience. Gather:
- 2 years W-2s and tax returns
- 30 days pay stubs
- 2 months bank statements
- Government ID
- DD-214 (veterans)
Get a full pre-approval — not just a pre-qualification. In Austin's market, you need a lender who can respond quickly and communicate with listing agents.
Stage 3: Find Your Agent and Start Searching (2-8 Weeks)
In Texas, buyer's agents are compensated by the seller (or builder). There is no cost to you for buyer representation. Choose an agent who:
- Works full-time in your target area
- Has experience with your loan type
- Can recommend reliable inspectors and title companies
Stage 4: Make an Offer (Texas-Specific)
Texas uses the Texas Real Estate Commission (TREC) standard contracts. Key Texas-specific elements:
Option Period: A set number of days (usually 7-10) during which you can terminate the contract for any reason. You pay a small option fee ($100-$300) that is non-refundable but credited at closing.
Earnest Money: Typically 1% of purchase price, held by the title company.
Survey: Texas requires a survey of the property boundaries. Sellers sometimes have a recent survey to share; otherwise, budget $400-$600 for a new one.
Stage 5: Due Diligence (Option Period — 7-10 Days)
This is your window to inspect everything:
- General home inspection
- Foundation inspection (critical in Texas clay soil)
- Pest inspection
- HVAC inspection
- Review HOA documents (if applicable)
- Review the seller's disclosure notice
If you find issues, you can negotiate repairs, a price reduction, or a closing cost credit — or walk away and get your earnest money back.
Stage 6: Financing and Appraisal (2-3 Weeks)
After the option period, your lender orders the appraisal. Simultaneously, underwriting reviews your file in detail. Provide any additional documents quickly — delays in document delivery are the #1 cause of delayed closings.
Stage 7: Title Search and Closing Prep
The title company conducts a title search to confirm clean ownership. You will receive a Closing Disclosure (CD) at least 3 business days before closing showing all final costs.
Texas title insurance: Customary for the seller to pay the owner's title policy. You pay the lender's title policy.
Stage 8: Final Walk-Through and Closing
Do a final walk-through within 24 hours of closing to confirm the property is in the agreed condition. At the title company, you'll sign 50-100+ pages of documents, wire your closing funds, and receive your keys.
Frequently Asked Questions
The Austin metro has shifted toward a more balanced market compared to the frenzied 2021-2022 seller's market. Suburbs like Hutto, Kyle, and Pflugerville have more inventory and seller flexibility. Round Rock and Georgetown remain competitive. Overall, buyers have more negotiating power in 2024 than in recent years.
TREC stands for Texas Real Estate Commission. All Texas real estate agents must use TREC-approved contract forms for residential purchases. The standard TREC One to Four Family Residential Contract is the most common. These forms are standardized to protect both buyers and sellers and include Texas-specific provisions like the option period.
Lenders typically require a survey to confirm property boundaries, easements, and encroachments. Sellers often have an existing survey you can use if it is recent. Otherwise, budget $400-$600 for a new survey. The contract specifies who pays for the survey — in Austin, it is negotiable.
