March 16, 2022
Real Estate
Are you part of the great Texas migration? Or a native Texan first-time buyer? Here is the ultimate Texas home buying guide just for you.
In 2021, moving company U-haul investigated where people who rented their moving trucks went. You guessed it, most of them have gone to Texas. Almost half of these domestic migrants came from California – Elon Musk included.
Fortune 500 companies like Oracle and Hewlett Packard have moved HQs and built new plants in Texas as well. Many are saying that Texas is the next Silicon Valley.
Another study revealed that 82% of Texas-born residents still live in the Lone Star State.
There must be something in Texas water – that or the barbecue. But people swear it has to do with the high median income, low unemployment rates, pleasant weather, racial diversity, and affordable housing prices. Big businesses cite friendlier tax policies and regulations.
We’ve established why many have gone from California Dreaming to Dreaming of Dallas. Let’s now look at the things to know before buying a house in Texas.
The first step to buying a house in Texas is to evaluate your financial situation and see if you have saved enough for a downpayment. Another factor is if you can consistently make the monthly mortgage payments with a particular interest rate and still afford to live a comfortable life. The downpayment is commonly 20% of the purchase price.
A typical home in Texas has a market value of $289,252. That means you need to put away $57,850.40 for the downpayment alone. You may explore downpayment assistance programs such as the TSAHC Home Sweet Texas Home, My Choice Texas Home, and My First Texas Home if you need support affording the downpayment.
For instance, My Choice Texas Home offers eligible homebuyers down payment assistance of up to 5% of the loan amount.
After sorting out the downpayment, it’s time to get pre-approved for a mortgage. Mortgage pre-approval is critical as many sellers won’t be willing to do home viewings without this.
Mortgage lenders will verify your employment history, current assets, credit score, and debt-to-income ratio (DTI) during the pre-approval process.
You can compute your debt-to-income ratio by adding all your recurring monthly debts (auto loans, student loans, credit cards) and estimated monthly mortgage payment, then dividing it by your gross monthly income. The lender will likely approve your mortgage loan if you have a DTI of 43% and below.
With a mortgage pre-approval letter in hand, you can now move on to the fun part of buying a house in Texas: finding a home. List your preferences to narrow down your search. Take note of square footage, style, number of bedrooms, and even property taxes.
Do you need a pet-friendly house in Texas with a big yard? What color palette would you like?
The three crucial considerations in buying a home in Texas are location, home value, and local lifestyle. For example, Montrose is the most inclusive neighborhood; Garden Oaks is perfect for young professionals with growing families. Maybe you would like to live close to the business district or favor a suburban lifestyle.
The standard market value of homes in Houston is $251,607. Are you willing to go higher than that, or do you prefer to go lower? If we’re looking at other cities, Plano, TX, is the most racially diverse, while Garland, TX, has the most affordable cost of living.
Perhaps you’ve decided on purchasing a home in Houston’s East End (EaDo) community. You need the help of an expert real estate agent to lock in your dream home and a convincing real estate offer letter to boot.
The letter should include a brief personal background, what you love about the home, your bidding plan, and your vision for the future. Have an editor proofread the letter and your realtor check for a strong bidding plan to set yourself apart from other home buyers.
However, prepare for rejection and be ready to try again!
Part of the home buying process in Texas is the back and forth of your realtor with the seller’s agent. If the seller is still not keen to sell to you, your realtor will ask the seller’s agent if you can make a higher offer, increase the downpayment amount, adjust timelines, or switch mortgage lenders.
Another way to seal the deal is to offer to forego the home inspection or to cover all repair and payment closing costs. But we recommend not to do this lightly because of the possible risks and financial loss to you.
You usually hold closings at the offices of title companies. Set aside up to 3 hours of your time to read and sign paperwork. Texas laws require a real estate attorney to be part of every home sale. Ensure you run the closing disclosure form by your attorney as well as the mortgage promissory note, the deed, and the final loan application.
After signing the documents, you will need to pay the title company the closing costs, including prepaid fees, title and escrow charges, lender, and other closing costs.
Stay up to date on the latest real estate trends.
Did your home appraisal come in lower than expected? Don't worry. Here are 4 steps you can take after a low appraisal to make the home sale still goes through.
Wondering if you just saw a realtor red flag? Here are 9 signs your might be working with a bad real estate agent (and tips for breaking up).
It’s not easy to settle on a particular location to call home; there are numerous variables to consider. You want a community that matches your current lifestyle as we… Read more
A condo is an economical alternative to a detached house and a terrific option for first-time buyers looking for a place to raise a family.
The home-buying process might seem like it’s going swimmingly at times. Then you go to get your house inspected, and there’s a hitch. Professional home inspectors must… Read more
Safe and happy residents are a direct result of their neighborhoods. Relaxing and watching your children play outdoors is much more attainable if you feel secure doing… Read more
Many people’s ideal home has a large yard with a majestic tree. However, large trees need a lot of care and attention, something most people underestimate. When you ar… Read more
Now that you’ve located your ideal home, you’re prepared to make an offer. Is there a prime day to finalize a home purchase? How about the worst day to close on a hous… Read more
You’ve got questions and we can’t wait to answer them.