Whether you’re a first-time home buyer, relocating for work, or buying your retirement property, home buying can be equal measures of joy and stress.
After all, there’s a lot to know to make sure a new home purchase runs smoothly. Texas, the second most populous state in the country, has a wide range of amazing places to call home. Whether you want the countryside, beach, or a big city like Dallas or Houston, there’s always a great reward for navigating the home-buying process. Fortunately, realtors can smooth the path.
Homeowners, first-time buyers, or experienced hands must follow some basic steps to ensure a streamlined process. Our Texas shopping guide for homebuying and choosing a real estate agent will walk you through the vital points to buying your dream house in the Lone Star State. It will also help you choose the ideal real estate professionals.
Be sure to cover these points before making any real estate transaction in Texas.
Introduction to Texas Shopping for Real Estate Agents and Homes
The Texas housing market sees the average house sale price hovering around the $300,000 mark. That’s a lot of money to splash out, so it’s essential to choose the right house and understand the costs and monthly payments involved.
For example, Texas is famous for having no property tax. That’s true from the state, but there are sales taxes (6.25%), and local districts charge their own property taxes. In total, Texas properties may incur up to 7% of the sale price or more in taxes.
Also, some home prices may seem lower than others. Be careful —there may be good reasons why. Texas offers homebuyers plenty of protection within the real estate market if specific rules are followed.
Realtors play a critical role for anyone house hunting. Access to homes for sale is just part of their job. They’ll also advise on areas like property taxes and how to avoid falling into potentially expensive property scams.
What Do Realtors and Real Estate Agents Do in Texas?
Many real estate agents in Texas are ready to help you during the home-buying process.
Homeownership is a huge financial and emotional commitment, so take your time to find the right realtor. Make sure they’re licensed with the Texas Real Estate Commission (TREC).
Remember that some realtors are better suited to certain clients so focus on those who know the neighborhoods that appeal to you. Look for positive reviews and ask potential agents pertinent questions to discover if they’ve understood what you want. Creating a wish list to show them is a great starting point.
A good realtor will assist with negotiating offers and contracts and guide you through the closing process of buying a home. They’ll also know all the legal hoops you’ll need to jump through, ranging from title companies to inspectors. These stages are crucial if you want to ensure a smooth house buying process that is legal and prevents you from buying a money pit riddled with issues.
Interview at least a few real estate agents before choosing one. Check their experience, ask how many sales they’ve handled recently — especially within your price range — and look at reviews, complaints, and any awards.
What Are the Basic Steps for Buying a Home in Texas?
A smooth home purchase should follow these steps:
- Save for a down payment. Most mortgage lenders recommend having 20% of your home’s purchase price for a down payment, although there are ways to lower this.
- Make sure you know your credit score from all three bureaus to check for any errors or steps you can take to improve it.
- Find a real estate agent. Interview several before deciding on one and research reviews online.
- Get pre-approved for a mortgage — that way, you know your purchasing power. Again, shop around.
- Choose your location based on price, services, amenities, and lifestyle choices.
- Start looking for your new Texas home. List your must-haves and nice-to-haves when going on walkthroughs. Talk to your real estate agent if they aren’t finding properties that match your aspirations.
- Make an offer via your real estate agent. Remember that homes usually sell quicker in the summer months than in winter.
- Hire independent home inspectors and appraisers of your potential new property to ensure you know exactly what you’re getting.
- Know your closing date, which is when all the paperwork and purchase agreements take place.
Shopping for Real Estate Agents in Texas: Home Buying Checkpoints
All of the sections we mentioned above contain many important steps within them. Your realtor should help with advice when it comes to each factor. Here’s a quick rundown of what to look for when shopping for a real estate agent and going through the home-buying process in Texas.
Down Payments
Some mortgage lenders may ask for a 20% down payment for a conventional loan, but other options exist. Don’t forget: the higher your down payment, the less you pay back over the mortgage’s lifetime in interest.
There are also assistance programs to help. First-time home buyers can lower their required down payment to 5% through the Texas Home Buyer Program or request the FHA for financial assistance. Veterans can get down payment help through the VA’s Home Loans program.
Some mortgage lenders offer lower down payments, which may mean taking out mortgage insurance and adding to your monthly repayments.
Pre-Approval for a Mortgage
Mortgage lenders assess your credit score to determine the amount and type of loan they may offer. They will also look at your income and your debt-to-income ratio. That’s to prevent someone earning $20,000 annually from getting approval for a $1 million mortgage.
Once approved, try not to negatively affect your credit score. Do this by keeping all accounts open, not opening new credit channels like credit cards, and keeping any current credit payments paid on time.
Understand if you’re being offered a fixed-rate or variable-rate mortgage. Variable-rate mortgage payments can go up if interest rates rise. Also, remember that closing costs are on top of the price of your new home.
Making an Offer for Your New Texas Home
Congratulations, you’ve found your dream home! Your real estate agent should be the one making an offer. They should know the area’s home values and how to broker the best deal.
Here’s a checklist of what to look for:
- Seller’s Disclosure: This document lists any issues which could affect the property’s value, like dodgy wiring or a structural problem. A seller’s disclosure is required by law in Texas.
- Making an offer: Includes the closing date, offer amount, and special conditions like moving-in dates or buying furniture. Get creative.
- Earnest money deposit: This “good faith” payment, usually around 1-3%, is an amount you agree to pay the seller until closing.
- Order a title search: This process ensures the property’s title is valid, checking the place’s records and looking for any potential issues like outstanding mortgages or ownership disagreements. Never buy a house without a title search.
- Look for homeowner’s insurance: A decent homeowner’s insurance will cover expenses should your home suffer damage or accidents. It may cover floods, fire and lightning, theft, and even expensive items like jewelry.
- Conduct an appraisal and home inspection: Your mortgage lender will conduct the appraisal and most likely add the cost to your mortgage agreement. The appraisal determines whether the home is worth what you are paying. The buyer’s agent — your real estate agent — should recommend a home inspector to check the home’s foundations, roof, plumbing, and even radon levels.
- Negotiate possible repairs: The home inspection may reveal issues; be ready to negotiate on the purchase price if problems are revealed.
- Final walkthrough: A last chance to check the property and ensure any agreed repairs have been completed. Notify your agent immediately if anything needs to be corrected.
- Closing time: Sign the loan and escrow documents, wire the down payment, and leave them to the lender to approve. You usually get the keys after closing.
Remember, a licensed real estate agent will know all these steps and provide advice all the way. Of course, they charge a fee, usually a percentage of the sale value. Know their price before engaging their services.
Where Are the Best Places to Live in Texas?
Texas has many fantastic counties, cities, and towns, too numerous to mention. They are all subjective, but here are some popular places to live in Texas.
First, here are some approximate average house prices across the Lone Star State (May 16, 2023):
- Austin: $566,000
- San Antonio: $263,000
- Dallas: $310,000
- Arapaho: $430,000
- Killeen: $224,00
Remember that many Texas areas have a lower cost of living than the national average. If you want more bang for your buck, then places like Brownsville (81% cost of living vs. national average), Beaumont (89%), El Paso (85%), and Corpus Christi (91%) rate highly.
Can I Save On My Utility Bill in Texas?
Aside from a vast choice of lifestyles and neighborhoods with excellent value real estate, moving to Texas brings more chances to save money.
Around 85% of Texas residents live within its deregulated energy market area. That means there are more than 140 electricity companies (REPs) to choose as an electricity supplier. The result of this competition is that folks enjoy lower average electricity prices than the rest of the nation. But Texans use more energy than most Americans, leading to higher bills.
Fortunately, people moving to Texas can use their arrival into a new property as a chance to reset their relationship with energy and find a great value deal. Don’t forget to ask your real estate agent for your new home’s approximate energy usage before moving in so you can find a suitable electricity offer.
And remember to start looking for an electric company about a month before your moving-in date. No one wants their first day in their new home to be one without power.
People moving to regulated areas need to contact their area’s utility company in advance to connect to the electricity supply.
Understanding Electricity Jargon Before Switching Suppliers
Understanding your electricity bill will be a breeze after clearing all the home purchase hurdles. Below is the most important vocabulary to understand before choosing a new electric supplier before your move.
- Kilowatt-hours: Texas electricity companies advertise their products and calculate energy bills in kilowatt-hours (kWh). For reference, in 2021, the average Texas household used 1,094 kWh monthly.
- Fixed-rate plans: Fixed-rate plans mean you will pay the same kWh price throughout the contract term. Keep in mind that fixed-rate plans often require deposits, credit checks, and charge early termination fees.
- Cancellation or early termination fees: These can run to several hundred dollars. REPs impose them if you leave your deal early.
- Variable-rate plans: These are flexible plans with no deposits, credit checks, or early termination fees. However, the kWh prices fluctuate up and down, so you could pay more for your energy. See if you quality for a no deposit electricity option here.
- Time-of-use (TOU): These plans advertise free electricity on weekends or weeknights, usually conditional on using enough electricity at other paid-for times. Check the fine print to avoid paying more than you expected.
- Minimum usage plans: These suit heavy electricity users who know they will use a certain amount each month. Failure to do so every month means paying a much higher kWh price than that offered for minimum usage.
- Electricity Facts Label (EFL): Always read every offer’s EFL and look for hidden fees among the terms and conditions. No EFL? Don’t sign.
How Can I Find the Best Electricity Prices in Texas?
The Public Utility Commission of Texas (PUCT) has set up an independent website called Power to Choose to help people. It allows you to compare electricity prices based on your ZIP code, energy usage, and other parameters.
Pro tip: Read our guide on using the Power to Choose website.
Alternatively, look at the websites of the 140+ electric companies or use a price comparison website. You won’t see every deal this way. Companies list their own products, and price comparison websites often promote only a handful of deals.
Remember, if you don’t set up an electric company before moving in, you won’t have any power. Some suppliers, like us here at Amigo Energy, can help with same-day connections.
Get a Grip on the Home Buying Process in Texas
Our Texas shopping for real estate agents and home-buying guide underlines the importance of finding the right realtor. Buying a dream home is never 100% smooth sailing. But a licensed Texas real estate agent that knows their stomping ground, how to drive a bargain, and tick all the legal boxes is invaluable.
Make sure you know your budget and get pre-approval for that amount. Check what down payments you’ll need and see if there are any suitable assistance programs. Keep your credit score consistent throughout the home-buying process and take time to see as many properties as possible.
Your real estate agent can advise on what to offer and ensure all the legal requirements, from inspections to title searches, are carried out. As you move to the closing day on your new home, a final walkthrough to check if any repairs have been completed leads to the day when all the paperwork gets signed.
Remember to check if your new home is in a deregulated energy area. If yes, browse for the best electricity deal that suits your household. We recommend starting a month before the move day. If not, contact your area’s utility to set up power ready for your arrival. Our top tips for setting up utilities in Texas will answer any further doubts. Welcome to the Lone Star State!
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