The Texas Home-Buying Process: Your Step-by-Step Checklist

Texas Property Code Section 5.008 requires the seller to deliver a written Seller's Disclosure Notice before you sign a contract. This form covers known defects, foundation history, flooding, environmental hazards, and more. Texas's clay soils make foundation issues especially common, so pay close attention to Section D, which asks directly about cracks, settling, and prior repairs. If you do not receive this notice before signing, you have seven days after receipt to terminate the contract and get your earnest money back.

Cost: $0

Texas law requires licensed agents to use TREC-promulgated contract forms. For a standard single-family resale home, that is the One to Four Family Residential Contract (Form 20-17). Your agent fills in the price, financing terms, earnest money amount, option period, and closing date. The builder's own form may be used when buying a new construction home directly from a production builder, but your agent should try to use the TREC New Home Contract instead whenever the builder will accept it.

Cost: $0

Texas contracts include a unique buyer-friendly feature called the option period (Paragraph 5 of the TREC contract). During this period — typically three to ten days, but negotiated — you have an unrestricted right to walk away for any reason. You pay the seller a non-refundable option fee (paid directly to the seller, not the title company) within three calendar days of the effective date of the contract. If you terminate during the option period, you lose the option fee but get your earnest money back.

Cost: $100-$500 typical (non-refundable)

Earnest money is a deposit that shows the seller you are serious. In Texas, earnest money is typically held by the title company (not your agent's broker), and it must be deposited within a short window spelled out in the contract — usually two to three business days after the contract's effective date. If you terminate inside the option period, you get earnest money back. If you breach the contract outside the option period without a valid reason, you may forfeit it.

Cost: 1-2% of purchase price typical

The effective date of the contract is the date the last party signs — this is day zero for calculating every deadline in the contract: when the option fee is due, when earnest money must be deposited, and when the option period ends. Write down each deadline immediately after the contract is executed. Missing the option fee deadline by even one day means you lose the unrestricted right to terminate.

Cost: $0

If the property is inside a Municipal Utility District, Texas Water Code Section 49.452 requires the seller to give you a written MUD disclosure notice before you sign the contract. This notice states the current MUD tax rate and the district's bonded debt. Similarly, if the property is in a Public Improvement District, Texas Local Government Code Section 372.013 requires a written PID disclosure. MUDs and PIDs are common in suburban areas around Houston, Dallas-Fort Worth, Austin, and San Antonio, and the fees can add hundreds of dollars per year to your housing cost.

Cost: $0

If the property is in a homeowners association, Texas Property Code Chapter 207 requires the seller to request a resale certificate from the HOA. The HOA has 10 days from the seller's written request to deliver it. The certificate shows regular and special assessment amounts, any unpaid dues or fines against the property, reserve fund balance, and pending HOA litigation. Review it carefully — unpaid HOA dues become your problem after closing.

Cost: $75-$250 typical (seller usually pays)

Federal law requires sellers to disclose known lead-based paint hazards and provide an EPA-approved information pamphlet for any home built before 1978. You also have a federally guaranteed 10-day window to conduct a lead-based paint inspection, though you can waive it in writing. Texas has no separate state-level lead paint law — the federal rule controls. If the home was built in 1978 or later, this disclosure is not required.

Cost: $0

Texas real estate inspectors must be licensed by TREC. Hire your own inspector — do not rely on one recommended exclusively by the seller. A general home inspection typically covers the foundation, roof, electrical, plumbing, HVAC, and structural components. Given Texas's clay soils and history of foundation movement, make sure the inspector comments specifically on foundation performance and drainage.

Cost: $300-$600 typical

Read the full inspection report, not just the summary. Sort findings into three buckets: safety issues (fix before closing), major defects (negotiate a credit or repair), and minor items (handle yourself after moving in). Foundation repairs, roof replacement, and electrical panel upgrades tend to be the costliest items. Your inspector cannot tell you how much repairs will cost — get contractor estimates for anything significant.

Cost: $0

After reviewing the inspection, you can ask the seller to fix specific items, give you a closing cost credit, or reduce the purchase price. Your agent will draft an amendment to the contract. If you and the seller cannot agree, and you are still within the option period, you can terminate and walk away, keeping your earnest money (but not the option fee). The seller is not legally required to make any repairs.

Cost: $0

Depending on the home and its location, you may want additional inspections beyond the general one. Common specialty inspections in Texas include: foundation engineer evaluation (if the inspector flags concerns), sewer scope (for older homes), mold testing, pest and termite inspection, pool inspection (if applicable), and a septic system inspection for rural properties. Each specialty inspection costs extra but can save you from a very expensive surprise.

Cost: $100-$500 per specialty inspection

After you are under contract, formally submit your loan application with your chosen lender. Your lender will pull your credit, verify employment, and review all financial documents. Federal law requires the lender to give you a Loan Estimate within three business days of receiving your application. Read it carefully — it shows your interest rate, monthly payment estimate, and closing cost breakdown. Do not make any large purchases, change jobs, or open new credit accounts during this time, as that can affect your loan approval.

Cost: $0-$50 (application fee varies by lender)

Your lender will hire an independent licensed appraiser to estimate the home's market value. The lender will not approve a loan for more than the appraised value. If the home appraises below the purchase price, you have three options: negotiate the price down with the seller, pay the difference in cash out of pocket, or terminate the contract (if your contract includes an appraisal contingency). Review your specific contract terms with your agent.

Cost: $450-$700 typical

After reviewing your application, the underwriter will likely issue a list of conditions — additional documents or clarifications needed before final approval. Common conditions include a letter explaining a gap in employment, documentation of a gift for a down payment, or proof of insurance. Respond as quickly as possible. Delays in returning lender conditions are one of the most common reasons closings get pushed back.

Cost: $0

Your lender will require you to have homeowners insurance in place before closing. In Texas, insurance rates vary significantly by location — coastal areas, flood-prone zones, and hail corridors (much of North Texas) can be expensive. Get at least three quotes. Also check whether the home is in a FEMA-designated flood zone; if it is, your lender may require separate flood insurance, which is not included in a standard homeowners policy.

Cost: $1,200-$4,000+ per year depending on location and coverage

Federal law requires your lender to send you a Closing Disclosure at least three business days before closing. This document shows every cost associated with your loan — the final interest rate, monthly payment, and a full breakdown of closing costs. Compare it to the Loan Estimate you received earlier and flag any fees that look different or unexpected. Contact your lender immediately with any questions — do not wait until the closing table.

Cost: $0

Schedule a final walkthrough within 24 hours of closing. The purpose is to confirm that the home is in the condition agreed to in the contract — that agreed-upon repairs were completed, the seller's belongings are moved out, and nothing has been damaged. Bring your inspection report and the list of any agreed repairs. If you find problems, tell your agent immediately so they can be resolved before — or at — closing.

Cost: $0

Get the exact wire amount and wiring instructions directly from the title company — call them to verify before sending. Wire fraud targeting home buyers is a known and growing scam; never wire money based on instructions received by email alone without a phone verification. Your closing funds cover your down payment plus closing costs (typically 2-5% of the loan amount in Texas). Texas has no state income tax, so there is no state-level withholding to worry about.

Cost: Down payment + 2-5% of loan amount in closing costs

The title company searches public records to make sure the seller has clear ownership and that there are no liens, judgments, or encumbrances on the property that could become your problem after closing. You will receive a title commitment outlining what is and is not covered by the title insurance policy. Read Schedule B carefully — it lists exceptions. Lender's title insurance is almost always required by your lender; owner's title insurance protects your own equity and is strongly recommended.

Cost: $500-$2,000+ depending on purchase price

Texas closings are conducted by a title company — you do not need an attorney present, though you may hire one if you wish. You will sign a large stack of documents including the promissory note, deed of trust, and closing disclosure. If the property is your primary residence and both you and a spouse are on the loan or title, Texas's homestead laws require both spouses to sign the deed of trust regardless of how title is held. Bring a government-issued photo ID and be prepared to spend one to two hours.

Cost: $0 (costs already wired)

The final settlement statement (sometimes called the ALTA settlement statement) shows every dollar coming in and going out of the transaction. Review it to confirm that the fees match what was disclosed and that your agent's compensation matches what was agreed to in your Buyer Representation Agreement. Post-NAR settlement rules require the settlement statement to clearly show all compensation paid, including any seller concession applied toward buyer agent fees.

Cost: $0

Once all documents are signed and funds are received by the title company, the deed is recorded in the county deed records. In Texas, recording usually happens the same day or the next business day. You will receive a copy of your recorded deed and the title insurance policy by mail within a few weeks. Keep these documents in a safe place — they are proof of ownership.

Cost: $0

Texas offers a significant property tax reduction for homes that are your primary residence — the homestead exemption under Texas Tax Code Chapter 11. You must own and occupy the home as your principal residence on January 1 of the tax year. File the exemption application with your county appraisal district as soon as possible after closing. Starting in 2022, new homeowners can apply and receive the exemption for the year they purchase, even if they close mid-year. The exemption can save hundreds to thousands of dollars annually.

Cost: $0

Transfer or set up electricity, gas, water, and internet service before or on your move-in date. In Texas, electricity is deregulated in most areas, which means you choose your provider and plan — compare rates at the Texas Public Utility Commission's Power to Choose website. Also update your address with the USPS, your bank, employer, and any government agencies. If you have a vehicle, update your registration and driver's license within 30 days of moving.

Cost: varies