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So you want to move to Texas? Here’s how to buy a house in Texas.

How Texans see Texas
How Texans see Texas

We’ve been getting a lot of folks from California and other states looking to buy property in Texas. Some are investors looking to take advantage of the low housing prices, while others are hoping to move to Texas because of the great economy.

The process of buying real estate in Texas is quite similar to buying a home in other states. Here’s what you need to know:

Who’s Involved

When buying property in Texas, you’ll generally work with the following people:

  • A licensed REALTOR – in most cases, one REALTOR represents the Buyer and another represents the Seller
  • A home inspector – to make sure your goods are good.
  • A lender – Unless it’s an all-cash purchase, you’ll need a lending institution to give you a mortgage. If you are using the property as your primary residence you can get a mortgage with a downpayment as low as 3% of the purchase price. If you are looking for an investment property you can expect to put at least 20% down.
  • An insurance broker – If you aren’t residing in the home yourself, insurance can be trickier and more expensive
  • A title company – When you’ve come to an agreement with the seller and the contracts are done, the title company will hold the money in an escrow account while both parties sign the neccessary paperwork to transfer ownership. They will also provide the title policy.

House Hunting

The House Hunting Process

There are 4 primary ways that you can search for a home in Texas:

  1. Online: We have Zillow, Trulia and  You can expect most homes to be on these sites. However, it’s not always the most up to date.
  2. Automatic Search Results via Email: This is the best way to keep up with the latest properties in the area you are looking for. You can have properties emailed to you every morning or as they come on to the market directly from the MLS.
  3. In Person: Driving the neighborhood you want to be in is always a plus. You can become familiar with said neighborhood and might be able to snag a property before it hits the market.
  4. Via Video: Many of our out of state buyers will do a walkthrough via skype or facetime to get a good feel for the property.

Sold Prices & Data

Once you’ve located a house you like, your REALTOR can access past sold properties and give you a very good idea what that house is worth so you know what to offer.  REALTORS in Texas have access to software and tools that aren’t readily available online.

Schools & Neighborhoods

Your REALTOR will have access to reports on the local schools and neighborhood that you are interested in through the National Board of Realtor’s Realtor Property Resource.

Conditions & Contingencies

Offers on Texas properties almost always include financing and home inspection conditions. Once the Buyer has conducted a home inspection or received approval from a lender for a mortgage, the property sale is ‘firm’ – meaning you can’t back out of it without losing your earnest money.

In Escrow

When a contract is written earnest money is deposited with an escrow officer at a title company. The deposit is held until the contract is complete with the earnest money going towards the purchase price (in most cases) or until the contract is terminated.



Taxes are prorated, so if you buy a home in December, you aren’t going to be stuck with the bill for the entire years taxes.  The seller will pay their portion, and yours will be put into an escrow account. Typically with a conventional loan, you will put 3 months taxes into an escrow account and then pay in each month. At the end of the year your taxes are paid from the escrow account.  It’s very important that you file your homestead exemption at the beginning of the year. Otherwise you could see a substantial hike in your taxes.


You can either pay for your Texas property in cash, or get a mortgage through a lending institution. Most of the time your local bank isn’t going to have as good of rates as an outside lender. Always shop for the best rates.  Your REALTOR should be able to recommend a few good lenders. You will need a pre qualification letter to have a seller consider any offer you place on a home.  It’s always good to take care of this at the beginning of your search.


You will have two checks you will write after making an offer on a property.  You will have earnest money which is typically 1% of the purchase price and an option check. The option check is typically a few hundred dollars which gives you the option to terminate the contract in the first X amount of days. This is the time you will get your inspection done and ask for any major repairs.

Capital Gains Tax


When you sell – In most cases you will not have to pay capital gains tax on a personal property. However on an investment property you will. There are ways around this such as a 1031 exchange. For more information visit our article on Capital Gains Tax

Legal Stuff

You may have an attorney look over the contracts. However in Texas, the Texas Real Estate Commission has standard contracts that are widely used. In most transactions the buyer and seller do not retain an attorney.

Closing Costs


A lot of people are confused on what closing costs are or how much they are. They’ve heard rumors of the seller paying all the closing cost or vice versa. This almost never happens.  For a breakdown of all the possible costs incurred in a closing, visit our Closing Costs in Texas page.

The Real Estate Market

Texas did not get hit as hard as some parts of the United States during the Great Recession. The market did slow but came back extremely strong. For the past 3 or 4 years there has been a steady appreciation in home values and at the time of writing this article we are in a strong sellers market due to the amount of people moving to Texas for the cheap land and great economy. For this reason you don’t see as many foreclosures here.

Questions? Need Help?

We love to help non-residents buy property in Texas. If you’re thinking of buying property here, don’t hesitate to get in touch!

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