How to Buy a House in Texas

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• 🏡 26% of first-time homebuyers in 2023 relied on financial help from family or friends to afford a down payment.
• 📉 A 1% lower mortgage rate can save buyers over $2,000 per year on a $300,000 loan.
• ⚖️ New NAR rules in 2024 now require written buyer-broker agreements. This changes how commissions are negotiated.
• 🧾 Texas homebuyers should plan for closing costs. These are 2–5% of the purchase price and are in addition to your down payment.
• 💵 Commission rebates are 100% legal in Texas and can save you thousands at closing.

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📍 Find Your State

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How to Buy a House in Texas in 2025: An 11-Step Guide + Savings Tips

Buying a house in Texas in 2025 means dealing with a changing real estate market. With the state’s median home price at $339,300 and a balanced market offering more negotiating power, understanding Texas-specific strategies is crucial. Commission rebates are fully legal in Texas, and combined with state programs like My First Texas Home and Home Sweet Texas Home, you can save thousands. This guide walks you through buying a home in the Lone Star State, from getting ready financially to closing day in cities like Houston, Dallas-Fort Worth, Austin, and San Antonio.

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Step 1. Save for a Down Payment in Texas

Saving for a down payment is the first big step in buying a house in Texas. In 2025, with the state’s median home price at $339,300, you’ll need strategic planning. Texas has no state income tax, which helps you save faster, but home prices in markets like Austin and Dallas-Fort Worth require significant cash. Inventory has increased 30.7% from last year, creating better opportunities for prepared buyers.

Loan Type	Minimum Down Payment	Recommended Credit Score
Conventional	3–5%	620+
FHA	3.5%	580+ (or 500 w/ 10% down)
VA	0%	620+
USDA	0%	640+

💡 What it means for Texas buyers: On a $339,300 home (Texas median):

• 3% down = $10,179
• 5% down = $16,965
• 10% down = $33,930

This amount does not cover closing costs, inspections, or money for emergencies. Many Texas lenders suggest you plan for another 2–5% of the home’s price.

Texas offers excellent down payment assistance (DPA) programs through multiple agencies:

• My First Texas Home – Up to 5% assistance for first-time buyers and veterans (forgivable or grant)
• Home Sweet Texas Home – Up to 5% for low-to-moderate income families (grant or deferred forgivable loan)
• Homes for Texas Heroes – 3-5% for teachers, police, firefighters, veterans, and EMS (grants or forgivable second mortgages)
• My Choice Texas Home – Up to 5% for repeat buyers statewide
• Houston Homebuyer Assistance – Up to $50,000 forgivable loan
• Austin Down Payment Assistance – Up to $40,000 forgivable loan
• Dallas Homebuyer Assistance – Varies by program
• Fort Worth Program – Up to $25,000 for down payment and closing costs

Most Texas programs require a minimum 620 credit score and completion of a homebuyer education course. You can combine these programs with commission rebates (see Step 10) to maximize your savings.

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Step 2. Get Pre-Approved for a Mortgage in Texas

Before you start house hunting in Texas, getting a mortgage pre-approval is very important. It tells you how much you can afford in Texas’s diverse markets—from affordable markets like San Antonio ($255,000 median) to pricier Austin areas. And it shows sellers you are a serious buyer in Texas’s increasingly balanced market.

To get pre-approved, you’ll submit:

• The last 2 years of tax returns and W-2s
• 2–3 months of recent pay stubs
• Credit report (lender will request)
• Asset and bank statements

☑️ A strong credit score helps you qualify for lower rates. Small credit improvements now can save thousands later in Texas’s market:

• Raising your score from 650 to 700 could reduce your interest rate by 0.5%–0.75%, potentially saving you over $100/month on your mortgage payment on a $339,300 home.

🛑 Avoid these mistakes:

• Opening new credit cards during mortgage evaluation
• Making major purchases (e.g., car or furniture)
• Switching jobs suddenly without informing your lender

Important for Texas buyers: If you plan to work with an agent who offers commission rebates (legal in Texas!), confirm your lender allows rebates. Most Texas lenders accept rebates, but always verify upfront to avoid issues at closing.

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Step 3. Find a Local Real Estate Agent in Texas

As of 2024, real estate rules are now stricter in Texas: you must sign a buyer-broker agreement before submitting offers. These new rules come from the National Association of Realtors (NAR). They focus on being clear about how agents get paid. Importantly, Texas allows commission rebates, giving you a significant advantage.

🔍 What to look for in a Texas agent:

• 🗺️ Knows Texas’s local markets very well (Houston, DFW, Austin, San Antonio, etc.)
• 💬 A good negotiator who can win offers in Texas’s balanced market
• 💸 Offers commission rebates (100% legal in Texas!)
• 🔑 Can find private listings, off-market deals, and rebate-friendly Texas lenders

Ask your Texas agent:

• “What percentage commission rebate do you offer to buyers?”
• “Will the rebate be applied as a closing cost credit or cash at closing?”
• “Do you work with Texas lenders who accept commission rebates?”
• “What neighborhoods in [Houston/Dallas/Austin/San Antonio] offer the best value?”

Understanding Commission Rebates in Texas:

Texas is one of 40 states where commission rebates are 100% legal and supported by the U.S. Department of Justice. When you work with a rebate agent in Texas, they share a portion of their commission with you at closing.

For example, on a $339,300 home where the buyer agent earns 3% commission ($10,179):

• A 1% rebate = $3,393 back to you
• A 1.5% rebate = $5,090 back to you
• A 2% rebate = $6,786 back to you
• Some Texas agents offer up to 2.5% rebates on new construction

The rebate appears as a credit at closing and can be used for:

• Reducing closing costs
• Covering moving expenses
• Buying down your interest rate
• Cash back after closing (lender-permitting)

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Step 4. Start House Hunting in Texas

Once you have a Texas agent and pre-approval, you can start looking at homes. In 2025, Texas’s market shows 5-7.15 months of inventory with a median sale price of $339,300. Homes in Texas average 51-77 days on market, and 65.7% of closed sales included price cuts—giving buyers significant negotiating power.

🎯 Focus on Texas priorities:

• Location – Texas’s major metros (Houston, DFW, Austin, San Antonio) vs. affordable markets (Wichita Falls, El Paso, Abilene)
• Property taxes – Texas has high property taxes (2-3% annually) but no state income tax
• Commute – Texas cities are sprawling; consider I-35, I-45, I-10, Loop 610, and highway access
• Schools – Texas districts vary widely; check ratings carefully
• HOA rules – Very common in Texas subdivisions; review restrictions

📍 Texas Market Conditions by Metro (2025):

• Dallas-Fort Worth: Diverse pricing; strong market with good inventory
• Houston: More affordable than Austin/Dallas; good value
• Austin: Cooling from peak; still pricier but improving for buyers
• San Antonio: Affordable median around $255,000; steady market
• El Paso: Very affordable at $259,000 median
• Corpus Christi: Coastal market with unique considerations

✅ Texas-specific things to check:

• Property condition (Texas heat and storms can damage roofs and HVAC)
• HVAC age and condition (critical in Texas’s extreme summer heat)
• Foundation (Texas clay soil causes major foundation issues)
• Flood zone status (important near Gulf Coast and rivers)
• Property taxes (can vary 1-3% annually by county)
• HOA fees and rules (common in Texas; budget accordingly)
• Hurricane/wind resistance (for coastal Texas properties)

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Step 5. Make an Offer in Texas

When you find the right home in Texas, your agent helps you make an offer. In Texas’s current market (5-7 months inventory), buyers have strong negotiating power. With 65.7% of sales including price cuts averaging $11,500-$15,100, and only 10.7% of homes selling above list price, this is an excellent time for Texas buyers.

💵 Texas offer components:

• Purchase price – Based on Texas comps and recent sales
• Earnest money deposit – Typically 1-2% in Texas ($3,393-$6,786 on median home)
• Option period – Texas-specific: typically 7-10 days with $100-$500 option fee for unrestricted termination right
• Contingencies – Inspection, appraisal, financing, and sale of current home
• Closing date – Usually 30-45 days in Texas
• Seller concessions – Can include closing costs, repairs, or home warranty

🏆 Ways to make your Texas offer stronger:

• Higher earnest money – Shows commitment in Texas’s market
• Reasonable option period – Texas sellers appreciate 7-day vs. 14-day periods
• Strong pre-approval letter – From reputable Texas lender
• Flexible closing date – Work with seller’s Texas moving timeline
• Waive minor repairs – Focus only on major Texas-specific issues (foundation, roof, HVAC)

⚖️ Understanding how your rebate works in the Texas offer:

Your commission rebate doesn’t affect the purchase price or seller. The seller pays the buyer agent commission as agreed, and your agent then rebates a portion to you at closing. This is completely transparent and legal in Texas under TREC regulations.

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Step 6. Schedule a Home Inspection in Texas

After your Texas offer is accepted, schedule a home inspection during your option period (typically 7-10 days in Texas). A good inspection costs $300-$500 in Texas and can save you thousands by finding hidden issues before you commit. The option fee ($100-$500) gives you the unrestricted right to terminate during this period—a unique Texas advantage.

🔍 Texas-specific inspection priorities:

• Foundation – Texas’s expansive clay soil causes major foundation problems; this is THE critical Texas inspection item
• Roof – Texas hailstorms and heat damage roofs; check for wind and hail damage
• HVAC system – Critical in Texas’s 100°F+ summers; verify age and condition
• Plumbing – Check for polybutylene pipes, slab leaks common in Texas
• Electrical – Older Texas homes may need panel upgrades for AC load
• Drainage – Texas flash floods require proper grading and drainage
• Termites/wood-destroying insects – Very common in Texas; separate WDO inspection required by most lenders
• Mold – Texas humidity creates mold issues; check thoroughly
• Pool/spa equipment – If present; important in Texas

🏠 After the Texas inspection:

• Review the report – Your Texas agent helps prioritize issues
• Request repairs – Focus on major Texas issues (foundation, roof, HVAC, drainage)
• Renegotiate price – If Texas inspection reveals major problems like foundation damage
• Ask for credit – Texas sellers may prefer giving money for you to handle repairs yourself
• Terminate if needed – Use your Texas option period to walk away if problems are too severe

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Step 7. Get a Home Appraisal in Texas

Your Texas lender orders an appraisal to make sure the home is worth what you are paying. This protects both you and the lender. In Texas, appraisals typically cost $400-$600 and are paid by the buyer.

📊 What Texas appraisers check:

• Home’s size, condition, and features
• Recent sales of similar Texas homes nearby (comps)
• Texas market trends and neighborhood
• Any Texas-specific issues (foundation problems, flood zones)
• Property tax assessments (Texas has high property taxes)

⚠️ If your Texas home appraises low:

• Pay the difference – If you have extra cash and love the Texas property
• Renegotiate price – Ask Texas seller to lower price to appraised value
• Meet in the middle – Split the difference with Texas seller
• Challenge the appraisal – If you think Texas appraiser made errors or missed good comps
• Walk away – Use appraisal contingency to cancel without penalty

In Texas’s current market with prices down 1.4% year-over-year and significant price reductions common, low appraisals are happening more frequently. This strengthens your negotiating position.

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Step 8. Finalize Your Texas Mortgage

After the appraisal, your Texas lender will process your loan through underwriting. The underwriter reviews all your documents to make sure you can afford the mortgage. This takes 1-3 weeks in Texas.

📋 Texas underwriting process:

• Verify your Texas employment and income
• Check your credit again
• Review all Texas financial documents
• Confirm the Texas home’s value and condition
• Verify commission rebate is lender-approved (if applicable)
• Make sure you meet Texas lending requirements

🛑 Don’t do these things during Texas underwriting:

• Make large purchases or take on new debt
• Change jobs or quit
• Move money between Texas bank accounts without explanation
• Miss any bill payments
• Open or close credit accounts

For Texas DPA program buyers: Your lender will coordinate with TDHCA (Texas Department of Housing and Community Affairs) or TSAHC (Texas State Affordable Housing Corporation) to finalize your assistance. Make sure all your homebuyer education certificates are submitted on time.

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Step 9. Get Homeowners Insurance in Texas

Before closing in Texas, you must have homeowners insurance. Texas lenders require proof of insurance to protect their investment. In Texas, expect to pay $1,800-$3,500 per year for homeowners insurance—higher than the national average due to hurricanes, hail, and tornadoes.

🏠 Texas homeowners insurance covers:

• Dwelling – Rebuilding your Texas home if destroyed
• Personal property – Your belongings inside
• Liability – If someone gets hurt on your Texas property
• Additional living expenses – If you can’t live in your Texas home during repairs

🌪️ Texas-specific insurance considerations:

• Wind/hail coverage – Essential in Texas; verify coverage amounts and deductibles
• Flood insurance – NOT covered by standard policies; separate policy required for flood zones (critical near Gulf Coast)
• Hurricane deductible – Coastal Texas may have separate hurricane deductibles (1-5% of dwelling coverage)
• Foundation coverage – Texas foundation issues; check exclusions carefully
• Texas Windstorm Insurance Association (TWIA) – For coastal properties that can’t get standard coverage

💡 Shop around for Texas insurance:

• Get quotes from at least 3 Texas insurers
• Major Texas insurers: State Farm, Allstate, USAA, Farmers, Liberty Mutual
• Ask about bundling with auto insurance for Texas discounts
• Consider higher deductibles to lower premiums in Texas
• Check for discounts (impact-resistant roof, security systems, etc.)

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Step 10. Maximize Your Commission Rebate in Texas

Texas is one of 40 states where commission rebates are 100% legal and encouraged by the U.S. Department of Justice. This gives Texas buyers a significant advantage—you can save thousands at closing just by working with the right agent.

💰 How Texas Commission Rebates Work:

When a home sells in Texas, the buyer’s agent typically receives 2.5-3% of the sale price as commission. A rebate agent shares a portion of their commission with you at closing. According to the Texas Real Estate Commission (TREC), this is completely legal and must be disclosed in writing to all parties.

Example on a $339,300 Texas home:

Buyer Agent Commission (3%)	Rebate Amount	You Save
$10,179	1% ($3,393)	$3,393 at closing
$10,179	1.5% ($5,090)	$5,090 at closing
$10,179	2% ($6,786)	$6,786 at closing

Some Texas agents offer up to 2.5% rebates on new construction homes, which could save you $8,483 on a $339,300 purchase.

💡 Ways to Use Your Texas Rebate:

• Reduce closing costs – Apply directly to title fees, lender fees, etc.
• Buy down interest rate – Purchase discount points for lower rate
• Cover moving expenses – Offset costs of moving to Texas
• Home improvements – Use for immediate repairs or upgrades
• Cash at closing – Receive as cash after closing (lender-permitting)

🔍 Finding Texas Rebate Agents:

• Search for “Texas buyer rebate agents” or “[City] home buyer rebate”
• Ask agents upfront: “What rebate percentage do you offer?”
• Get the rebate percentage in writing in your buyer-broker agreement
• Verify your lender accepts rebates (most Texas lenders do)
• Texas rebate appears on your closing statement as a credit

⚖️ Texas Legal Requirements:

Per TREC Rule 535.147(d), agents can rebate all or a portion of their commission to the party they represent. The rebate must be:

• Disclosed in writing to all parties in the transaction
• Documented in the buyer-broker agreement
• Approved by your lender (if financing)
• Shown on the closing statement (HUD-1 or Closing Disclosure)

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Step 11. Close on Your Texas Home

The final step is closing on your Texas home. This is when ownership officially transfers to you. Texas closings typically happen at a title company and take 1-2 hours.

📋 Before your Texas closing:

• Final walkthrough – Make sure the Texas home is in agreed condition
• Review closing disclosure – Check all Texas fees, commission rebate, and numbers (sent 3 days before closing)
• Wire closing funds – Texas title companies prefer wire transfers for security
• Verify commission rebate – Confirm rebate amount appears correctly on closing disclosure
• Bring photo ID – Texas driver’s license or government ID required

💵 Texas closing costs typically include:

• Lender fees (origination, underwriting, points)
• Title insurance and search fees in Texas
• Texas recording fees and transfer taxes (vary by county)
• Attorney fees (if used; not required in Texas)
• Property taxes (prorated for your Texas county)
• Homeowners insurance premium (first year in Texas)
• HOA fees (if applicable in your Texas community)
• LESS: Your commission rebate credit

Total Texas closing costs: Expect 2-5% of purchase price. On a $339,300 home, that’s $6,786-$16,965. Your commission rebate significantly offsets these costs. With a 1.5% rebate ($5,090), your net closing costs drop to $1,696-$11,875.

🏠 At your Texas closing:

• Sign all Texas legal documents (deed of trust, promissory note, etc.)
• Review your Texas closing disclosure line-by-line
• Verify commission rebate credit is properly applied
• Pay remaining Texas closing costs (net of rebate)
• Get the keys to your Texas home!

✅ After Texas closing:

• Set up utilities in your Texas home
• Change locks for Texas security
• Update your address with USPS and Texas DMV
• File homestead exemption with Texas county (reduces property taxes)
• Keep all Texas closing documents safe
• If you received cash rebate, expect it within 1-2 days after closing