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First-time home buying in Texas: how it actually works
Texas runs its transactions differently than the internet's generic advice assumes — an option period instead of open-ended contingencies, title companies instead of closing attorneys, surveys that can make or break timelines. Here's the process in order, with the Texas-specific parts flagged.
The sequence
1. Financing first. A real preapproval (documents reviewed, not a 60-second prequal) sets your range — sanity-check it against the local-tax affordability math — and check assistance programs before choosing a lender, since program loans run through participating lenders.
2. Offer + earnest money + option fee. Texas contracts (standard TREC forms) involve two checks: earnest money (commonly ~1% of price, credited at closing, held by the title company) and the option fee — a small payment (often $100–$500) buying the option period.
3. The option period — Texas's signature feature. A negotiated window (commonly 7–10 days) during which you can terminate for any reason and keep your earnest money. This is when everything happens: general inspection, any specialty inspections (foundation is the Texas classic), and repair negotiations. The deadlines are hard — calendar them the day the contract executes.
4. Appraisal, title & survey. The lender orders the appraisal; the title company searches ownership history and issues title insurance (Texas rates are state-regulated). The survey maps the property's boundaries and easements — sellers often provide an existing one with a T-47 affidavit; if not, a new survey takes time, so it's a week-one task, not a week-four one.
5. Closing. Final walkthrough, a Closing Disclosure you get three days before signing (compare it to your Loan Estimate line by line), then the title company runs the signing — wire your funds only using instructions verified by phone at a number you found independently; wire fraud targets exactly this moment.
New construction variant: builder contracts are NOT standard TREC forms and often reshape these protections — longer timelines, builder-drafted terms, incentives tied to preferred lenders. Read the Builder Incentive Index for what's being offered and the community field notes for what to check, and note that after closing, year-two taxes on a new build commonly jump 30–50% when the improved value is first fully assessed.
Quick answers
How much cash do I actually need?
Down payment + closing costs (commonly 2–4% of price in Texas) + earnest money and option fee up front (returned/credited if all goes well) + moving and reserves. On a $360K first home with 5% down, plan roughly $28–35K all-in — less with assistance programs.
What credit score do I need?
Conventional loans generally want 620+, FHA can go lower, and pricing improves meaningfully into the 700s. If you're building toward it, the second-chance renting guide's credit-building content applies to buying too.
Do I need a real estate agent?
Buyer representation is your choice; representation agreements and compensation are negotiated up front in Texas. Whatever you decide, understand that a builder's sales office and the listing agent represent the seller's interests — bring your own scrutiny or your own representation.
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