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Home Buying Basics in Texas

By Marcia Stewart, Co-Author of Nolo's Essential Guide to Buying Your First Home and Every Landlord's Legal Guide
Buying a house in Texas? Here are some key issues you need to know about.

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Buying a house is a significant event. Before you make this important purchase, take the time to determine what you can afford, the ideal neighborhood, and what features you need or want in a home. With proper preparation, careful choice of a real estate agent, and prudent use of other qualified professionals, buying a home in Texas can be a positive experience.

Advantages of Working With a Real Estate Agent in Texas

A good real estate agent should be familiar with local market conditions and prices in order to help you find a home that meets your budget and needs. Your agent will help you every step of the way, from drafting your written offer and negotiating with the seller on price and other key terms to coordinating the escrow process and house closing. Your real estate agent should also help you locate other professionals to assist you in the homebuying process, including mortgage brokers and home inspectors.

And the good news is that working with a real estate agent won’t cost you anything. The seller usually pays the entire real estate commission (typically 5% to 6% of the house sale price, split between the seller’s agent and yours).

Personal referrals are usually the best way to select a real estate agent. You can also search for licensed real estate agents on the Texas Real Estate Commission’s website. Other useful resources include real estate websites such as Zillow and Trulia which have customer reviews of agents.

Be sure the agent you choose has experience representing buyers, good references, and qualifications to meet your housebuying needs in terms of your ideal location, type of property, and budget.

Seller Disclosure Requirements in Texas

State law requires sellers of real estate to make a number of specific disclosures regarding the condition of the property, containing all of the information set forth in the Texas Real Estate Commission's disclosure form. This is important for you as a buyer, since just looking at a property may not be enough to tell you what problems its owner encountered with it while living there.

The form requires the seller to list various features and equipment contained in the home and to state whether any known defects exist. See Considerations Before Selling a House in Texas for more details on seller disclosures.

Buyers should not rely solely on the seller's disclosure, however, but should hire an independent home inspector to verify the information from the seller's disclosure. Many buyers make their offer contingent upon a satisfactory inspection report. See What You Need to Know About Home Inspections When Buying a House for more details.

Real Estate Purchase Agreements in Texas

A real estate contract must be in writing and signed by the parties (buyers and sellers) to the contract. It must contain an offer to sell or purchase, an acceptance of the offer, the sale price, and an adequate description of the property. Texas real estate agents must use a real estate contract form approved by the Texas Real Estate Commission.

Title Issues in Texas

A buyer should always obtain a title search from a title company before purchasing a home. The title company searches public records and other sources for any liens, easements (such as the utility company’s right to access part of the property), or other encumbrances or title restrictions that may affect the property. If the title search locates problems, the buyer should require the seller to correct those problems as a condition to closing.

You should also consider purchasing a title insurance policy to protect the title to the property against adverse claims by third parties, or any clouds on the title missed by the title search. Mortgage companies usually require buyers to purchase a title insurance policy in connection with obtaining a mortgage.

For more details on title insurance, escrow, and closing, see Sandy Gadow’s website, Buying, Selling, and Closing Simplified, which includes a state-by-state guide to closing practices.

Working With a Lawyer in Texas

Unlike some states, Texas does not require that buyers involve a lawyer in the house-buying transaction. Even if it’s not required, you may decide to engage a lawyer at some point in the process—for example, if you are buying property in a planned unit development with extensive CC&Rs or you are purchasing a house jointly with others and need help structuring your co-buyer agreement. Or, you may want a lawyer’s help if problems show up during escrow or the house closing.

Check out Nolo’s Lawyer Directory, to find an experienced real estate attorney in Texas.

More Information on Buying a House

The Buying a House section on Nolo.com includes a variety of useful articles on all aspects of the house buying process, including advice on getting a mortgage, figuring out what price, contingencies, and other terms to offer, arranging home inspections, and closing the deal.

For detailed information on every phase of buying a home, from figuring out your needs and what you can afford to doing the final walkthrough and attending the closing, see Nolo’s Essential Guide to Buying Your First Home, by Ilona Bray, Alayna Schroeder, and Marcia Stewart.

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