First-Time Home Buyer Guide for Texas

The eight steps

1. Check your credit and your budget. Pull your credit reports and decide what monthly payment you're comfortable with, including taxes, insurance and HOA dues. See what credit score you need and how much money you need.
2. Get pre-approved. A lender reviews your credit, income and assets and tells you how much you can borrow. Sellers expect a pre-approval letter with your offer.
3. Look into down payment assistance. Texas programs and county programs can cover your down payment. Ask your lender which ones you qualify for before you shop. See financing and assistance.
4. Choose your Realtor. Before you tour homes, you'll sign a written buyer representation agreement that spells out what your agent does and how they're paid. A full-time Realtor works in your interest and can recommend lenders, inspectors, insurance agents and title companies.
5. Find your home. Compare neighborhoods, commutes, schools, flood risk, HOA rules and total monthly cost, not just the price.
6. Make an offer. In Texas, your offer uses the state's standard contract. Within 3 days of acceptance, you deliver earnest money (often about 1% of the price) and an option fee to the title company. The option fee buys you a short option period when you can back out for any reason.
7. Inspect and appraise. Get a professional inspection during the option period and negotiate repairs or credits. Your lender orders the appraisal to confirm the home's value.
8. Close — then file your homestead exemption. Do a final walkthrough, sign at the title company and get your keys. Afterward, file your homestead exemption with your county appraisal district; nobody files it for you. See closing costs in Texas.

Buying new construction as a first-time buyer

• Bring your own Realtor. The builder's on-site agent represents the builder, not you.
• Finished "inventory" homes can come with price reductions and incentives toward closing costs, especially when a builder is closing out a section.
• Builder incentives tied to the builder's preferred lender can be worth less than they look; compare the full loan cost.
• Get an inspection even on a brand-new home.
• Plan to stay at least three to five years. While the builder is still selling new homes nearby, a resale can be hard to price.

Mistakes first-time buyers make

• Shopping before getting pre-approved.
• Opening new credit or changing jobs during the loan process.
• Skipping the inspection to make an offer more attractive.
• Budgeting only for principal and interest and forgetting Texas property taxes, insurance, HOA and MUD taxes.
• Forgetting to file the homestead exemption after closing.

Frequently asked questions

Keep learning

• How much money do you need? →Your total cash to close.
• What credit score do you need? →Minimums by loan type.
• Financing and down payment assistance →Loans and Texas programs.
• Free home buyer webinar →Natalie walks through cash to close, live.