The Texas Home Buying Process

Whether it is your first home or your tenth home, a retirement home, or an investment property its important to understand the process.

Purchasing a home is a very important decision and a big undertaking in your life. In fact, most people only choose a few homes in their lifetime. One of my number one goals is to make sure that you are well equipped and armed with up-to-date information for your big decision. I am prepared to guide you through every phase of the home-buying process. This guide gives you helpful information to reference during your transaction.

Step One, Know your Options!!!

  • Pay Cash
  • Conventional Financing with 3% down or more
  • Govenrnment Backed Loans FHA/VA/USDA 0-3.5% down
  • Specialty Programs for Teachers, Doctors, First Responders ect...

Step Two, Begin the Loan Approval Process

Meet with a lender or mortgage broker to determine how much house you can afford. Obtain Pre-approval for the loan amount you need. This sill save time in the home search, and improve your negotiating position with home sellers.

Step Three, The Home Search

Start by deciding which neighborhoods you want to live in and weather you want a new or existing home. Here is where a good Realtor can help match your needs to the right area and available homes.

Step Four, Make an Offer

When you find a home, we will review market conditions and decide wether to present an aggressive or competitive offer. I will explain all documentation and ensure the terms are in your best interest. The process may go back and forth a few times between parties.

Step Five, Under Contract !!!!

After final acceptance of the contract from both parties you go "under contract". At this time you'll provide an "earnest money" check to the title company to open escrow and provide an "option check" to the seller for an option/discovery period.

Step Six, Inspections, Repairs and Discovery

Now begins the negotiated option period, Usually 7-10 days. Inspections are performed to ensure the property is right for you and there are no deal killer big ticket items that will be a problem for you. Contract details such as repairs are further negotiated. During this time its good to get quotes and investigate on things that might effect your cost of ownership so you are fully informed before moving forward.

Step Seven, The Calm Period

A lot of things happen in the background during this period between your agent, the title company and the lender. Final details are handled and documentation is processed. The lender will need a lot of documentation from you, the title company will provide a commitment for title insurance for you to review, and you will need to get quotes on homeowners insurance.

Step Eight, The Closing and Funding

Once we have been cleared to close we will set an appointment to sign all the final documentation at the title company. You will have a few options for getting your funds to title such as a cashiers check or a wire. You will need to bring a current picture ID to the closing. Once all the documents are scanned in and processed the Title company will begin the funding process. This will happen generally within a few hours. Once the Funding process is complete the home is yours. Yea!!!!!

The Life of a Real EstateTransaction

Below is a diagram of the home buying and selling processes. I'd like to mention that in order for you to move in to your home, a lot of coordination and cooperation will happen between you, the seller, the loan officer, title company and the agents. A successful Real Estate transaction is a team effort!!

  1. 1

    Title Check

    Their primary purpose is to get a preliminary title report, which is used to confirm that the seller is the legal owner of record of the property and that there are no unsettled liens or other claims against the property, including all real estate taxes and special assessments.

  2. 2

    Appraisal of Property

    the lender will arrange for the property to be appraised. The appraiser's report will describe the physical characteristics of the property and comparable property values will be used to determine the value of the property.

  3. 3

    Loan Approval

    once all of the necessary steps are completed, the buyer's lender will notify the title company that the buyer's loan request has been approved. The lender will send the buyer's loan documents to the title company so that the documents can be signed at the closing appointment, which can also be called the "sign-off" .


“No Surprises”, What You Can Expect To Have To Pay For

Earnest Money: 

In Austin 1% of the sales price is customary but not always necessary. For example: on a $300,000 house you would give the title company $3,000 to open up escrow. This money is credited to you at closing as a portion of your closing costs or down payment. Earnest Money is refundable based on provisions in the purchase contract.

Option Money: 

Depending on the price of the home this can vary and it's completely negotiable but is customarily around $250 for a 7-10 day option period on a $300,000 purchase. The option period gives you time to have the property inspected and negotiate any repairs that are needed. This time period gives you the right to terminate the contract if necessary and receive your earnest money back.


During the option period you will hire an inspector to look at the property. Depending on how large the home is and the age the price will vary. Most of the time an inspection will run around $400-600 depending on age, size and complexity. You can also add a pest/termite, pool/spa, septic, or sprinkler system inspections as needed for additional cost.


The survey customarily is purchased by the buyer but is a negotiable item. A survey typically costs $450. The seller sometimes has an existing survey we can use so we don’t have to order one.


An appraisal of the property typically costs between $450 and $550. Your lender will usually ask for this to be paid for in advance.

Closing Costs: 

These costs are made up of several things such as Escrow Fees, Lender Charges, Prepaid Interest, Taxes and Insurance. Closing costs will vary from 2% to 6% of a purchase amount depending on the time of year and the loan program you are using. You should get a good faith estimate from your lender breaking down all costs involved with your purchase. These costs can be paid at closing or some can be rolled into your financing.

The Home Inspection

Buying a home is one of the most significant decisions and one of the biggest investments you will ever make. A home inspection will give you a clear, unbiased evaluation of a home's condition, answer any questions you may have, and help give you peace of mind. There are numerous types of inspections. An inspection is meant to evaluate, at minimum, the structural and mechanical condition of a property. It is not the same as an appraisal which evaluates the market value of a property. Persons involved in real estate transactions need unbiased information about the physical condition of property they plan to buy or sell and your contract should include a contingency that you obtain a satisfactory inspection report.

What the inspection, at minimum, includes

  • Foundations
  • Plumbing and electrical systems
  • Doors
  • Ceiling, walls and Floors
  • Roof
  • Hazardous materials concerns
  • Heating and air conditioning systems
  • Insulation
  • Ventilation

Energy Audits

The Energy Conservation Audit and Disclosure Ordinance was approved by Austin City Council in November 2008 and was enacted June 1st Austin is the first city in the U.S. to require an energy audit during the selling process. Homeowners are not required to make suggested improvements, but it could become an important bargaining chip in the buying process. If a home needs an audit, the seller must provide a copy of the audit to the purchaser or prospective buyer. The auditor must provide a copy of the audit to Austin Energy.