Buying a home in Texas is different from buying in most other states. The contracts are standardized by the Texas Real Estate Commission. There is an option period that gives buyers a unique right to walk away. Earnest money rules, title company procedures, and property tax structures all follow Texas-specific conventions. Whether you are a first-time buyer, a military family relocating to Fort Bliss, or an out-of-state transplant drawn by the lack of state income tax, understanding the Texas process from start to finish will save you time, money, and stress.
Step 1: Get Pre-Approved for a Mortgage
Before you start looking at homes, get pre-approved by a mortgage lender. Pre-approval is different from pre-qualification. Pre-qualification is a rough estimate based on self-reported income. Pre-approval involves a lender pulling your credit, verifying your income and assets, and issuing a letter stating the specific loan amount you qualify for. In Texas's competitive markets, sellers and listing agents take pre-approved buyers far more seriously than those without one.
To get pre-approved, you will need your last two years of tax returns, recent pay stubs, bank statements for the past two to three months, and a valid ID. The lender will review your debt-to-income ratio, credit score, and employment history. Most conventional loans require a minimum credit score of 620, though FHA loans can go as low as 580 with a 3.5 percent down payment. VA loans — available to active-duty military and veterans — require no down payment at all and have no private mortgage insurance, making them one of the best financing options available, particularly for buyers near Fort Bliss.
Step 2: Find a Real Estate Agent
In Texas, buyers typically work with their own agent, separate from the seller's listing agent. Your buyer's agent represents your interests, helps you find properties, writes and submits offers, negotiates on your behalf, and guides you through the closing process. Since the 2024 NAR settlement, buyer agent compensation is no longer automatically offered through the MLS — you may need to negotiate this as part of your offer or pay your agent directly.
Look for an agent who specializes in the area where you want to buy. Ask how many transactions they have closed in the past year, whether they are familiar with the specific neighborhoods you are targeting, and how they communicate with clients. A good buyer's agent will save you money through skilled negotiation and protect you from costly mistakes. ProGen Real Estate works with buyers throughout El Paso and surrounding areas, providing local expertise and honest guidance at every step of the process.
Step 3: Search for Properties and Make an Offer
Once you are pre-approved and have an agent, the search begins. Your agent will set you up with MLS alerts based on your criteria — price range, location, bedroom count, lot size, and any specific features you need. In Texas, you will also want to pay attention to property tax rates, which vary significantly by county, city, and school district. A home in El Paso County might have a different effective tax rate than one just across the line in Dona Ana County, New Mexico.
When you find a home you want, your agent will prepare an offer using the TREC One to Four Family Residential Contract. This is a standardized form used statewide — agents cannot use custom contracts in Texas for residential transactions. Your offer will include the purchase price, financing terms, proposed closing date, option period terms, and earnest money amount. It may also include contingencies such as a financing contingency or a requirement that the seller complete specific repairs.
Step 4: The Option Period — Unique to Texas
The option period is one of the most important features of the Texas real estate process, and it does not exist in most other states. When you sign the contract, you pay the seller a small option fee — typically between $100 and $500 — which buys you an unrestricted right to terminate the contract for any reason during a specified number of days, usually 7 to 10.
During the option period, you conduct your home inspection, review the seller's disclosure, get repair estimates, and decide whether you want to proceed. If anything comes up that you are not comfortable with — major foundation issues, a failing roof, outdated electrical — you can terminate the contract and walk away. You lose only the option fee. This is a powerful buyer protection that gives you time to do thorough due diligence before you are locked in.
The option fee is negotiable. In competitive situations, buyers sometimes offer a higher option fee or a shorter option period to make their offer more attractive. The option fee is typically credited toward the purchase price at closing if you proceed with the sale.
Step 5: Earnest Money Deposit
Separate from the option fee, you will also submit an earnest money deposit — typically 1 to 2 percent of the purchase price. In El Paso, on a $275,000 home, that means $2,750 to $5,500. Earnest money is deposited with the title company within a few days of the executed contract and signals to the seller that you are serious about the purchase.
If the transaction closes, your earnest money is applied to your down payment or closing costs. If you terminate during the option period, you get your earnest money back (you only lose the option fee). If you default on the contract outside the option period without a valid contingency, you could forfeit your earnest money to the seller. This is why understanding your contract timelines and contingencies is critical.
Step 6: Home Inspection and Repairs
Schedule your home inspection as soon as possible after the contract is executed — ideally within the first few days of the option period so you have time to review the report and negotiate if needed. In Texas, home inspectors must be licensed by TREC. A standard inspection covers the structure, foundation, roof, plumbing, electrical, HVAC, and major systems. In El Paso, also pay attention to stucco condition, evaporative cooler functionality, and any signs of foundation shifting common in the region's expansive clay soils.
After the inspection, you can request repairs or credits from the seller. The seller is not obligated to agree, but most transactions involve some level of negotiation. Common repair requests in El Paso include HVAC servicing, roof repairs, plumbing fixes, and electrical updates. Your agent will help you determine which items are worth negotiating and which are cosmetic issues that you can handle after closing.
Step 7: Title Company and Title Search
In Texas, the closing process is handled by a title company — not an attorney, as in some other states. The title company conducts a title search to verify that the seller has clear ownership and that there are no outstanding liens, judgments, or encumbrances on the property. They also issue a title commitment, which is essentially a promise to insure the title once the transaction closes.
Title insurance in Texas is regulated and the rates are set by the Texas Department of Insurance, so the cost is the same regardless of which title company you use. The seller typically pays for the owner's title policy, while the buyer pays for the lender's title policy. Review the title commitment carefully — it will list any exceptions to coverage, such as easements, deed restrictions, or HOA obligations that will transfer with the property.
Step 8: Survey and Appraisal
Your lender will order an appraisal to confirm that the home's value supports the loan amount. An independent, licensed appraiser visits the property, compares it to recent comparable sales, and issues an opinion of value. If the appraisal comes in at or above the contract price, you proceed normally. If it comes in low, you have several options: negotiate a lower price with the seller, make up the difference in cash, challenge the appraisal with additional comparable sales, or terminate the contract if you have a financing contingency.
A property survey is also standard in Texas transactions. The survey confirms the legal boundaries of the property, identifies any encroachments (fences, structures, or driveways that cross property lines), and shows the location of easements. Existing surveys can sometimes be reused if they are recent and the property has not been modified, which saves the buyer $400 to $600. Your title company will advise on whether a new survey is required.
Step 9: Final Walkthrough and Closing
Before closing, schedule a final walkthrough of the property — typically the day before or the morning of closing. This is your opportunity to verify that agreed-upon repairs have been completed, the home is in the same condition as when you went under contract, and all fixtures and appliances included in the contract are still in place. If you find issues, your agent can address them with the seller's agent before you sit down at the closing table.
At closing, you will sign a stack of documents including the deed of trust, promissory note, closing disclosure, and various affidavits. The closing disclosure — which your lender must provide at least three business days before closing — itemizes every cost, including your down payment, closing costs, lender fees, title fees, prepaid taxes, and insurance. Review this document carefully and compare it to your original loan estimate. In El Paso, buyer closing costs typically range from 2 to 4 percent of the purchase price.
Step 10: File Your Texas Homestead Exemption Immediately
This is the step that many new Texas homeowners miss, and it costs them real money. Texas offers a homestead exemption that reduces the taxable value of your primary residence. In El Paso County, the general homestead exemption reduces your home's assessed value for school district taxes by $100,000. There are additional exemptions for homeowners over 65, disabled homeowners, and disabled veterans. These exemptions can save you hundreds or even thousands of dollars per year in property taxes.
File your homestead exemption with the El Paso Central Appraisal District as soon as you close. You can file online, and the process takes about ten minutes. You need to file by April 30 of the year following your purchase to receive the exemption for that tax year, but filing immediately after closing ensures you do not forget. The exemption also caps annual appraisal increases at 10 percent for your homestead, which protects you from sudden property tax spikes as values appreciate.
The Texas Advantage: No State Income Tax
One of the biggest financial advantages of buying in Texas is the absence of state income tax. While Texas property tax rates are higher than the national average — El Paso County's effective rate is approximately 2.1 to 2.3 percent — the lack of state income tax often more than offsets this for homeowners with moderate to high incomes. For someone earning $80,000 per year, the state income tax savings compared to a state like California or New York can amount to $4,000 to $8,000 annually. This is one reason Texas continues to attract relocators from high-tax states, and it is a factor worth considering when evaluating the true cost of homeownership here.
Putting It All Together
Buying a house in Texas follows a well-defined process, but the details matter. The option period protects you. The TREC contract standardizes the transaction. The homestead exemption saves you money every year. And the absence of state income tax gives Texas homeowners a structural financial advantage. Understanding each step before you begin means fewer surprises and a smoother path to the closing table.
ProGen Real Estate guides buyers through every step of the Texas home buying process. Whether you are a first-time buyer, a veteran using your VA loan benefit, or relocating to El Paso from out of state, we provide honest advice, local market expertise, and hands-on support from your first showing to your closing day. Call us at (915) 691-1082 or visit progenrealestate.com/get-started to begin your home search.