5 things to know before buying a home in Houston

Buying your first home is a big decision anywhere. In Houston, a handful of local realities can change the math, the risk and the negotiation in ways that national advice rarely covers. These are the five I walk every first-time buyer through before we tour a single house.

1. Property taxes are part of the price

Texas has no state income tax, so property taxes fund schools, counties and cities instead. Inside Houston, the combined rate for a home in HISD commonly lands around 2 percent of appraised value each year. In suburban communities with Municipal Utility Districts, it can run closer to 3 percent. On a $500,000 home, the difference between those two rates is roughly $5,000 a year, which is real money in a monthly budget.

Two things help. First, file for your homestead exemption as soon as you own and live in the home. It reduces the taxable value for school district taxes and caps future increases in your taxable value at 10 percent a year. Second, protest your appraisal when the notice arrives each spring. Many Houston homeowners protest every year, and it is a normal part of owning here, not a confrontation.

• Look up the current tax rate for the exact address, not a neighborhood average
• Do not build your budget on the seller's tax bill if they had exemptions you will not have in year one
• Ask your lender to escrow taxes at a realistic rate so the second year does not surprise you

2. Flood risk is address-specific

Houston is flat, low and rainy, and Hurricane Harvey in 2017 made flood risk part of every real estate conversation. The most important thing to understand is that flood risk is not a neighborhood label. Two homes on the same street can have very different histories depending on slab height, lot grade and drainage.

Start with the FEMA flood zone, but do not stop there. Zone AE is the mapped 1 percent annual chance floodplain, and federally backed lenders require flood insurance there. Many homes that flooded in Harvey were outside that zone. Ask for the Seller's Disclosure, which in Texas now asks specifically about prior flooding, flood insurance claims and federal disaster assistance. If an elevation certificate exists, read it. Get a flood insurance quote during your option period, even if the insurance is optional for that address. I wrote a longer primer on flood zones and insurance if you want to go deeper.

3. The soil moves, so foundations matter

Much of Houston sits on expansive clay that swells when wet and shrinks when dry. Over decades, that movement shows up as sloped floors, sticking doors, cracks in brick and drywall and, in some cases, foundation repair. It is common enough here that it should not scare you away from a house, but it should shape your inspection plan.

• Older homes in neighborhoods like the Heights, Oak Forest and Garden Oaks may sit on pier and beam rather than a slab, which is easier to level but needs ventilation and access
• If the general inspector flags movement, bring in a structural engineer during the option period rather than relying on a repair company's estimate alone
• Ask whether prior foundation work came with a transferable warranty, and get the paperwork
• Watch gutters, grading and large trees close to the slab, which all influence movement

4. The Texas contract gives you an option period. Use it well.

Texas uses standard TREC contract forms, and one feature surprises buyers from other states: the option period. You pay the seller a modest option fee, often a few hundred dollars, in exchange for an unrestricted right to terminate within a negotiated number of days. Your earnest money is separate, commonly around 1 percent of the price, and is credited toward your purchase at closing.

The option period is where you complete inspections, gather insurance quotes, review the survey and any HOA documents, and negotiate repairs. In today's market, sellers are more willing to accept longer option periods and to negotiate on what the inspection finds. Schedule your inspectors before you write the offer, so you are not scrambling on day four of a five-day window. If the seller has an existing survey, you may be able to use it with a T-47 affidavit, which can save time and a few hundred dollars.

5. Houston has no zoning, but it does have rules

Houston is famous for having no traditional zoning code. That does not mean anything goes. Most single-family neighborhoods are governed by deed restrictions, HOAs or civic associations, and many blocks have adopted city minimum lot size or building line protections. Historic districts, like several in the Heights, add design review on top of that.

Practically, read the deed restrictions for any home you are serious about, especially if you plan to add on, build a pool, park a boat or run a business from home. Also look at what surrounds the property, not just what is on it. A vacant lot or an older commercial site nearby could become something very different, and in Houston that change can happen faster than in zoned cities.

Help for first-time buyers

Down payment and closing cost assistance is available to many first-time buyers in the Houston area, including state programs through the Texas Department of Housing and Community Affairs and the Texas State Affordable Housing Corporation, and the City of Houston's Homebuyer Assistance Program. Income limits, purchase price caps and lender requirements apply, and the details change, so start with a lender who works with these programs regularly.

How I approach a first purchase

Before I was a REALTOR, I spent more than ten years negotiating contracts as a buyer for a Fortune 500 oil and gas company. The lesson that carried over is simple: the best outcomes come from preparation. For a first-time buyer, that means knowing your real monthly cost, including taxes and insurance, knowing what you would walk away from and having inspectors lined up before you need them.

One of my favorite reviews came from first-time buyers in the Heights who said the process felt simple and even fun. That was not luck. It was a plan, built before the first showing. If you do those three things, the rest of the process gets calmer and the negotiation gets easier.