Relocating to Dallas: Costs Buyers Often Forget to Plan For

Property taxes and exemptions

Texas has no state income tax, and local governments rely more heavily on property taxes as a result. For a relocating buyer, this is the single most common budgeting surprise, because the effective monthly cost of two similarly priced homes can differ depending on which taxing entities apply.

• Rates are set annually by overlapping entities — county, city, school district, community college and special districts — that vary by parcel.
• The taxable value used for your bill is not necessarily the price you paid, and it can change year to year.
• Exemptions, including the homestead exemption for a qualifying primary residence, have eligibility rules and application processes administered by the county appraisal district.
• If the seller had exemptions you do not qualify for, or vice versa, your bill can differ from theirs.

Verify the tax rates, taxable value and exemption requirements for the exact parcel with the relevant county appraisal district. Do not budget from the prior owner's tax bill without understanding why it was what it was.

Homeowners insurance and endorsements

Premiums vary with the property, not just the price. Roof age and material, construction type, claim history on the property and in the area, deductible structure and coverage selections all move the number.

• Get quotes on the specific address during the option period, before your contingencies expire.
• Ask how wind and hail deductibles are structured, since these are often expressed as a percentage rather than a flat amount.
• Confirm whether flood coverage is needed based on the current FEMA map and on local drainage conditions; standard policies do not include flood.
• For condominiums, confirm what the master policy covers and what your HO-6 policy must cover, including deductible responsibility.

HOA dues, assessments and transfer fees

Association obligations apply to most condominiums and townhomes and to many newer single-family communities. Beyond the monthly or annual dues, budget for transfer and resale certificate fees at closing, capital contributions in some communities, and the possibility of special assessments.

Review the budget, reserve study and recent minutes. A community with low dues and thin reserves may be less predictable than one with higher dues and a funded reserve.

Transaction costs at and around closing

• Lender costs: origination, discount points if elected, appraisal and credit-related fees.
• Title and escrow costs, recording fees, and the owner's and lender's title policies as allocated in your contract.
• Prepaid items and escrow funding for taxes and insurance.
• Option fee and earnest money, applied per the contract.
• Inspection costs: general inspection plus foundation, sewer scope, HVAC, termite or pool as applicable.
• Survey, where a new one is required.

Your lender's Loan Estimate and, later, Closing Disclosure are the controlling documents. Ask for a full estimate early rather than relying on a percentage rule.

Moving and first-year ownership costs

• Interstate moving, packing, vehicle transport and storage.
• Temporary housing if your sale and purchase do not align.
• Utility deposits and connection fees.
• Immediate repairs and safety items identified in inspection.
• Window treatments, appliances and fixtures that did not convey.
• Lawn, pool and pest service, and seasonal HVAC maintenance.
• Texas vehicle registration, inspection and driver's license requirements.

A reasonable practice is to hold a dedicated reserve for the first twelve months of ownership beyond your closing funds. Older homes justify a larger reserve than newer construction.