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How Much Are Closing Costs in Texas?

Understanding How Much Are Closing Costs in Texas Before You Buy or Sell

When buying or selling a home in Texas, the price you see on the listing isn’t the full picture. Closing costs—those fees and expenses due at the end of the transaction—can add up quickly and catch many people off guard. In a state as vast and varied as Texas, understanding how these costs work is key to budgeting smartly and avoiding surprises.

Texas is home to one of the most active real estate markets in the country. From urban centers like Houston and Austin to the Hill Country and Gulf Coast, closing costs can vary depending on the location, property type, and the specifics of your deal. Whether you're on the buying or selling side, this guide will walk you through everything you need to know about how much closing costs are in Texas and how to plan for them.

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What Are Closing Costs, and Why Do They Matter?

Closing costs are the collection of fees and charges due when a real estate transaction is finalized. These expenses go beyond the price of the property itself and cover services like title insurance, loan origination, escrow handling, and county recording. Depending on your role in the transaction—buyer or seller—your costs and responsibilities will differ.

On average, buyers in Texas can expect to pay between 2% and 6% of the home’s purchase price in closing costs, while sellers often pay between 6% and 10%, largely due to agent commissions. However, these numbers are just estimates; the final amount depends on several variables, including the price of the home, location, financing terms, and how the deal is negotiated.

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What Buyers Can Expect to Pay

For homebuyers, closing costs in Texas are mostly tied to your mortgage and securing ownership. Here’s a closer look at the common fees:

• Loan Origination Fees: Lenders typically charge around 1% of the loan amount to process your mortgage.
  
  

• Appraisal Fee: To determine the market value of the home, lenders require an appraisal. In Texas, this usually costs between $500 and $1,000.
  
  

• Title Insurance: Regulated by the Texas Department of Insurance, title insurance protects against ownership disputes. Expect to pay about 0.5% to 1.0% of the purchase price.
  
  

• Homeowners Insurance: If you're financing the home, the first year’s premium must be paid at closing.
  
  

• Escrow & Prepaid Items: Funds to cover taxes, homeowners insurance, and interest are typically held in escrow.
  
  

• Recording Fees: Counties charge a fee to record the deed, usually around $125.
  
  

• Survey Fees: A property survey may be required to confirm boundaries, costing anywhere from $400 to $1,500.
  
  

• Optional Fees: These could include loan discount points (to lower your interest rate), HOA dues, or a home warranty if negotiated.
  
  

While not required by law in Texas, some buyers choose to hire an attorney to review closing documents. If one is involved, the seller may cover the fee, but this depends on the terms of your contract.

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What Sellers Are Responsible For

Sellers tend to carry a heavier load when it comes to closing costs in Texas, primarily due to real estate commissions and required title services. Here's a breakdown of typical seller-side expenses:

• Real Estate Agent Commissions: This is often the biggest cost—typically 5% to 6% of the sale price, split between the buyer’s and seller’s agents.
  
  

• Prorated Property Taxes: Because Texas property taxes are paid in arrears, sellers are responsible for their share up to the closing date.
  
  

• Owner’s Title Insurance: In most Texas transactions, the seller pays for the buyer’s title insurance policy.
  
  

• Mortgage Payoff: If you still owe on the property, your remaining loan balance (plus any accrued interest) is paid from the sale proceeds.
  
  

• Escrow & Settlement Fees: These are often split between buyer and seller. Expect to pay about 1% to 2% of the sale price or a flat fee depending on the title company.
  
  

• Recording Fees: Typically under $150, this fee covers the county’s cost to officially record the sale.
  
  

• HOA Resale Certificates: If your home is in a homeowner’s association, you’ll need to provide documentation—usually costing between $100 and $400.
  
  

• Attorney Fees: While not mandatory, some sellers choose legal representation for peace of mind.
  
  

In some cases, sellers may also agree to pay a portion of the buyer’s closing costs as a negotiation tactic, especially in a buyer’s market. This is known as a seller concession and must adhere to loan program limits (up to 9% for conventional loans with large down payments).

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Unique to Texas: Property Taxes, Transfer Costs & Regulations

Texas is a bit of an outlier when it comes to closing costs, largely due to some state-specific policies:

• No Transfer Tax: Unlike many other states, Texas doesn’t charge a transfer tax when real estate changes hands.
  
  

• High Property Taxes: Texas property taxes are among the highest in the U.S., averaging around 2% of the home’s value. These are prorated at closing and can be a substantial cost for both parties.
  
  

• Title Insurance Rates Are Fixed: The Texas Department of Insurance regulates all title insurance rates, so you won’t find major differences between providers on that front.
  
  

• Attorney Not Required: You’re not legally required to have an attorney at closing in Texas, but many parties choose to involve one for added clarity and protection.

How to Reduce or Plan for Closing Costs

While many closing costs are fixed or regulated, there are still strategies you can use to save money or at least better prepare for what’s ahead.

• Negotiate Costs: Some fees—like title insurance, survey costs, and settlement charges—can be split or negotiated.
  
  

• Compare Lenders: Interest rates aren’t the only thing that varies; origination and underwriting fees can differ significantly.
  
  

• Know Your Loan Type: FHA, VA, and Conventional loans all have different rules regarding seller-paid costs and buyer limits.
  
  

• Use First-Time Buyer Programs: The Texas Department of Housing and Community Affairs (TDHCA) offers programs that provide down payment and closing cost assistance for qualifying buyers.
  
  

• Plan Early: Work with your lender and real estate agent to request a Loan Estimate and Seller’s Net Sheet early in the process to get a realistic picture of what you’ll owe.
  

Final Thoughts

So, how much are closing costs in Texas? For buyers, plan for 2% to 6% of your home’s purchase price. For sellers, expect to pay 6% to 10%, largely due to agent commissions and title-related fees. While these figures may seem high, remember that Texas doesn’t charge a property transfer tax—and some costs can be negotiated or shared.

Whether you're buying your first home or preparing to list your property, understanding these closing costs upfront gives you a major advantage. Reach out to a local Texas real estate professional and a trusted lender to get a personalized breakdown tailored to your specific transaction. With the right guidance, you can close with confidence.

Frequently Asked Questions About Closing Costs in Texas

What are typical closing costs for buyers in Texas?

Buyers in Texas generally pay between 2% and 6% of the home’s purchase price in closing costs. These include loan origination fees, appraisal fees, title insurance, homeowners insurance, prepaid taxes, and escrow deposits.

How much are closing costs for sellers in Texas?

Sellers typically pay 6% to 10% of the home’s sale price. The largest portion is usually the real estate agent commission (5% to 6%), followed by prorated property taxes, title insurance, escrow fees, and other administrative charges.

Does Texas have a property transfer tax?

No. Texas is one of the few states that does not impose a property transfer tax when real estate changes hands. This helps reduce overall closing costs compared to other states.

Who pays for title insurance in Texas?

In most Texas real estate transactions, the seller pays for the buyer’s owner’s title insurance policy. However, this is negotiable and can vary depending on the contract.

What is the average real estate agent commission in Texas?

The average real estate commission in Texas is 5% to 6% of the sale price, typically split between the buyer’s and seller’s agents. This cost is almost always paid by the seller.

Can you negotiate closing costs in Texas?

Yes. Many closing costs in Texas are negotiable or can be split between the buyer and seller. Items like escrow fees, home warranties, and title insurance costs can often be part of the negotiation.

What are common mortgage closing fees in Texas?

Common mortgage-related fees for Texas buyers include:

• Loan origination fees (~1%)
  
  

• Appraisal fee ($500–$1,000)
  
  

• Title insurance
  
  

• Prepaid interest
  
  

• Escrow deposits
  
  

• Discount points (optional, if buying down the interest rate)
  
  

Always request a Loan Estimate from your lender to see a detailed breakdown of these costs.