Closing Costs in Texas: What Buyers and Sellers Pay
In Texas, buyers typically pay 2 to 5 percent of the purchase price in closing costs, and sellers typically pay 1 to 3 percent before any agreed-upon compensation to a buyer’s agent. Texas has no state real estate transfer tax, which keeps closing simpler than in many states, but title insurance, escrow, lender costs, and prorated property taxes still add up.
The exact number depends on the price, the loan type, and what’s negotiated in the contract. The breakdown below is what each side can expect line by line.
What “closing costs” actually means
Closing costs are the fees and prepaid items required to transfer ownership and fund a loan. They are not part of the price of the home. They get paid at closing, in addition to the down payment for buyers, or netted against proceeds for sellers.
A typical buyer’s closing costs
Lender fees, if you’re financing:
- Origination, application, and processing fees. Together usually 0.5 to 1 percent of the loan amount, varies by lender.
- Discount points if you choose to buy down the rate.
- Appraisal, typically $500 to $700.
- Credit report, flood certification, and tax-and-insurance escrow setup.
Title and settlement:
- Lender’s title insurance policy. Required by the lender, paid by the buyer.
- Escrow or settlement fee. Split or assigned by contract.
- Recording fees with the county.
Prepaid items:
- Property tax escrow, typically two to three months upfront.
- Homeowner’s insurance, first year paid at closing plus an escrow cushion.
- Prepaid interest from closing day through the end of the month.
Inspections and surveys:
- General home inspection, $400 to $700.
- Specialty inspections (foundation, sewer scope, pool, HVAC, etc.) as needed.
- Survey, often paid by the seller in Texas custom but always verify in the contract.
Total for a typical Texas buyer on a 30-year conventional loan lands in the 2 to 5 percent range. FHA and VA loans have their own fee patterns and can push higher.
A typical seller’s closing costs
- Owner’s title insurance policy, customarily paid by the seller in Texas but negotiable. Usually the largest single line on the seller’s side.
- Escrow fee, often split.
- Recording or release fees on existing liens.
- HOA transfer fees, resale certificates, and subdivision documents.
- Survey, often paid by the seller in Texas.
- Prorated property taxes for the part of the year the seller owned the home.
- Any agreed seller concessions, including compensation negotiated for the buyer’s agent.
- Existing mortgage payoff (settled at closing, though not technically a closing cost).
Since August 2024, the buyer-agent compensation on the seller’s side is negotiated deal by deal rather than baked into the listing structure. Some sellers offer it as a concession; others don’t. See our buyer representation guide for how this works in practice.
Texas-specific quirks worth knowing
- No state real estate transfer tax. Many other states charge meaningful tax at transfer; Texas does not.
- Title insurance rates are regulated by the state. The premium is the same regardless of which title company you use; service quality differs.
- Property taxes are paid in arrears for the calendar year. At closing, the seller credits the buyer for the portion of the year already lived in; the buyer pays the full year when the bill arrives.
- Homestead exemption can lower the buyer’s future tax bill but has to be filed separately after closing.
Who pays what is negotiable
The customary split above is exactly that, customary. Almost every line can be reassigned in the contract, and seller concessions are common in slower markets. A buyer with limited cash can ask the seller to credit a percentage at closing to cover some buyer costs; the price is typically firm in exchange. A good agent runs the math both ways so you see the actual net.
How to estimate before you write a contract
Two practical tools:
- Ask your lender for a Loan Estimate. This is a standard, regulated form that itemizes a buyer’s costs for a specific loan scenario.
- Ask your agent for a seller’s estimated net sheet (for sellers) or estimated cash to close (for buyers). Both get drafted before you sign so you see the all-in number, not just the price.
Common questions
Are closing costs negotiable in Texas?
Most are. The contract assigns each item. Things like the survey, escrow fee, and title-related costs are commonly negotiated or split. Lender fees are set by the lender. Government recording fees are fixed by the county.
What does title insurance actually cover?
The owner’s policy protects the buyer against problems with the title to the property, like missed liens, claims from prior owners, or recording errors. The lender’s policy protects the lender. They are separate policies, usually issued together at closing.
Is a survey required in Texas?
Not legally, but most lenders require one (or an Existing Survey Affidavit) before funding. If a recent survey exists, it can sometimes be reused; otherwise a new one is ordered.
Can the seller pay all of my closing costs as a buyer?
Loan type matters. Conventional loans cap seller concessions (typically 3 to 9 percent depending on down payment). FHA caps at 6 percent. VA has its own rules. Within those caps, full seller-paid closing costs are common in slower markets.
Adrian Dukes is the Broker-Owner of Dukes Residential, an independent brokerage serving the Austin metro. Licensed in Texas, broker license #678522.
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If you’re trying to estimate closing costs for a specific deal in the Austin metro, I’m happy to walk through the numbers with you. No pressure, just clear math.