Buyer & seller guide

Closing costs in Texas,
line by line.

Closing costs surprise people because they arrive as one number at the end instead of a price you shopped for. Here is what is actually in that number on a typical Central Texas transaction.

What buyers generally pay

• Lender charges: origination, underwriting, credit report, and discount points if you buy down the rate.
• Appraisal and inspections: the appraisal is ordered by the lender; inspections are yours to choose and pay for during the option period.
• Title and escrow: closing fee, title search, and the lender's title policy premium.
• Survey: either a new one or, if an existing survey works, an affidavit that lets the title company use it.
• Prepaids and escrow: the first year of homeowners insurance, plus months of taxes and insurance collected up front.
• Prorated property taxes: Texas taxes are paid in arrears, so the split at closing can be a credit to you or a charge, depending on the time of year.
• Option fee and earnest money: paid early, not at closing, and the earnest money is credited to you at closing.

What sellers generally pay

• Brokerage compensation as agreed in the listing agreement and any agreement with the buyer's broker.
• Owner's title policy, which in Texas is customarily the seller's cost, though like everything it is negotiable.
• Payoff of the existing mortgage, plus any prorated taxes and HOA dues up to the closing date.
• HOA resale certificate and transfer fees, and any repairs or concessions agreed during negotiation.

What is actually negotiable

More than most buyers realize. Seller-paid closing costs, a rate buydown funded by the seller, who pays the title policy, and repair credits all get traded in negotiation. In a slower market these concessions do a lot of work, and they often help a buyer more than a price cut of the same size.

Get the real estimate early

Lenders provide a Loan Estimate that itemizes every fee. The title company can estimate its side on request. Between the two you can know your cash to close within a few hundred dollars, well before you are emotionally committed to a house.

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This article is general information, not legal, tax, financial or insurance advice. Rules, rates and local ordinances change — confirm the details with your lender, insurance agent, title company, city or county, or a qualified professional.