Both the buyer and the seller pay closing costs in Texas, but they pay for different things. By custom, the seller pays for the owner’s title policy and the buyer pays the costs tied to their loan, with the escrow fee split down the middle. And almost every line item is negotiable in the contract.
What the seller typically pays
- The owner’s title policy. The Texas contract lets either side pay this premium, but Texas custom is that the seller buys the policy that protects the buyer’s ownership.
- Property taxes through closing day. Taxes are prorated, so the seller pays their share of the year up to the day of closing.
- Half of the escrow fee. This is the title company’s charge for handling the closing, and it is usually split.
- Loan payoff and lien releases. Any existing mortgage or lien on the property is paid from the seller’s proceeds so the buyer receives clear title.
- Agent compensation. Whatever was negotiated in the listing agreement, and any buyer-agent compensation the seller agreed to in the contract.
What the buyer typically pays
- Lender charges. Loan origination, the appraisal, the credit report, and underwriting fees.
- The loan title policy. This separate policy protects the lender, and lenders require it on financed purchases.
- Half of the escrow fee, plus recording fees.
- Prepaids. The first year of homeowner’s insurance, deposits for the tax and insurance escrow account, and interest from closing day to the end of the month.
- The survey, sometimes. If the seller’s existing survey can be reused, nobody pays for a new one. If a new survey is needed, the contract says who pays.
“Typical” is not a rule
The Texas contract makes nearly everything negotiable. In a competitive market, buyers often take on more costs to strengthen an offer. In a slower market, sellers frequently contribute toward the buyer’s closing costs. None of the customs above are required, they are just the starting point.
How much should you budget?
For buyers, closing costs in Texas commonly run two to five percent of the purchase price on top of the down payment, depending on the loan, the tax rate, and insurance. For sellers, the math is mostly the title policy, tax prorations, the loan payoff, and any compensation agreed in the contract. If you want exact numbers instead of a range, your agent can request a net sheet from us and we will run your actual transaction.
Where you will see every number
On a financed purchase, your lender must deliver a Closing Disclosure at least three business days before closing, listing every cost. At the closing table, the settlement statement itemizes both sides. If any line on either document looks unfamiliar, our glossary and FAQ explain the terms, and your escrow officer will walk through it with you line by line.
Have a specific closing to plan for? Call us at (972) 528-6071 or email info@cnattitle.com. It costs nothing to ask.