Both the buyer and the seller pay closing costs in Texas. Each party covers different expenses, set by local custom and the purchase contract. Buyers typically pay 2% to 6% of the home’s purchase price. This covers mortgage fees and prepaid expenses. Sellers typically pay 6% to 10% of the sale price. Agent compensation makes up the biggest share. On a $300,000 home, buyers may owe $6,000 to $18,000 at closing. Sellers may owe $18,000 to $30,000.
Texas has well-established customs. One example: the seller pays for the owner’s title insurance policy. But almost every cost is negotiable in the purchase contract. Texas also has no real estate transfer tax, which lowers the overall cost burden compared to many other states.
This guide covers who pays what in Texas, itemized costs for buyers and sellers, title insurance customs, the no-transfer-tax advantage, seller concession limits by loan type, and what to do if a seller refuses to cover costs.
Who Pays Closing Costs
- Who Pays Closing Costs in Texas?
- What Closing Costs Do Buyers Pay in Texas?
- What Closing Costs Do Sellers Pay in Texas?
- Who Pays for Title Insurance in Texas?
- Does Texas Have a Real Estate Transfer Tax?
- Can the Seller Pay the Buyer’s Closing Costs in Texas?
- What if the Seller Won’t Pay Closing Costs?
- Which Closing Costs Are Negotiable in Texas?
- How to Lower Closing Costs in Texas
- Who Pays Closing Costs in Your State?
- Who Pays Closing Costs in Your State?
- Conclusion
- Frequently Asked Questions
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Who Pays Closing Costs in Texas?
In Texas, both parties pay closing costs. They cover different categories of expense. The table below shows the standard split based on local custom, per the Texas closing cost breakdown for buyers and sellers published by Herring Bank.
| Cost Item | Typically Paid By | Estimated Range |
|---|---|---|
| Loan origination fee | Buyer | 0.5%, 1% of loan amount |
| Appraisal fee | Buyer | $300, $600 |
| Survey fee | Buyer | $400, $700 |
| Lender’s title policy | Buyer | Varies by loan amount |
| Prepaid interest and escrow | Buyer | 1, 3 months of costs |
| Recording fees | Buyer | $100, $300 |
| Owner’s title policy | Seller (by custom) | Varies by sale price |
| Agent compensation | Seller | Negotiated |
| Property tax proration | Seller | Pro-rated to closing date |
| Mortgage payoff | Seller | Remaining loan balance |
| HOA transfer fee | Seller (if applicable) | $100, $400 |
Sources: Herring Bank (herringbank.com); JVM Lending (jvmlending.com). Ranges are estimates; verify with your lender and title company before closing.
For a deeper look at total closing costs in Texas, including how figures shift by county and loan type, see the detailed statewide breakdown.
What Closing Costs Do Buyers Pay in Texas?
Buyers in Texas pay costs tied to securing their mortgage and completing the legal transfer. According to recurring vs. non-recurring Texas closing costs outlined by JVM Lending, lender fees and prepaid expenses make up the bulk of what buyers owe.
| Cost Item | Typical Texas Range | Notes |
|---|---|---|
| Loan origination fee | 0.5%, 1% of loan amount | Varies by lender |
| Appraisal fee | $300, $600 | Required by lender |
| Home inspection | $300, $500 | Optional but recommended |
| Credit report fee | $25, $50 | Lender charge |
| Survey fee | $400, $700 | Common in Texas; confirms boundaries |
| Lender’s title policy | Varies | Protects the lender’s interest |
| Escrow and settlement fee | $300, $700 | Paid to title company |
| Recording fees | $100, $300 | County charge to file deed |
| Prepaid interest | Varies | From closing date to first payment |
| Homeowners insurance (first year) | $1,200, $3,000 | Paid upfront at closing |
| Property tax escrow deposit | 2, 3 months of taxes | Funds escrow account |
Ranges are estimates based on Herring Bank and JVM Lending published data. Verify with your lender’s Loan Estimate.
Your lender must give you a Loan Estimate within three business days of your mortgage application. It shows your projected costs. The Closing Disclosure arrives at least three business days before closing. It shows the final locked figures.
For a complete itemized guide, see Buyer Closing Costs Texas, which covers each line item with current ranges.
What Closing Costs Do Sellers Pay in Texas?
Sellers in Texas pay costs tied to transferring ownership and settling obligations on the property. The biggest single expense is agent compensation. This is negotiated in the listing contract. It is no longer set by an industry standard, following NAR rule changes that took effect in August 2024. Sellers and agents now negotiate compensation terms separately. Buyer-broker fees may or may not be covered by the seller, depending on the contract.
Common seller-paid costs include:
- Owner’s title insurance policy, By Texas custom, the seller pays for this policy. It protects the buyer. Rates are regulated statewide by the Texas Department of Insurance.
- Real estate agent compensation, Negotiated; historically 5%, 6% of the sale price, now variable.
- Property tax proration, Texas property taxes are paid in arrears according to a schedule. The seller owes taxes from January 1 through the closing date. These are credited to the buyer at closing.
- Existing mortgage payoff, Any remaining balance must be paid at closing.
- HOA transfer fees and resale certificates, Required if the home is in a community association.
- Home warranty, Sometimes offered as a buyer incentive; typically $300, $600.
- Title and escrow-related fees, Certain administrative costs may be assigned to the seller by the contract.
For the full line-item breakdown, see Texas Seller Closing Costs.
Who Pays for Title Insurance in Texas?
In Texas, the seller customarily pays for the owner’s title insurance policy. This is not a legal requirement. The obligation exists only if the purchase contract says so. Either party can negotiate who covers the cost.
There are two separate policies in most Texas transactions:
- Owner’s policy, Protects the buyer against title defects, liens, or ownership disputes found after closing. Paid by the seller by custom.
- Lender’s policy (loan policy), Protects the lender’s interest in the property. Paid by the buyer.
One Texas-specific advantage: title insurance rates are set and regulated by the state. Per Texas title insurance rate regulations from the Texas Department of Insurance, you pay the same rate no matter which title company you choose. The only variable is who pays the premium, and the contract decides that.
Does Texas Have a Real Estate Transfer Tax?
Texas does not have a state real estate transfer tax. Neither the buyer nor the seller pays a percentage-based tax just for transferring ownership. This is a real cost advantage over many other states.
For context, a buyer in New York pays a transfer tax of 0.4% to 1.825% of the purchase price, depending on the property value and location (verify current rates with the New York State Department of Taxation and Finance before relying on this figure). On a $300,000 home, that is $0 in Texas versus potentially $1,200 or more at a lower New York rate. Higher-value transactions in New York can push that gap to several thousand dollars.
Texas buyers and sellers still pay county recording fees to file the deed and mortgage documents. But these are small fixed amounts, typically $100 to $300, not a percentage of the sale price.
Can the Seller Pay the Buyer’s Closing Costs in Texas?
Yes, sellers in Texas can pay some or all of a buyer’s closing costs through seller concessions. Both parties must agree in the purchase contract. Asking for concessions is common, especially in a buyer’s market.
How much a seller can contribute depends on the buyer’s loan type. Each loan program caps the seller’s contribution.
Seller Concession Limits by Loan Type
| Loan Type | Seller Concession Cap | Notes |
|---|---|---|
| Conventional (down payment under 10%) | 3% of sale price | Fannie Mae/Freddie Mac guideline |
| Conventional (10%, 25% down) | 6% of sale price | Fannie Mae/Freddie Mac guideline |
| Conventional (over 25% down) | 9% of sale price | Fannie Mae/Freddie Mac guideline |
| FHA loan | 6% of sale price | Per FHA seller concession limits (HUD Handbook 4000.1) |
| VA loan | 4% of sale price (plus normal costs) | Per VA loan seller concession guidelines (VA Lenders Handbook) |
| USDA loan | No set percentage cap | Costs must not exceed actual closing costs |
These limits can change. Verify current caps with your lender against HUD Handbook 4000.1, the VA Lenders Handbook, and the Fannie Mae Selling Guide before relying on them.
If concessions exceed the loan program cap, the excess cannot apply to closing costs. The home must also appraise at or above the purchase price when concessions are included. If the appraised value falls short, the concession amount may need to be adjusted.
What if the Seller Won’t Pay Closing Costs?
In Texas, sellers are not required by law to pay a buyer’s closing costs. The obligation exists only if it is written into the purchase contract. If a seller declines to offer concessions, you have several options:
- Offer a higher purchase price. A slightly higher offer can net the seller the same amount while allowing concessions to be written in. This rolls costs into the loan. Confirm with your lender that the property will appraise at the higher value.
- Request lender credits. You can accept a slightly higher interest rate in exchange for credits from the lender. These credits cover closing costs at the table. This reduces your upfront cash but raises what you pay over the life of the loan.
- Apply for Texas assistance programs. The Texas State Affordable Housing Corporation (TSAHC) offers down payment and closing cost assistance for qualifying buyers. Visit Texas closing cost assistance programs to check current program availability, income limits, and geographic eligibility.
- Walk away. In a competitive seller’s market, declining concessions is a reasonable seller position. If no other option closes the gap, withdrawing from the contract may be your only leverage.
If a seller agreed to concessions in a signed contract and later refuses, consult a licensed Texas real estate attorney to understand your options. This article does not constitute legal advice.
Which Closing Costs Are Negotiable in Texas?
Many closing costs in Texas are negotiable. Local customs set defaults, but the purchase contract controls the actual split.
Commonly negotiated items include:
- Who pays the owner’s title policy, Seller by custom, but the contract can shift this to the buyer
- Survey costs, Sometimes split or assigned to one party
- Home warranty, Buyer can request; seller decides whether to provide
- Repair credits, Seller may offer cash at closing instead of making repairs
- Seller concessions, The amount the seller contributes toward buyer costs
- Escrow and administrative fees, Some title companies allow flexibility on fee allocation
Fixed or non-negotiable items include lender-mandated fees (appraisal, credit report) and government recording fees. Buyers can lower lender-side costs by shopping multiple lenders before making an offer and comparing Loan Estimates line by line.
Market conditions affect how much leverage each party holds. In a buyer’s market, concession requests are more often granted. In a seller’s market, buyers typically absorb more of the upfront costs.
How to Lower Closing Costs in Texas
Both buyers and sellers can reduce what they owe at the closing table.
For buyers:
- Shop at least two to three lenders and compare Loan Estimates for the same loan amount and term, lender fees vary significantly
- Ask lenders about no-closing-cost loan options (higher rate in exchange for lender credits)
- Negotiate seller concessions into the purchase contract
- Check eligibility for TSAHC assistance programs
- Close at the end of the month to reduce prepaid daily interest
For sellers:
- Negotiate agent compensation terms upfront and in writing
- Limit concession offers based on current market conditions
- Review the settlement statement at least 48 hours before closing to catch errors
- Receive competing cash offers to remove agent commission entirely, which is typically the largest single line item in seller closing costs
For both parties:
- Review the Closing Disclosure at least three business days before closing and compare it against earlier estimates
- Ask the title company to explain any fee that wasn’t on the original Loan Estimate or listing net sheet
Who Pays Closing Costs in Your State?
Closing cost customs vary by state. Transfer taxes, attorney requirements, and title insurance conventions all differ. Pick your state below for a local breakdown.
Who Pays Closing Costs in Your State?
Closing cost customs vary by state, transfer taxes, attorney requirements, and title insurance conventions all differ. Pick your state below for a local breakdown.
Conclusion
In Texas, closing costs are shared between buyers and sellers. Each party covers a different category of expense. Buyers pay 2% to 6% of the purchase price in mortgage-related and prepaid costs. Sellers pay 6% to 10%, with agent compensation as the largest single line item. Texas buyers benefit from no state transfer tax and title insurance rates regulated by the Texas Department of Insurance.
Most costs are negotiable. The purchase contract determines the actual split. Seller concessions, capped by loan type at 3% to 9% for conventional, 6% for FHA, and 4% for VA, are a routine tool buyers use to reduce upfront costs. Review the Loan Estimate and Closing Disclosure carefully before closing. That is the most effective way for either side to avoid surprises.
The biggest closing cost for most Texas sellers is agent compensation. It typically runs 3% to 6% of the sale price. On a $400,000 home, that is $12,000 to $24,000 off the top before you see any proceeds. iBuyer.com connects you with vetted cash buyers who compete for your home. You keep more of the proceeds without listing on the MLS or paying agent commissions. Most sellers get an initial offer within 24 to 48 hours and can close in as few as 7 days.
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Get My Market ReportFrequently Asked Questions
Both the buyer and the seller pay closing costs in Texas. They divide expenses based on local custom and the purchase contract. Buyers cover mortgage-related and prepaid costs. Sellers cover the owner’s title policy, prorated property taxes, agent compensation, and any remaining mortgage balance.
Buyers in Texas typically pay 2% to 6% of the home’s purchase price in closing costs, separate from the down payment. On a $300,000 home, that is $6,000 to $18,000. The exact amount depends on the lender, loan type, and prepaid expenses required at closing.
Sellers in Texas typically pay 6% to 10% of the sale price in closing costs. Agent compensation makes up the largest share. On a $300,000 sale, that is $18,000 to $30,000. Excluding agent compensation, seller-only costs such as the title policy, tax proration, and HOA fees are generally 1% to 3% of the sale price.
In Texas, the seller customarily pays for the owner’s title insurance policy. This is not required by law and can be negotiated in the purchase contract. The buyer pays for the separate lender’s title policy. Texas title insurance rates are regulated by the Texas Department of Insurance, so the premium is the same regardless of which title company you use.
Texas does not have a state real estate transfer tax. Neither the buyer nor the seller pays a percentage-based tax just for transferring ownership. Buyers and sellers still pay county recording fees to file the deed and mortgage documents, but these are small fixed amounts rather than a percentage of the sale price.
On a $300,000 home in Texas, a buyer can expect to pay roughly $6,000 to $18,000 in closing costs (2% to 6%). A seller can expect to pay roughly $18,000 to $30,000 (6% to 10%). The buyer’s actual costs depend heavily on lender fees and escrow requirements. The seller’s costs depend mainly on agreed agent compensation and any concessions offered.
Yes, sellers in Texas can pay some or all of a buyer’s closing costs through seller concessions. Both parties must agree in the purchase contract. The amount a seller can contribute depends on the buyer’s loan type. FHA loans cap seller concessions at 6%, VA loans at 4%, and conventional loans at 3% to 9% depending on down payment size.
In Texas, sellers are not legally required to pay a buyer’s closing costs. The obligation exists only if it is written into the purchase contract. If a seller refuses, buyers can request lender credits by accepting a slightly higher rate, offer a higher purchase price to roll costs into the loan, or apply for Texas assistance programs through TSAHC.
Yes, asking a seller to cover part of the buyer’s closing costs is common and accepted in Texas real estate. Whether the seller agrees depends on market conditions and negotiating leverage. In a slower market, sellers are more willing to offer concessions. In a competitive seller’s market, requests may be declined or countered.
Many closing costs in Texas are negotiable, including who pays the owner’s title policy, survey costs, home warranty, and whether seller concessions are offered. Fixed items include lender-mandated fees such as the appraisal and credit report, plus government recording fees. Buyers can still shop lenders to reduce lender-side costs.
In some loan programs, buyers can accept a higher interest rate in exchange for lender credits that cover closing costs at the table. This effectively rolls costs into the loan’s rate structure. Whether this is allowed depends on the loan type and the lender; confirm with your lender before closing.
A Closing Disclosure is the final itemized document listing all closing costs for a real estate transaction. The buyer receives it at least three business days before closing. It mirrors the earlier Loan Estimate and shows exact amounts for every fee. Comparing it to the Loan Estimate lets buyers catch any changes before they are locked in at the closing table.
Reilly Dzurick is a licensed real estate agent with over six years of experience and a member of the iBuyer.com Market Insights Team, covering national trends in home selling and the evolving iBuyer landscape. Her firsthand experience working with buyers and sellers gives her a practical perspective on how these platforms impact real homeowners. She holds a degree in Public Relations, Advertising, and Applied Communication.
