Closing Costs in Texas: Who Pays What?

By the time you reach the closing table, the price of the home isn’t the only number that matters. Closing costs in Texas are the stack of fees that finalize the sale — and they land on both sides of the deal, not just the buyer’s. Knowing roughly what they run, and who customarily pays which ones here in Texas, helps you budget honestly and spot what’s actually negotiable. Here’s the plain-English breakdown I give my Houston clients.

Quick frame: buyers generally bring 2% to 5% of the purchase price in closing costs; sellers pay their own set, led by real estate commissions and, by Texas custom, the owner’s title policy. Almost every line is negotiable — that’s what the offer is for.

What closing costs in Texas actually cover

“Closing costs” is a catch-all for everything outside the purchase price that has to be settled to transfer the home and fund the loan. Some are one-time service fees, some are prepaid expenses you’d owe anyway (just earlier), and a few are unique to how Texas does things. One piece of good news up front: Texas is one of the few states with no real estate transfer tax, so you won’t see that line that buyers in many other states get hit with.

What the buyer typically pays

For a financed purchase, the buyer’s side usually lands between 2% and 5% of the price, and it’s mostly tied to the loan and the property checks:

• Loan-related fees: origination, underwriting, and processing charges from your lender, plus any discount points you choose to buy.
• Appraisal and inspection: the lender-ordered appraisal (generally a few hundred dollars) and your optional home inspection.
• Survey: Texas deals often call for a current survey; you’ll either pay for a new one or the seller may furnish an existing one with a required update.
• Lender’s title policy and closing fees: a title policy that protects the lender, plus the title company’s escrow and document charges.
• Prepaids and escrow setup: the first chunk of property taxes and homeowner’s insurance, funded into an escrow account at closing — a bigger line in Texas, where property taxes run high.

Your earnest money and any option fee are separate deposits made earlier in the process, but they count toward the cash you’ve already put in. I break those down in the post on how earnest money works in a Texas deal.

What the seller typically pays

Sellers have their own column, and it’s usually the larger one because it includes the cost of selling:

• Real estate commissions: the largest seller line. Under the rules that took effect in 2024, commissions are negotiated and put in writing rather than assumed, and in many transactions the seller still agrees to contribute toward the buyer’s agent fee as part of the deal — but nothing is automatic, and it’s all spelled out before showings.
• The owner’s title policy: in most Texas markets it’s customary for the seller to buy the owner’s title insurance that protects the buyer’s ownership — though, like everything here, it’s negotiable in the contract.
• Prorated property taxes: the seller covers the year’s taxes up to the closing date, credited to the buyer at the table.
• Owed items and concessions: any agreed repairs, a negotiated credit toward the buyer’s costs, HOA transfer or resale fees, and the payoff of any existing mortgage.

The Texas title-insurance wrinkle worth knowing

Here’s something that surprises buyers moving in from other states: in Texas, title insurance premiums are set by the state, not by the individual title company. The rate is regulated by the Texas Department of Insurance, so the premium itself won’t be cheaper at one company than another — they’re competing on service and fees, not the policy price. It’s a small thing, but it means you can stop comparison-shopping the premium and focus on a title company that closes cleanly.

Who pays what — and how to lower it

The “customary” splits above are starting points, not rules. Everything from the owner’s title policy to a closing-cost credit can be moved in the contract, and which way it leans depends on how hot the market is for that home. A few levers I help clients pull:

• Ask for a seller credit. When a buyer is competing in a softer pocket of the market, a seller contribution toward closing costs can be more valuable than a small price cut.
• Shop the controllable fees. You can’t change the title premium, but lender fees and some third-party charges vary — compare your Loan Estimates side by side.
• Mind the timing. Your prepaid taxes and insurance depend on when in the year you close; your lender can model it.

You’ll see every figure laid out in two documents: the Loan Estimate your lender provides shortly after you apply, and the final Closing Disclosure that must reach you no fewer than three business days before you close. Compare them line by line — the Consumer Financial Protection Bureau has good templates for doing exactly that. On the financing side, my guide to Houston mortgages and the loan FAQ cover the rest in depth.

Last updated: June 2026 · Reflects current Texas closing practices and post-2024 commission rules. Confirm specifics with your lender and title company.