Buying or selling a home in Texas is a major milestone—but with all the paperwork, negotiations, and fine print, it’s easy to get blindsided by closing costs. Whether you’re a first-time buyer or a seasoned seller, understanding how closing costs in Texas work is key to avoiding surprises at the closing table.
In this guide, we’ll break down everything you need to know: what closing costs are, who pays what, how much to budget for, and how to navigate them like a pro.
What Are Closing Costs?
Closing costs are the fees and expenses, beyond the home’s purchase price, that buyers and sellers must pay to complete a real estate transaction. These include things like lender fees, title insurance, appraisal costs, and property taxes. They typically range from 2% to 6% of the home’s purchase price—so on a $300,000 home, you could be looking at $6,000 to $18,000 in total closing costs.
Texas has some unique aspects to its real estate closings, so it’s important to understand the local nuances if you’re buying or selling in the Lone Star State.
Who Pays Closing Costs in Texas?
Both the buyer and seller share the burden of closing costs in Texas, but who pays what isn’t set in stone. It often comes down to what’s negotiated in the sales contract.
Buyer’s Typical Closing Costs:
- Loan origination fees
- Appraisal and inspection fees
- Title insurance (lender’s policy)
- Escrow fees
- Survey fee (if applicable)
- Prepaid property taxes and homeowner’s insurance
- Recording fees
Seller’s Typical Closing Costs:
- Real estate agent commissions
- Title insurance (owner’s policy)
- Escrow fees
- Outstanding property taxes
- HOA fees or transfer fees (if applicable)
- Repairs or credits negotiated after inspection
Want help navigating these fees as a buyer? Work with an expert buyer’s agent who can guide you through every step — Learn more here.
Average Closing Costs for Buyers in Texas
For buyers, closing costs in Texas usually range from 2% to 5% of the home price. Here’s a rough breakdown of what that might look like:
| Home Price | Estimated Buyer Closing Costs (2–5%) |
| $250,000 | $5,000 – $12,500 |
| $350,000 | $7,000 – $17,500 |
| $500,000 | $10,000 – $25,000 |
Keep in mind that buyers who are paying in cash may avoid some of these fees, especially lender-related costs like underwriting or loan origination fees.
Average Closing Costs for Sellers in Texas
For sellers, the bulk of closing costs come from paying real estate commissions—which are typically 5% to 6% of the sale price. Here’s a quick look:
| Home Price | Estimated Seller Closing Costs (6–10%) |
| $250,000 | $15,000 – $25,000 |
| $350,000 | $21,000 – $35,000 |
| $500,000 | $30,000 – $50,000 |
Of course, if you’re selling your home without an agent (FSBO), you might reduce those commission costs—but you’ll also be navigating the entire process alone.
Common Closing Costs Explained
Let’s take a closer look at some of the most common closing costs in Texas:
Title Insurance
In Texas, the seller typically pays for the owner’s title policy, while the buyer pays for the lender’s title policy. Title insurance protects both parties from potential disputes over property ownership.
Appraisal Fee
If you’re taking out a mortgage, the lender will require an appraisal to ensure the property is worth the loan amount. Expect to pay around $400 to $700.
Survey Fee
Texas lenders may require a new property survey, which shows property boundaries. This typically costs $300 to $500.
Escrow Fees
These are fees paid to the title company for handling the funds and documents during the transaction. They’re usually split between buyer and seller, unless negotiated otherwise.
Property Taxes
Texas has no state income tax, but property taxes can be high. Depending on the time of year, the seller may owe prorated property taxes at closing.
Homeowners Insurance
Most lenders require the buyer to prepay a year’s worth of homeowners insurance at closing. Shop around early to get the best rate.
Loan Origination Fees
These are charged by the lender for processing your loan and can range from 0.5% to 1% of the loan amount.
Can You Negotiate Closing Costs?
Yes — and you should. Many buyers don’t realize that closing costs are often negotiable. Here’s how:
- Ask the seller for concessions. Sellers may agree to cover some of your closing costs to help close the deal.
- Shop around for services. You can often choose your own title company, surveyor, or inspector — potentially saving hundreds.
- Compare lenders. Loan fees vary widely. Get quotes from at least 2–3 mortgage providers.
- Look into buyer assistance programs. Texas offers several programs that can help cover closing costs for qualified buyers.
Need help finding closing cost assistance? Let’s talk about how we can help: Contact Airstream Realty.
Tips to Prepare for Closing Costs in Texas
Getting caught off guard by closing costs can put a real damper on your homebuying journey. Here’s how to avoid that:
Get a Loan Estimate Early
When you apply for a mortgage, the lender is required to give you a Loan Estimate outlining expected closing costs. Use this to start budgeting.
Budget for 5%
It’s better to over-prepare than underprepare. Set aside 5% of the home price for closing costs and unexpected fees.
Keep an Emergency Fund
Don’t drain your savings completely to cover closing. Maintain a buffer for moving costs, utilities, and those first few Target runs after move-in.
Texas-Specific Closing Considerations
Texas is one of several “community property” states, which can affect how property is titled and transferred if you’re married. Additionally, Texas closings usually occur at title companies, not attorneys’ offices as in some other states.
And because Texas has higher property taxes than most states, that portion of your closing costs may feel steep—especially if you’re relocating from a lower-tax state. Make sure your lender includes tax estimates in your escrow calculations.
Closing Cost Myths (Busted)
“The seller always pays all the closing costs.”
Not true. While sellers do cover a good chunk—especially commissions—buyers have plenty of costs too.
“Closing costs are fixed.”
Nope. You can often negotiate and shop around to lower some of these expenses.
“Cash buyers don’t have any closing costs.”
False. Even without a loan, cash buyers still face costs like title insurance, escrow fees, and taxes.
Final Thoughts: Be Ready, Be Smart
Closing costs in Texas aren’t just a line item—they’re a big part of the financial picture when buying or selling a home. The more you understand them, the more confident and prepared you’ll be at the closing table.
Whether you’re buying your first home in Austin, selling a ranch near San Antonio, or downsizing in Houston, the right agent can help you navigate closing costs and even save you money in the process.
If you’re ready to take the next step or just want to talk through the numbers, connect with a local expert today.