Who Pays Closing Costs in Texas
Reviewed by Mark Lee
Buying or selling in the Lone Star State?
Then you’ve probably asked: Who Pays Closing Costs in Texas the buyer or the seller?
The honest answer: there are typical customs, but nearly everything is negotiable.
Your final split depends on local market conditions, your contract, and whether you’re taking a cash offer or using a mortgage lender.
Below, we break down Typical Closing Costs who usually pays what, how to read your Loan Estimate, what counts as Prepaid Costs, and smart ways to reduce closing costs without derailing your deal.
If you prefer to skip the red tape entirely, we’ll also show you how a direct sale can cover many fees so you keep more of your sale proceeds.
Closing Costs vs. Prepaid Costs (Know the Difference)
Closing costs = fees for the real estate transaction (title work, escrow company/title company charges, lender fees, Notary fees, courier fees, recording fees, etc.).
Prepaid Costs = upfront items the buyer pays in advance, such as prepaid interest, the first year of homeowner’s insurance, and initial deposits into the escrow account for property taxes and insurance.
Both show up on your Closing Disclosure a few business days before closing day.
Who Typically Pays What in Texas (Customs You’ll See Often)
Seller’s Closing Costs (Customary in Texas)
Owner’s title insurance (policy insuring the buyer’s ownership)
Real estate agent commissions/agent commissions (both listing and buyer-side commission fees, per the listing agreement)
Proration of property taxes through the closing date (Texas taxes are often paid at year-end; prorations balance the calendar)
Title company/escrow fees (seller’s share; often split 50/50 but negotiable)
Recording fees for seller items (e.g., reconveyance fee/lien release to clear the mortgage payoff)
HOA fees related to the homeowners association resale certificate/transfer fees (varies by HOA, commonly negotiated)
Home warranties (only if agreed in the contract)
Any Seller Concessions (if you agree to cover closing costs for the buyer up to a set amount)
Misc. closing fees/notary/courier fees on the seller’s side
Buyer Closing Costs (Customary in Texas)
Lender’s title insurance (protects the mortgage lender)
Loan origination fees, lender fees, and other loan fees (processing, underwriting, Credit Report Fee, flood cert, etc.)
Appraisal fees/home appraisal
Survey fee (if a new survey is required; sometimes a seller provides an existing survey)
Home inspection fee and any additional report fees (sewer scope, termite/WDI, foundation measurement, etc.)
Buyer’s share of escrow fees/closing fees charged by the title company/escrow company
Recording fees for the deed and deed of trust
Prepaid Costs: prepaid interest, initial escrow account for property taxes and homeowners insurance
Notary fees/courier fees for buyer docs
HOA fees charged to new owners (e.g., transfer, working capital) if applicable
Transfer taxes? Texas doesn’t impose state transfer taxes on real estate. You’ll still see recording fees at the county clerk for documents going into public records.
Typical Buyer Costs by Loan Type
Your Loan Estimate (delivered within 3 business days of application) estimates estimated closing costs and cash to close. What changes by loan type:
Conventional loans
Mortgage closing costs usually ~2–4% of the total loan amount (varies widely).
Seller Concessions are allowed, with limits based on down payment and occupancy (primary, second home, investment property).
FHA loan
Allows Seller Concessions (often up to 6% of the home’s sale price, per common practice), which can be used to reduce closing costs.
Upfront MIP and monthly mortgage insurance impact monthly mortgage payments.
VA loan
Some fees are limited/treated differently. Seller pays certain closing fees by custom in many Texas deals, and Seller Concessions can be reviewed with your lender.
Cash offer
No lender, so no loan origination fees, no appraisal requirement (unless you choose one), and dramatically lower buyer’s closing costs.
How to Reduce Closing Costs (Buyer & Seller Playbook)
If You’re the Buyer
Shop lenders. Compare Loan Estimates for lender fees/loan origination fees. Sometimes a slightly better rate with higher fees isn’t the best deal.
Ask for lender credits. You can often trade a slightly higher rate for a credit toward closing fees.
Request Seller Concessions. Especially with first-time homebuyers, closing cost assistance is common your real estate professional can structure this in your offer.
Close near month-end. Reduces prepaid interest on the first statement.
Consider a cash offer (if possible). Removes lender-driven costs (but keep a Survey fee and title fees in mind).
Down payment & DPA programs. The Texas Department of Housing and Community Affairs (Texas Community Affairs) and local agencies may offer down payment/closing cost assistance programs. Eligibility varies by income, location, and credit.
If You’re the Seller
Negotiate what the buyer is asking. You don’t have to agree to every concession; cap the Seller Concessions at a dollar amount tied to the home’s sale price.
Compare commission structures. Realtor commission/real estate agent commissions are contractual talk openly with your agent about commission fees and marketing plan.
Offer a home warranty only when it adds value. It’s an additional cost—don’t add it unless it helps win/keep the deal.
Consider a direct sale. If you want speed and fewer fees, a reputable cash buyer may cover closing costs and skip repairs/credits.
HOA & Neighborhood Items
HOA fees at closing often include an HOA resale certificate, transfer fees, and sometimes a working capital contribution for the homeowners association.
Who pays? Negotiable, but in many Texas contracts the seller pays for the resale certificate while the buyer pays the transfer/working-capital items. Your contract and HOA rules control.
What You’ll See on the Buyer’s Loan Estimate (At a Glance)
Loan fees: origination/underwriting/processing
Appraisal fees, Credit Report Fee, flood cert, tax service fee
Title fees & title insurance (lender policy)
Prepaid Costs: prepaid interest, first-year insurance, initial escrow account deposits for property taxes
Recording fees and Notary fees
Total closing costs and cash-to-close
Within three business days of application, your lender must provide the Loan Estimate. Three business days before closing day, you’ll receive the Closing Disclosure. Compare them and ask questions.
Seller’s Net Sheet (What Sellers Care About)
Start with home’s sale price, subtract:
Real estate agent commissions/commission fees
Owner’s title insurance premium (customary)
Seller’s closing costs (escrow/settlement share, recording fees to release liens/reconveyance fee, Notary fees, courier fees)
Prorated property taxes through closing date (based on the local property tax rate)
Any Seller Concessions/closing cost assistance you agreed to pay
Mortgage payoff (principal + interest + payoff fee) and any second liens
Unpaid HOA fees, special assessments, and Home warranties if promised
Bottom Line = your sale proceeds. Your title company can prepare this estimate early in the selling process so there are no surprises.
What Happens on Closing Day?
Signing the deed (seller), deed of trust/note (buyer’s loan), and other public records documents.
Funding: Buyer’s lender wires funds; buyer wires their cash-to-close.
Recording: The title company submits documents to the county for recording fees.
Keys: Once funded and recorded, keys go to the buyer.
Protect yourself: Confirm wire instructions directly with the title office by phone number you trust. Wire fraud is real. Never rely solely on email.
The Fast-Track Alternative (When You Want Certainty)
Don’t want the back-and-forth over who pays closing costs? You can sell as-is to a trusted local buyer. With Absolute Properties, many Texas sellers choose a cash offer that:
Covers many closing costs (no real estate agent commissions in most cases)
Skips repairs, showings, and delays
Lets Texas sellers pick the closing date
Brings a simple, good idea path when timelines are tight
Call or text: (713) 230-8059
Email address: info@absolutepropertieshtx.com
Send your address and we’ll present options no pressure.
Quick Reference: Who Pays What (Most Common, But Negotiable)
Seller (typical):
Owner’s title insurance premium
Real estate agent commissions
Prorated property taxes
Seller's share of escrow fees/closing fees
Recording fees for lien release/reconveyance fee
HOA resale certificate (often)
Home warranties (if agreed)
Any Seller Concessions/closing cost assistance promised
Buyer (typical):
Lender’s title insurance
Loan origination fees/lender fees
Appraisal fees, Credit Report Fee, and other report fees
Home inspection fee
Survey fee (when required)
Buyer's share of escrow fees/closing fees
Recording fees for deed/deed of trust
Prepaid Costs (interest, insurance, escrow account setup)
Notary fees/courier fees
Final Words
In Texas, who pays closing costs comes down to custom + contract. Sellers usually pay the owner’s title insurance and agent commissions; buyers usually pay lender fees, lender’s title insurance, appraisal fees, and Prepaid Costs. Everything else from HOA fees to escrow fees is a conversation point.
Want a simpler path? We’ll bring a fair, straightforward cash offer and cover many costs so you can move on without the financial burden of a drawn-out closing.
People over profits. Clear numbers. A closing that actually closes.