Closing Costs in Texas: What Buyers and Sellers Actually Pay
Why Closing Costs Catch Texas Buyers Off Guard
Many Texas homebuyers focus entirely on the down payment — then get surprised when they see the closing disclosure showing thousands more in fees. Closing costs are real, they're substantial, and knowing what to expect ahead of time makes you a far better-prepared buyer.
In Texas, total closing costs typically run 2–5% of the purchase price for buyers, and 1–3% for sellers (outside of commissions).
What Buyers Pay at Closing in Texas
Buyer closing costs generally fall into three categories:
Lender Fees
Origination fee – typically 0.5–1% of the loan amount
Discount points – optional, used to buy down your interest rate
Credit report fee – $25–$75
Underwriting fee – $400–$900
Third-Party Fees
Appraisal – $500–$700
Survey – $400–$700 (if a new one is required)
Title insurance (lender's policy) – varies by loan amount
Title insurance (owner's policy) – in Texas, sellers customarily pay this
Escrow/settlement fee – $300–$600
Home inspection – $300–$600 (paid before closing)
Prepaid Items and Escrow Setup
Homeowner's insurance – first year's premium paid upfront
Prepaid interest – covers interest from closing date to your first mortgage payment
Property tax escrow – 2–3 months of property taxes deposited into escrow
HOA fees – prorated at closing if applicable
What Sellers Pay at Closing in Texas
Texas sellers typically pay:
Owner's title insurance policy – this is a Texas custom; sellers almost always pay this
Real estate commissions – traditionally 5–6% total; with KAT Realty's flat fee model, our buyers avoid percentage-based buyer agent fees
Property tax proration – seller pays taxes for the portion of the year they owned the home
HOA transfer fees – varies by HOA
Attorney fees – if applicable
Can You Negotiate Closing Costs in Texas?
Yes — several strategies can reduce what you pay:
Seller concessions – You can ask the seller to contribute to your closing costs. On a $400,000 home, asking for $8,000 in seller contributions is common and often granted in a buyer's market.
Lender credits – Accept a slightly higher interest rate in exchange for the lender covering some fees upfront.
Shop your lender – Fees vary significantly between lenders. Always compare Loan Estimates.
Ask about waivers – Some fees (like underwriting) are negotiable.
How Much Cash Should You Budget for Closing?
On a $350,000 Texas home with a conventional loan:
Down payment (5%): $17,500
Closing costs (3%): ~$10,500
Total cash needed: ~$28,000 (before any seller concessions)
With seller concessions or lender credits, this number can come down meaningfully.
How KAT Realty Saves Texas Buyers on Closing Costs
At KAT Realty, our flat fee of $4,999 means you're not paying a percentage-based buyer agent commission—saving most buyers $8,000–$15,000 compared to traditional 3% buyer agent fees. That's money that stays in your pocket at closing.
We also help you strategize seller concessions and review your Loan Estimate to make sure you're not paying more than you should. Contact KAT Realty to learn more about buying smarter in Texas.
