Texas Real Estate Closing Costs Statistics (2024 Survey)
A new RealEstateBees.com survey of over 1,000 active real estate professionals found average closing costs for sellers and buyers in Texas.
We reached out to over 1,000 active real estate professionals from Texas to collect their insight on the real estate closing costs across the state.
The results are part of the large-scale survey—Nationwide Real Estate Closing Costs Index—conducted by the Real Estate Bees, a leading online real estate platform.
What Is Included in Closing Costs for a Seller in Texas?
Costs included in seller’s closing costs most commonly across Texas.
What Are Average Closing Costs for a Seller in Texas When Selling with a Realtor?
The most common amounts of seller’s closing costs across the state of Texas in an agent-assisted sale.
What Are Average Closing Costs for a Seller in Texas When Selling 'by Owner'?
The most common amounts of seller’s closing costs across the state of Texas in a FSBO sale.
How to Reduce Closing Costs for a Seller in Texas?
Many of the closing cost fees are negotiable in terms of who pays for them. Here are some strategies to keep in mind:
Negotiate with the buyer. Depending on the real estate market and the buyer’s motivation, the seller may be able to negotiate with the buyer for a lower sale price to offset the cost of closing costs.
Shop around for third-party services. Lenders may have preferred sources for third-party services; however, the seller is not obligated to use them, and they can save by shopping around for better rates on things like title insurance, inspections, and appraisals.
Reduce real estate agent commission. The seller can work with their agent to negotiate a lower commission rate, which can be used to cover the cost of closing costs.
Avoid costly repairs. In order to avoid last-minute repairs that can be costly, sellers can get a pre-listing inspection to identify any repairs that need to be made before listing the property for sale.
Be aware of tax deductions. The seller should keep track of all closing costs, as some of them may be tax-deductible. For example, any points paid on the mortgage and fees related to transferring the home are often tax-deductible.
It’s important to note that not all of these strategies may be feasible for every seller, and it’s important to consult with a real estate professional to determine the best course of action.
Find a good Realtor. You may think you’re saving money by doing it yourself, but In reality, for sale by owner homes sell for much less than those sold by a professional.
You will likely still need to pay a buyers’ agent, so the possible savings is only 3%. You’ll probably lose that in pricing it wrong, negotiations, or when you’re not able to protect yourself with the right disclosures.
Can a Seller Avoid Paying Closing Costs in Texas?
No, you can’t avoid taxes either. Plan to own a home for 3+ years to offset the closing costs.
Homes appreciate 4% per year on average and purchases should only be made if you plan on owning the home for more than 3+ years.
If a seller tried to act as the realtor and tried to FSBO (for sale by owner), they could try and save some money that way.
They could negotiate with the buyer to pay them, but then they are likely just selling the home for less.
A seller cannot avoid paying closing costs entirely, but they can be dramatically reduced.
If the seller can’t afford the closing costs, they can:
1. Wait to sell their home.
2. Price their home at the top of the market to ensure the proceeds can pay for the closing costs.
3. Sell their home to an investor with creative financing.
The seller is making a profit (hopefully) on the sale of their house. So if they cannot afford to pay their share of closing costs, then they probably shouldn’t be selling in the first place.
Ultimately if they cannot afford to pay for their closing costs, trying to sell FSBO would be their best option.
Stay in the home longer to let the home appreciate more, explore seller financing, rent the home out, look for a Texas real estate investor that may be willing to work out a deal, or short sale back to the bank.
Either cancel the sale or the Texas real estate brokerage can agree to reduce their commission.
Work them into the buyer’s closing costs.
Negotiate with the buyers and realtors.
What Is Included in Closing Costs for a Buyer in Texas?
Costs included in buyer’s closing costs most commonly across the state of Texas.
What Are Average Closing Costs for a Buyer in Texas When Buying with a Realtor?
The most common amounts of buyer’s closing costs across the state of Texas in an agent-assisted sale.
What Are Average Closing Costs for a Buyer in Texas When Buying Without a Realtor?
The most common amounts of buyer’s closing costs across the state of Texas in a FSBO sale.
What Are Average Closing Costs for a Cash Buyer in Texas When Buying with a Realtor?
The most common amounts of closing costs paid by Texas cash home buyers in an agent-assisted sale.
What Are Average Closing Costs for a First-Time Buyer in Texas When Buying with a Realtor?
The most common amounts of a first-time home buyer’s closing costs across the state of Texas in an agent-assisted sale.
How to Reduce Closing Costs for a Buyer in Texas?
Certain closing costs, such as local taxes, must be paid by a certain party. There’s no negotiating there.
However, some fees, such as the survey and appraisal fees, can be paid by the seller if you can negotiate a deal.
Another option to consider is negotiating a lower commission with your real estate agent.
In Texas, as in most states, the seller is responsible for paying realtor commissions for both the buyer and seller’s agent.
But this cost is usually passed on to the buyer in the form of a higher sale price on the home. Negotiating a lower realtor commission can help you lower the sale price.
One caveat to all of this: If you negotiate with the seller to get some of your closing costs covered, remember that it’s a negotiation and the seller can always walk away and go with another buyer.
So be prepared to give something to the seller in exchange for covering closing costs.
There are a lot of things you can work with when you negotiate with a seller.
You can offer things like a longer timeline for them to move out or offer to remove any furniture they can’t take with them or cover certain house repairs.
When you buy a property in Texas, you can negotiate some costs to be paid by the seller in the right market. Typically the seller pays the commission and title policy and the buyer pays the lending fees.
Save your cash or wait until you have the cash to make it happen.
Increase the interest rate to obtain a lender credit, but that’s really only beneficial if they plan on refinancing or selling within a few years.
Negotiating for the seller to give a dollar amount for seller concessions on the contract can reduce or completely pay for the buyer’s closing costs.
There will almost always be legal fees and fees to be paid to the Texas escrow company. Loan fees can be eliminated by paying all cash.
You can ask the seller, realtor, or loan officer to contribute towards closing costs.
Get seller-paid closing costs for the buyer worked into the purchase contract.
How to Negotiate Closing Costs With a Seller in Texas?
Closing costs can be negotiated between the buyer and seller.
In some cases, the buyer may request that the seller cover certain closing costs, while in other cases, the seller may be willing to negotiate a lower sales price to offset some of the buyer’s closing costs.
Ultimately, the terms of the negotiation will depend on the specific circumstances of the transaction and the willingness of both parties to compromise.
It’s always a good idea to ask your lender and real estate agent which closing costs are negotiable in your particular situation.
Negotiate the sales price, then increase it by the amount of your costs you want them to pay.
Can a Buyer Avoid Paying Closing Costs in Texas?
There are certain items that buyers are required to pay when closing a real estate transaction.
However, many of the fees can be negotiated with the seller. Further, the buyer can typically avoid paying anything out of pocket by rolling the closing costs into the mortgage loan.
Yes, by negotiating with the seller to give a dollar amount for seller concessions on the contract. This can reduce or completely pay for the buyer’s closing costs.
If the seller pays them all for the buyer, which is not very likely.
Pay cash for the home or do a 1031 exchange to avoid lender fees.
Are There Closing Costs Assistance Programs Available for Buyers in Texas?
The most straightforward way to reduce your closing costs is to get more money to pay those costs upfront. Down payment assistance programs can do that.
Most down payment assistance programs let you use the funds to cover closing costs.
Most programs also allow you to accept funds from more than one down payment assistance program, meaning you could potentially get thousands or even tens of thousands of dollars to put toward your closing costs and down payment.
Stairs Financial brings all this information together in one place.
You don’t need any gimmicky programs. Every Texas real estate lender should be able to increase the interest rate on the loan to get a lender credit to pay the closing costs.
If your lender can’t, that’s a huge red flag that they have already priced your loan with the maximum interest rate and are pocketing the credit themselves.
Yes, there is. The local lenders would have the information on who can and how to qualify.
One must meet certain requirements, e.g., make under a certain income, look in certain zip codes, etc.
Who Pays Closing Costs in a Conventional Sale in Texas?
Who Pays Closing Costs in a Cash Sale in Texas?
Are Closing Costs Negotiable in Texas?
What Are the Available Ways to Pay Closing Costs in Texas?
Why Are Closing Costs So High in Texas?
Closing costs can be relatively high in Texas compared to other states for several reasons.
Title insurance: Texas has high title insurance rates compared to other states, which can significantly contribute to closing costs.
Title insurance protects the buyer and lender from any defects in the property title, ensuring a clear ownership transfer.
Property taxes: Property taxes in Texas are among the highest in the country.
During the closing process, property taxes are prorated and pre-paid for the period the seller owned the property. This can lead to higher closing costs for sellers.
Escrow and recording fees: Texas has specific fees for escrow and recording services that contribute to closing costs.
These fees cover the administrative tasks involved in processing and recording the sale transaction.
Transfer taxes: While Texas does not have a state transfer tax, some counties impose a transfer tax or fee on real estate transactions. These taxes or fees can vary by county and increase closing costs.
Third-party services: The costs associated with third-party services, such as appraisals, inspections, surveys, and attorney fees, can add to closing costs.
Prices for these services can vary, and sellers are typically responsible for paying for these when required.
It’s important to note that closing costs can vary depending on factors like the property value, location, and specific transaction details.
People, especially first-time home buyers, assume that closing costs only consist of the percentage down for the loan.
They don’t realize that they are essentially paying the lender and the Texas title company for their services to process the transaction.
I always tell my buyers in a buyer consultation that there are two types of closing costs:
1. The percent down for the loan (e.g. 3.5% FHA, 5% conventional, 10% conventional, 20% conventional or nothing for a VA loan)
2. The cost for using lender/title services. This can equal anywhere between 2-4% of the sale price.
For example, for a $200,000 home bought with a FHA loan with 3.5% down on the loan, the closing costs can be computed as follows:
3.5% down on the loan: $7,000
Average 3% for services: $6,000
Total closing costs: $13,000
How much you have as a down payment and earnest money usually plays a large factor on how much you will pay in closing costs.
Typically the larger your down payment and more money you put for earnest, the lower your closing costs will be.
Closing costs are all costs associated with the sale at the time of closing. Realtors, lenders, Texas property appraisers, title companies, and Texas real estate attorneys all need to get paid.
It adds up, but is a relatively small cost when calculated as a percentage of the sale.
The closing costs for the seller are based upon the amount of the property, which is then correlated to the cost of the title policy.
Closing costs are high due to the cost of financing and the requirement to have title insurance.
Loan points are the most expensive item.
Who Pays Closing Costs in a Divorce in Texas?
Generally, during divorce, there is no rule of thumb for which spouse pays for closing costs of the sale of a home. This is part of the overall negotiation process.
If the wife is buying the marital home, she may opt to pay for all of the closing costs herself, or factor them into the overall equity buyout of the house. For example:
Home costs: $1M
Closing costs: $20,000
Equity in the home: $500KIn this scenario, she would have to find $250K of other assets to give her spouse since they are splitting an asset with $500K.
She could deduct the $20K from the equity of $500K, leaving an asset split of $480K. This way, she would only have to find $240K of other assets to give her spouse.
Essentially, he would pay half of the closing costs. But this is just one way to look at it.
In Texas, which is a community property state, assets and liabilities are split 50/50 as a general rule. But, whatever the couple agrees is fair is negotiable.
When selling real estate during a divorce, the closing costs are split between the two spouses. It is done either directly or through the division of the proceeds from the sale.
Each spouse is responsible for their own closing costs, or in some cases, they split the costs evenly. Sometimes they negotiate the division of closing costs in the divorce settlement agreement.
In Texas, usually, it’s the seller who is responsible for paying for the title insurance, transfer taxes, and any necessary legal fees related to selling the property.
Other closing costs, such as the commission for the Texas real estate agents, loan origination fees, and prorated taxes, are split between the two spouses.
Again, depending on the terms of the divorce settlement agreement, other fees like the appraisal fee, survey fees, and closing costs for the lender are split between the spouses as well.
Who owns the house?
If ordered to be sold as part of the divorce by the two of them, the closing fees come off the top.
If being sold before the divorce and we are trying to figure out ‘real equity’, some folks like to give the value a 6-8% haircut because sometime in the future it will be sold and that is taken away.
What Are the Transfer Taxes in Closing Costs in Texas?
In Texas, transfer taxes are at a rate of $.50 per $100 of value and are based on the sales price. This means if the property sells for $200,000, $1,000 in transfer taxes would be due.
The seller may also need to pay for other closing expenses, such as title insurance, title examination fees, closing costs, recording fees, notary fees, and other relevant expenses, in addition to the transfer taxes.
Who Pays Transfer Taxes in Closing Costs in Texas?
At the moment, both sides need to pay closing costs in Texas. For the seller, it usually adds up to 8%-10% of the sales price. For the buyer, it’s around 2%-6% of the purchase price.