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Buying or selling a home in Texas comes with a unique set of closing costs that can surprise people if they’re not prepared. The good news? Once you know what to expect, they’re easy to plan for.
Below is a straightforward breakdown of what closing costs typically look like across the Lone Star State.
What Are Closing Costs?
Closing costs are the fees and expenses due when a home officially changes hands. They’re separate from your down payment and can include lender charges, title fees, taxes, and prepaid items like insurance.
Both buyers and sellers pay closing costs, but the amounts vary.
Closing Costs for Buyers in Texas
Buyers in Texas usually pay 2%–5% of the home’s purchase price in closing costs.
Example: On a $400,000 home, buyer closing costs typically fall between $8,000 and $20,000.
Common Buyer Closing Costs Include:
- Loan origination and lender fees
- Appraisal and credit report
- Title insurance (usually paid by the buyer in Texas)
- Survey fees (often buyer-paid)
- Recording fees
- Prepaid insurance and taxes
Because Texas doesn’t have a state income tax, property taxes are higher than in many states, so prepaid tax escrows can make up a noticeable portion of a buyer’s closing costs.
Closing Costs for Sellers in Texas
Sellers generally pay around 1%–3% of the sale price plus real estate commissions.
Example: On a $400,000 home, sellers may pay around $4,000–$12,000 in closing costs before agent commissions.
Common Seller Closing Costs Include:
- Title search and settlement fees
- Prorated property taxes
- HOA fees, if applicable
- Real estate agent commissions (typically 5%–6% unless negotiated)
How Closing Costs Work for New Construction Homes
With new construction homes, closing costs are established upfront instead of being negotiated like they might be with resale homes. To make the process more budget-friendly, builders often introduce incentives that may include covering closing costs.
The Bottom Line
- Buyers: Plan for 2%–5%
- Sellers: Expect 1%–3%, plus commissions
- Everyone: Costs vary by county, loan type, and contract terms
Whether you're financing a new home or trying to understand your upfront costs, M/I Financial is here to walk with you through every step. Our team makes lending simple by explaining your options clearly, helping you estimate closing costs, and providing competitive rates tailored to your needs. (NMLS# 50684)
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