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Who pays for the closing costs in Texas? Common fees explained

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One of the most common questions we typically get from both home buyers and sellers is - Who pays for the closing costs in Texas?

Here is a list of customary distribution of expenses for the purchase of real estate in Texas. Keep in mind that many of these items can be negotiated by either party at the time of the offer, excluding some expenses the lender requires the seller to pay (depending on the type of loan). In addition, if you are selling your home, your listing real estate agent should provide you a “net sheet” with a good estimate of closing costs for you as the seller. Similarly, if you are buying a home, your realtor should be able to provide you a good estimate of potential closing costs in Texas. If you are buying a new home, the closing costs can be different.


HOME BUYER IN TEXAS TYPICALLY PAYS FOR:

• Option fee paid to the seller at the time of the contract - typically $25 to $50 per day

• Earnest money - paid to the title company - typically 1% of the purchase price

• Home inspection fees - depends on the size of the home - starts from around $400

Fees charged by the title company:

• Escrow fees - It is charged by the title company to act as an escrow agent - typical fee in Texas is $350

• Document preparation (if applicable) - It is charged by the title company - typical fee $100

• Recording charges for all documents related to the transfer of title to the buyer - It is charged by the title company - varies - typical fee is $125

• Title insurance premium: Lender’s Policy - This premium is fixed by state of Texas and depends on the sales price of the property

• Title policy riders like T-17, T-19 - These are optional but recommended

• Prorated share of property taxes (from the date of acquisition) - paid to the city at end of the year

• Homeowner’s transfer fee (if applicable) - depends on the HOA. Remember that some homes may have more than one HOA.

• Home insurance policy premium for the first year

Fees charged by the lender:

All new loan charges and fees charged by the lender (except those the lender requires the seller to pay), including:

– Home Appraisal - typical fee in Texas is $450 but could be more depending on the size of the home

– Credit report - typical fee is $50

– Loan origination/discount fee - varies with the lender

– Reserves for taxes and insurance - varies with the terms of the loan. Lender may require an escrow account based on the loan product offered to the buyer

– Flood certification - varies - Can be as low as $20

– Mortgage insurance premium - depends on whether the property is in a flood zone

-- Property survey (buyer typically pays for a new survey for new construction homes) and can cost anywhere from $400-$700

-- Interest on the new loan from the date of funding to 30 days prior to the first payment date

HOME SELLER IN TEXAS TYPICALLY PAYS FOR:

• Real estate agent’s commission(s) - for both buyer's agent and listing agent

• Escrow fees - It is charged by the title company to act as an escrow agent - typical fee $350

• Payoff of all loans in the seller’s name (unless the existing loan balance is being assumed by the buyer), including: – Interest accrued to the lender that is being paid off – Statement fees, release fees and any prepayment penalties

• Home warranty (according to contract terms)

• Any judgments, tax liens, etc. against the seller

• Prorated share of property taxes (for any taxes unpaid at the time of transfer of title)

• Any unpaid homeowners association dues

• Recording charges to clear all documents of record against the seller

• Any outstanding assessments

• Any and all delinquent taxes

• Title insurance premium: Owner’s Policy - This premium is fixed by state of Texas and depends on the sales price of the property - typically paid by seller for sale of existing homes

• Seller credit for closing costs (according to contract terms)

• Property survey (if the seller does not have an existing survey) and can cost anywhere from $400-$700

Get an edge

How can both buyers and sellers have an edge in the Southlake Texas real estate market?Employ the services of a Southlake real estate agent and a GRI REALTOR who has knowledge and experience of the market. Nitin Gupta, GRI, REALTOR can help you with your home purchase or sale.

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The above information regarding the “Who pays for the closing costs in Texas?" was provided by Nitin Gupta, REALTOR. Nitin has experience helping families buy and sell homes in the Dallas/Fort Worth area. If you’re thinking of selling or buying, he would love to share his knowledge and expertise. Learn more about Southlake real estate market and Tarrant County Real Estate news at http://www.nitinguptadfw.com/southlake-realtor-new-homes-real-estate

The communities Nitin proudly serves include University Park, Coppell, Frisco, Flower Mound, Southlake, Grapevine, Keller, Plano & Colleyville.

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