Closing costs in Texas

In the state of Texas, a typical home costs $266,667, with buyers paying an average of 1.41% in closing costs. This puts the average closing cost in Texas in 2020 at $3,754 — below the national average.

How much you actually pay will depend on the price of the home and whether the seller agrees to help cover the costs. Let’s take a closer look at how closing costs in Texas work and where you can potentially save some cash.

Closing costs stats in Texas

Data	Value
Average home sale price	$200,000 to $300,000
Average total closing cost	$3,753.65
Expected closing cost range	$2,502.43 to $5,630.48
Percentage of closing cost to home sale price	1.25% to 1.88%

Average closing costs in Texas

According to research from ClosingCorp, the average closing cost in Texas is 1.41% of the purchase price. It may seem like a small number, but this percentage can quickly escalate into the tens of thousands if you’re buying an expensive home.

What fees make up the closing cost?

Standard closing costs

Some closing costs are fixed, like the appraisal and recording fees. Other fees you can shop around for, including the title insurance and home inspection. Closing costs are typically made up of the following fees.

• Appraisal
• Recording fees
• Transfer tax
• Lender’s title policy
• Owner’s title policy
• Home inspection
• Settlement fees

Other closing costs in Texas

In Texas, buyers may also have to pay a land survey fee as part of their closing costs. While land survey fees are generally not part of closing costs, they are required in two states — Texas and Florida. In Texas, buyers can expect to pay $250 and up for a land survey, depending on the size of the land.

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Who pays closing costs in Texas?

In most states, including Texas, closing costs are divided between the buyer and seller, but the buyer pays the bulk of the fees and taxes. Your closing costs will vary depending on the selling price, down payment amount and credit score.

For the buyer

Name	Cost
Land survey fee	$250 to $500 and up, based on land size
Attorney and settlement fees	$450 and up
Recording fees	$200 or less
Transfer taxes	$0
Postage and courier fees	$35
Homeowner’s insurance (12 months prepaid at closing)	$1,000 to $1,500
Upfront mortgage insurance premium (MIP) for FHA loans	MIP = 1.75% of the FHA base loan amount For example: $200,000 loan = $3,500 $300,000 loan = $5,250
Prepaid daily interest charge (15 days)	$170 and up
Settlement and closing fees	$500 to $700
Escrow deposit for property taxes & homeowner’s insurance	$1,000 to $1,500
Environmental certification report	Varies

For the seller

Name	Cost
Broker fees	Around 6% of sales price
Postage and courier fees	$35
Mobile notary, if needed	$25 to $100
Own attorney fees	Varies
Tax certificate	$40 to $70
Title insurance	$238 to $875 for policies from $10K to $100K; varies for policies above $100K
Recording fees	$200 or less
Document preparation fee	$100 to $150
Mortgage payoff	Subject to loan balance
Real estate tax	Prorated at closing
Escrow fee	$350 to $700

Remember, the averages shown are based on sample data. Your closing costs may vary based on your lender, the size of your loan and whether or not you’re paying in cash.

How much does transfer tax affect the closing cost in Texas?

In Texas, buyers and sellers aren’t required to pay any taxes on the transfer of real estate. Many states charge around $1 per $500 of the value of the property transferred, but Texans get to save on taxes here.

How do closing costs in Texas compare nationally?

In 2020, the average closing cost for a single-family home in the US was $6,087 with taxes, putting Texas’ average closing cost at $3,754 below the national average. Compared to other states, it currently ranks 27th out of 50 states for closing costs.

By comparison, buyers in Delaware, District of Columbia and New York pay the highest closing costs in the nation, while buyers in Indiana, Kentucky and Missouri pay the lowest closing costs of all homebuyers.

How are closing costs paid?

If you’re buying a home, closing costs must be paid in cash and can’t be rolled into your mortgage payment, as they can with a mortgage refinance. Budget these costs into your home purchase and plan on how you will cover these costs at closing time.

That said, you can always try negotiating on your closing costs to help reduce your out-of-pocket expenses.

Can I negotiate on my closing costs?

Yes, it’s possible. Most buyers will need to set aside cash to pay for their closing costs, however you do have some negotiating tools in your arsenal, such as:

• Asking the seller if they’re willing to cover a part of these fees.
• Asking the lender if you can “buy up” your interest rate in exchange for paying all or part of your closing costs.

Is it possible to avoid paying closing costs?

Yes. There is such a thing as a no-closing-cost loan. But not all lenders offer them and you’ll likely end up paying a higher interest rate for this type of loan.

How can I ensure I’m paying the lowest closing costs possible?

The best way to find the lowest closing costs is to shop around. Whenever you apply for a loan, you’ll get a loan estimate that breaks down the different fees. Use this fee disclosure as a negotiating tool when comparing lenders to ask if another lender can cut you a better deal. Doing so could save you thousands in fees and interest on your Texas mortgage.

Bottom line

Closing costs in Texas will vary depending on the county, the type of property you’re buying and the total sale amount. While both the buyer and seller pay closing costs, the buyer pays the bulk of the fees and taxes, which on average, currently run about 1.41% of the home’s purchase price.

The good news is, it’s possible to minimize your closing costs by comparing brokers, title companies, attorneys and our researched list of the best mortgage lenders in Texas.

Frequently asked questions

Do I need to hire an attorney for closing?
No. In the state of Texas, you’re not legally required to hire an attorney to close on a home.

I’m paying in cash. Do I need to pay closing costs?
If you’re buying in cash, you might not need to cover these mortgage-related closing costs:

• Appraisal fee
• Inspection fee
• Title insurance
• Mortgage insurance
• Intangible tax on mortgage

While you can avoid these charges, it’s always a good idea to get the home appraised and inspected and purchase a homeowner’s title insurance policy to avoid any expensive legal problems down the road.