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When you buy a house, you don’t need to pay for the entire cost upfront in cash. You do, however, need to have more than just your down payment ready. That’s because every real estate transaction includes closing costs to make the deal official. These out-of-pocket costs depend largely on the location of the home.

For instance, if you're buying a house in Texas, you can expect to pay slightly more than the national average in closing costs. However, Texas closing costs are still relatively affordable compared to other states.

Average closing costs in Texas

According to , the national average for mortgage closing costs on a single-family home, excluding transfer taxes, was $3,860 in 2022. In Texas, those costs are an average of $4,548. This represents about 1.5% of the average home sale price in Texas. Texas, however, does not levy transfer taxes on real estate sales.

Ultimately, the average closing cost for buyers ranges from 1% to up to 6% of the home’s purchase price. Sellers should expect to pay from 6% to 10% of the home’s purchase price, including real estate agent commissions.

Calculating your estimated closing costs is fairly simple. (It’s even simpler if your mortgage lender provides you a detailed report of what you can expect to pay at the closing table.) But if you want a conservative estimate, just take 3% of the price you expect to pay for the house. For instance, if you’re paying $400,000, then multiply $400,000 by .03 — that’s $12,000.

Who pays closing costs in Texas?

In Texas, as in most states, both buyers and sellers pay closing costs. However, it’s not just a 50-50 split on everything. There are different costs associated with buyers and sellers.

Buyer closing costs

Buyer closing costs in Texas tend to be smaller costs, but there are quite a few of them. This is what buyers can expect to pay:

• Loan application and origination fees: Fees to the lender for processing your paperwork and setting up your loan.
• ‍Credit report fee: Your lender will pull credit reports a few times during the loan application process to ensure your finances remain in order. Buyers have to pay for each credit report.‍
• Appraisal fee: A lender will get an appraiser to assess the home’s value and ensure the home is worth what you’re buying it for. Buyers pay for this.‍
• Home inspection: This step is frequently waived these days in competitive markets, but if you’re getting a home inspection, it’s typically paid for by the buyer. And it’s never a good idea to skip a home inspection.‍
• Survey fee: Many property owners don’t know precisely where the property line is, so if you want to know for sure, you may get a professional survey during closing.‍
• Prepaid costs: Closing often covers a number of costs for your first year of ownership, including homeowners insurance, private mortgage insurance premiums, or prepaid interest.‍
• Discount points: If you’re paying discount points to lower your interest rate, this will be included in your closing costs. But many buyers don’t actually pay for discount points.

Seller closing costs

In Texas, sellers have fewer closing costs than other states, but they still typically pay one of the largest costs — agent commissions. These are the closing costs that sellers in Texas can expect to pay.

• Real estate agent commissions: Real estate agents get paid on commission, and sellers typically pay both the seller and buyer agent fees. Each agent gets 3%, so expect to spend 6% of the sale price at the closing table. (Read about the average Texas real estate commission.)

• Attorney fee: Texas doesn’t require an attorney at the closing table, but it’s still a good idea to have one prepare closing documents.

• Homeowners ssociation documents: If you’re selling a home in a homeowners association (HOA), you must provide the buyer a copy of the HOA bylaws, which may incur a fee to get. Both of you will also need an estoppel letter, or resale certificate, too.

• Reconveyance fee: If a lender has a lien against your home, you must pay a reconveyance fee to remove the lien to sell the home.

• Seller concessions: As part of a negotiation, sellers may agree to pay some buyer closing costs, like prorated property taxes or a home inspection fee. The maximum that a seller can concede to a buyer is 9% of the home’s purchase price.

Shared closing costs

There are a number of negotiable closing costs in Texas, too. As long as they get paid, it doesn’t matter who pays them, so they’re typically split evenly between buyer and seller.

• Escrow fees: Escrow companies process the money involved in a home sale and send it where it needs to go.

• Title search and insurance: Title searches protect the sellers to ensure they have the right to sell the home. Title insurance protects the buyer should any ownership claim of the property come up down the road. As such, these costs are typically split.

• Municipal lien search: Like a title search, a lien search ensures that the city has never put liens on a property for code violations or improper building permitting.

• Recording fees: Typically, the buyer pays recording fees for filing home mortgages and deeds with the county. The seller, however, pays an additional recording fee to update records if they resolve unpaid bills or liens.

• Notary fees: Texas has many free notaries, but should you have to pay for notarization of any documents, this cost is usually split.

How to save on closing costs in Texas

Buying a home is expensive, and selling one isn’t all profit, either. Fortunately, you don’t have to resign yourself to paying top dollar in closing costs. Here are some ways to save on closing costs in Texas.

• Lender credits: No, lenders don’t pay the closing costs for you in a lender credit, but they can help you save on upfront costs. Instead, the closing costs are added to your mortgage amount, plus interest. You’ll save upfront, but you’ll ultimately pay more so it’s not a preferred option.‍
• State assistance: Some home buyers may qualify for closing cost assistance programs offered by the state of Texas. For instance, the Southeast Texas Housing Finance Corporation (SETH) offers 5% and 7% of the total loan amount toward the closing costs for qualified buyers in some southeast Texas communities. The Texas Department of Housing and Community Affairs (TDHCA) also offers closing cost assistance to fire-time home buyers and veterans through its My First Texas Home Program. The My Choice Texas Home program is open to all qualified home buyers. Any state assistance program, however, will require you to meet income, sale price, and credit score stipulations.‍
• Negotiation: Finally, good old fashioned negotiation may be your best chance to save money on closing costs. Your real estate agent will have a lot of closing experience and can advise you (whether you’re buying or selling) if there’s some wiggle room for negotiation on closing costs.