Who pays what in a Texas closing.
Custom is the starting point. The contract is the answer. Here is the difference.
Almost nothing here is a rule. The contract decides, and the contract is negotiable. What follows is what customarily happens in Texas, which is the starting point your clients will assume until someone tells them otherwise.
Customarily the seller
- The owner's title policy for the buyer
- Payoff of existing loans, and any liens that have to clear
- Their share of the year's property taxes, prorated to closing
- Release and recording fees on items being paid off
- Their own broker's compensation, and anything agreed in Paragraph 12
- HOA transfer and resale certificate fees, though this one moves around
Customarily the buyer
- Loan costs: origination, appraisal, credit, and the lender's title policy
- Survey, unless the seller is providing an existing one
- Their share of taxes and any prepaid escrows the lender requires
- Recording the deed and deed of trust
- Inspections and anything ordered during the option period
- The option fee and earnest money, which are credited at closing
The ones that are always negotiated
- Who pays for the owner's policy. Custom says seller, the contract says whoever the box says.
- Survey. New, existing, or provided by seller. This gets decided in the contract and it affects the timeline as much as the money.
- Survey coverage on the policy. A separate election, and a small premium.
- Seller contributions toward buyer costs, which live in Paragraph 12 and are now more clearly separated from broker compensation.
- Home warranty, which is entirely negotiable and often forgotten until late.
The part clients get wrong
Buyers hear "the seller pays for title" and assume they have no title costs. They do: the lender's policy is theirs, and it protects the lender rather than them. Explaining that early prevents an uncomfortable conversation at the table.
The other one is prorations. Taxes are split at closing based on the date, not on who lived there when the bill arrives, and sellers are frequently surprised to be paying for a portion of a bill they never received.
Get real numbers, not customs
Custom tells you the shape. It does not tell you the amount. Run an estimate before your client signs anything so the number they see at the table is the number they already expected.
Every file is different, and underwriters can view the same facts differently depending on the details. Confirm the specifics with your escrow officer. Title and lender requirements are separate, so clearing one does not mean you have cleared the other.