Closing costs can feel confusing, especially if you are trying to plan your cash and timing. If you are buying or selling in Dallas, you may be wondering who pays what, how much to budget, and what is negotiable. In this guide, you will see the typical cost split in Dallas, Texas-specific rules that influence your bottom line, and simple examples you can use to estimate your numbers. Let’s dive in.
Quick answer: who pays what in Dallas
In Dallas, buyers usually cover their loan and inspection costs, plus prepaid taxes and insurance. Sellers typically pay the real estate commission and, by local custom, the owner’s title insurance premium. Many fees are negotiable, and credits can shift costs between parties.
- Buyer costs commonly total about 2% to 4% of the purchase price, excluding your down payment.
- Seller costs are driven by commission, often 5% to 6% of the sale price, plus the owner’s title policy and prorations.
- Texas has no state real estate transfer tax, which removes a common seller fee seen in other states.
Buyer closing costs in Dallas
Your out-of-pocket buyer costs usually include:
- Loan fees: origination, processing, and underwriting.
- Appraisal and credit report.
- Lender-required title policy and lender title charges.
- Title or escrow closing fees, sometimes split by local custom.
- Recording fees for your deed and mortgage.
- Prepaids and escrows: homeowner’s insurance, property tax escrow, and prepaid mortgage interest.
- Inspections: general home inspection and any specialty inspections you order.
- HOA-related buyer fees for document packages or transfers when applicable.
- Survey if required by your lender or contract.
Plan for about 2% to 4% of the purchase price for buyer closing costs. Your exact figure will depend on your loan type, lender, property taxes, and title fees.
Texas customs that affect buyers
- Owner’s title insurance is customarily paid by the seller in Texas. You typically pay the lender’s title policy and lender-related title charges.
- Property tax escrows and prepaids can be meaningful. Texas relies heavily on property taxes, so your lender may collect initial escrow deposits at closing, which can increase your cash to close.
- Dallas County recording fees are typically modest, but you will likely pay to record your deed and mortgage.
- In HOA or condo communities, buyers often pay buyer-side HOA transfer or setup fees as negotiated in the contract.
Seller closing costs in Dallas
If you are selling, your main costs include:
- Real estate commission, commonly 5% to 6% of the sale price, paid from your proceeds.
- Owner’s title insurance premium and standard seller-side title or closing fees, which vary by title company and price point.
- Prorated property taxes and HOA dues through the closing date.
- Payoff of your existing mortgage and any liens or judgments.
- Recording fees for releases of your mortgage.
- Any seller-paid repairs, home warranty, or credits agreed to in the contract.
Texas does not charge a state transfer tax, which lowers your closing burden compared to many other states.
Texas customs that affect sellers
- It is customary in Dallas for the seller to pay the owner’s title policy. Title insurance premium rates are regulated in Texas. Your title company can quote the exact premium based on the contract price.
- Property tax prorations are calculated based on the latest available tax bill or an estimate. You pay your share through the closing date.
- For homes in Municipal Utility Districts or other special districts, confirm any required payoff, assumption, or transfer steps early.
How seller concessions and credits work
A seller concession is when the seller agrees to pay part of the buyer’s closing costs or provide a credit at closing. Concessions reduce the buyer’s cash needed at closing and reduce the seller’s net proceeds.
Common credits you will see in Dallas:
- A set dollar credit toward buyer closing costs or prepaids.
- Seller-paid rate buydowns, either temporary or permanent, to reduce the buyer’s interest rate.
- Seller-paid title or escrow fees when negotiated.
- Repair credits instead of completing repairs before closing.
Loan program rules limit concession amounts. Limits vary by loan type and down payment. Always confirm the maximum allowed with the buyer’s lender before you negotiate.
Practical tips:
- Ask the lender for the program-specific maximum concession early.
- Request a specific dollar amount, not a vague “pay closing costs.”
- Compare a price reduction versus a credit. A credit typically lowers the buyer’s cash-to-close, while a price reduction changes the loan amount. Your lender can show the impact.
Dallas and Texas details that shape closing costs
- Title insurance practices are Texas-specific. The seller typically pays the owner’s policy, and the buyer pays the lender’s policy. Rates follow a state-regulated schedule.
- TREC contract forms are widely used and include lines to assign who pays each fee, plus space for seller concessions.
- Property tax prorations are standard. Lenders often set up an escrow for taxes and insurance, which affects a buyer’s cash to close.
- HOA, condo, and special district fees vary by community. Confirm required estoppels, statements, and any transfer fees early.
- Dallas County charges recording fees for deeds and mortgages. Expect these to appear on your closing statement.
Example estimates you can model
Below are simplified examples to help you plan. Your actual costs will vary by loan, lender, title company, and taxes.
Example A: $400,000 Dallas purchase
Buyer estimate at 2% to 4% of price:
- At 2%: $8,000 for buyer closing costs.
- At 4%: $16,000 for buyer closing costs.
- Typical items: loan fees, appraisal, inspections, lender and title charges, plus escrow deposits for taxes and insurance. Down payment is separate. For example, 5% down is $20,000.
Seller estimate:
- Commission at 6%: $24,000.
- Owner’s title premium and seller closing fees: $1,000 to $3,000 depending on title schedule and services.
- Plus prorated taxes, mortgage payoff, and any HOA or special district items.
Example with a seller credit:
- Buyer requests an $8,000 credit for closing costs.
- Seller’s net drops by $8,000. If price is increased to offset, confirm with the buyer’s lender that the appraisal and loan still support the higher price and the credit.
Example B: $600,000 Dallas purchase
Buyer estimate at 2% to 4% of price:
- At 2%: $12,000 for closing costs.
- At 4%: $24,000 for closing costs.
- Prepaids for taxes and insurance can be a larger factor at this price point.
Seller estimate:
- Commission at 6%: $36,000.
- Owner’s title premium and other seller-side fees vary by title company.
- A $10,000 seller credit would reduce seller net by that amount, unless the price is adjusted.
Quick calculators you can use
Use these simple steps to create a ballpark estimate before you get official numbers from your lender and title company.
Estimate buyer cash to close
- Down payment: pick your percentage times price.
- Buyer closing costs: estimate 2% to 4% times price.
- Prepaids and escrows: include one year of homeowner’s insurance plus a few months of property taxes and mortgage interest as your lender advises.
- Subtract seller credits if any.
- Cash to close ≈ Down payment + Closing costs + Prepaids − Seller credits.
Estimate seller net proceeds
- Start with sale price.
- Subtract commission, often 5% to 6%.
- Subtract owner’s title premium and seller-side fees, often $1,000 to $4,000 as a basic range.
- Subtract your mortgage payoff and any liens.
- Subtract any seller concessions.
- Result is your approximate net proceeds.
What to do next
If you are buying:
- Ask at least one lender for a Loan Estimate early so you can see itemized closing costs and prepaids.
- Confirm your loan program’s maximum allowed seller concession.
- Ask the title company for a title premium quote and a draft closing statement based on your contract price.
- Verify whether the property is in a special district or HOA and request required statements early.
If you are selling:
- Ask your agent for a detailed net sheet that includes commission, owner’s title premium, prorations, mortgage payoff, and any likely credits.
- Confirm what is customary to pay in your market and how credits would affect your net.
- Order payoff statements for any mortgages, HOA dues, and special district obligations as you go to market.
Both parties:
- Review the TREC contract sections that assign fees and concessions, and make sure your agreement is written clearly.
- Confirm recording and county fees with the title company before closing.
When you want a clear estimate and a smart plan, a local advisor can walk you through the numbers and the negotiation options that fit your goals. If you are ready to get started or want a customized net or cash-to-close estimate, reach out to Andrew Bradshaw for a quick, friendly consultation.
FAQs
Who usually pays buyer and seller closing costs in Dallas?
- Buyers commonly pay loan, appraisal, inspections, lender title charges, and prepaids, while sellers typically pay commission, the owner’s title policy, and prorations.
How much are buyer closing costs as a percentage in Dallas?
- A common range is about 2% to 4% of the purchase price, not including your down payment.
Does Texas have a real estate transfer tax at closing?
- No. Texas has no state real estate transfer tax, which removes a common seller cost found in many other states.
Who pays for title insurance in Texas closings?
- By custom the seller pays the owner’s title policy, and the buyer pays the lender’s policy, though this is negotiable and shown in the contract.
How do property tax prorations work at closing in Dallas County?
- Taxes are prorated based on the latest bill or estimate, with the seller paying their share through the closing date and the buyer funding escrow per lender requirements.
Can a seller pay my closing costs in Dallas?
- Yes, through negotiated concessions or credits, but loan program rules limit how much a seller can contribute, so confirm with your lender.
Is a price reduction better than a seller credit?
- It depends on your goals: a credit reduces cash-to-close, while a price reduction affects the loan amount and monthly payment; ask your lender to model both.
