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Closing cost when buying a house is never paid by just one side of the deal and it is a separate expense from the down payment itself. Total closing costs typically run between 2 and 5 percent of the purchase price for buyers, with sellers usually paying a larger share on their end, mainly because of agent commissions. Knowing who typically pays what going in makes the entire negotiation feel far less confusing, whether the transaction is happening in North Texas or down around Houston.
Who Pays Closing Costs When Buying a House?
The short answer is both sides do, just for different things. Buyers generally cover the costs tied to getting the loan and confirming the property's condition, while sellers cover the costs tied to transferring ownership and paying their agent. Anyone actively touring homes in DFW will run into these costs the moment an offer gets serious and the same goes for buyers looking at homes in Houston.
What Buyers Typically Cover
- Lender fees for processing and underwriting the loan
- Appraisal and home inspection costs
- The lender's title insurance policy
- Prepaid homeowners insurance and property tax escrow
These fees come on top of the down payment and the exact total can shift quite a bit for a buyer in DFW versus one shopping around Houston. The right neighborhood plays a bigger role in that number than most people expect, which is worth checking against where to buy before locking in a budget. Buyers who want the complete picture beyond closing day can see the full breakdown in how much it costs to buy a house.
What Sellers Typically Cover
- Real estate agent commission, now negotiated directly with their own agent
- The owner's title insurance policy, by custom in Texas
- Their prorated share of property taxes through the closing date
- Any remaining balance on their existing mortgage
Sellers weighing these costs against their expected proceeds often benefit from pricing guidance before listing, whether the home is in DFW or Houston. Selling a home in DFW starts with understanding exactly what comes out of the proceeds.
Costs That Are Often Split Between Both Sides
A few fees do not fall neatly on one side or the other. Escrow and settlement fees are commonly divided evenly between buyer and seller and attorney fees, when either party chooses to use one, are typically paid individually rather than shared.
A Title Insurance Custom Common to Both Metros
In most Texas transactions, the buyer pays for the lender's title policy while the seller covers the owner's title policy, a local custom rather than a legal requirement. It has become so standard across the state that sellers who try to shift it back to the buyer often run into pushback during negotiations, no matter which metro the transaction closes in. This convention holds in most transactions, though it can shift in a particularly competitive market where buyers offer to take on more to make their bid stand out, something worth weighing alongside the rest of buying a house in DFW.
Why Buyers Have an Edge in Either Market
Texas does not charge a state transfer tax, which is one less cost sellers have to plan around compared with many other states. On top of that, current conditions in both markets have put more negotiating power in buyers' hands and sellers are increasingly willing to offer concessions, covering part of a buyer's closing costs, to keep a deal moving. Buyers using a VA loan often see this taken even further, since it is a widely accepted strategy in that program for sellers to agree to cover the full amount.
Finding Out These Costs Before Closing Day
Costs do not stay a mystery until signing day. A lender shares an early estimate of these costs soon after a buyer applies for a loan, then confirms the final numbers again shortly before closing. Comparing the two catches any last minute changes before they become a problem at the table.
Some of these costs can also be added into the loan itself rather than paid upfront, though this usually means paying them off over time instead of avoiding them entirely. Whether that makes sense depends on the loan and how long a buyer plans to stay in the home.
So Who Should Pay the Closing Cost When Buying a House?
None of these customs are set in stone. Who should pay closing costs when buying a house ultimately comes down to whatever both sides agree to in writing.
Understanding who pays closing costs when buying a house also means knowing these customs can shift depending on the market and a buyer or seller with the right guidance can often shift a cost that would otherwise fall on their side of the table.
Getting the Right Guidance Before You Sign
Reading through a Loan Estimate or a purchase contract is not always straightforward and knowing which numbers to question makes a real difference before anything is signed. Jeremy Washington reviews the closing statement with clients item by item, catching discrepancies against the original estimate and flagging where there may still be room to negotiate. That same attention applies whether someone is buying or selling in either market.
The JW Standard can walk through exactly how these costs apply to a specific purchase or sale before any contract is signed.
