Jul 14, 2018

Real Estate Closing Costs in Texas

Closing costs are a big expense when selling a property in Dallas. Who pays them are sometimes mandated, sometimes standard practice and sometimes can be negotiated. Any way you look at it, the cost of selling a property in Texas is high.

In Dallas, it is common for the seller to incur the following expenses (and their approximate costs per my experiences):
  • Mortgage payoff - dictated by your lender
  • Selling broker's commission - typically 3%
  • Buyer broker's commission - typically 3%
  • Title insurance policy - roughly 1 to 1/2 percent of the sales price
  • Prorated taxes - seller's share of current year taxes
  • Survey $0-$900
  • Release of lien - $20 to $50
  • Courier fee - $10 to $50
  • Document Preparation fee $100 - $450
  • Recording fees $40 - $195
  • Escrow fee $0 - $500
  • Home warranty $0 - $1,100
  • Homeowners Association transfer fee - $50 - $900
  • Homeowners Association resale certificate - $100- $600
  • Flood certificate $0 - $50
  • Tax certificate $150-$500
  • Deed $20 - $145
Please keep in mind that these expenses vary depending on the sales price, size of the property, county it is located, type of property (condo, single family, acreage, ...) and other factors. Many title company fees are regulated by the state, so your closing costs are not going to vary much based on which company you use.
Title insurance rates in Texas are determined by Texas Dept. of Insurance and all title insurance companies must charge the same.

So what is title insurance and do you need it? Title insurance protects you from other claims of ownership, outstanding debts of previous owners, and other title potential problems. It does not insure against fire, flood, or any other types of property damage or loss.

Before selling a title insurance policy, the title company will check for problems with your title by researching public records, including deeds, mortgages, wills, divorce decrees, court judgments, tax records, liens, encumbrances, and maps. If there is a claim against your property after purchase, the company will then defend you in court and will pay you for covered losses up to the amount of your policy.

The following Title Insurance Premium Rates are based on the sales price of the property. Premiums for policies $100,000 and over in Dallas County are:

$100,000 is $843 and up to $875
$500,000 is $2,979 and up to $3,091
$1,000,000 is $5,649 and up to $5,861
$2,000,000 is $10,039 and up to $10,421

In Texas the title insurance policy is usually paid for by the seller, but it is negotiable. Banks and mortgage companies will require title insurance in order to loan on a property.

If you are not experienced with selling a home, it is unlikely you would know what closing costs can be negotiated with the buyers. A knowledgeable and experienced Realtor can not only guide you through the paperwork and navigate the legal issues, but assist you with writing a contract to help save you money at the closing table. If you need help determining if you can afford to sell, call me to help make this part of the process easier.

The opinions expressed are of the individual author for informational purposes only and not for the purpose of providing legal advice. Contact an attorney to obtain advice for any particular issue or problem.

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