What Dallas Home Buyers Actually Pay at Closing: Your Texas Closing Cost Breakdown
Dallas home buyers pay 2–5% of the purchase price in closing costs — on top of the down payment. Here's a complete breakdown of every line item you'll see at the Texas closing table.
What do Dallas home buyers actually pay in closing costs?
Dallas home buyers typically pay 2–5% of the purchase price in closing costs — separate from their down payment. On a $400,000 home, that's $8,000 to $20,000 due at the closing table. These costs cover lender fees, title insurance, prepaid homeowners insurance, and an escrow account for future property taxes. Texas has no state real estate transfer tax, which saves buyers compared to many other states, but there are still enough line items to surprise first-time buyers who only budgeted for the down payment.
By Paul Blair | June 11, 2026
Most Dallas buyers walk into their first consultation thinking about two numbers: the purchase price and the down payment. They're not wrong to focus there — but closing costs are a third number that can run into five figures, and a lot of buyers don't find out until they're three weeks into a transaction.
Here's what you'll actually see at the Texas closing table, line by line.
The Lender's Side of Your Closing Costs
About half of what you pay at closing goes to your lender. These fees cover the cost of processing and underwriting your loan.
Origination, processing, and underwriting fees: Lenders charge a combined fee for handling your loan that typically runs 0.25%–1% of the loan amount. On a $360,000 loan (10% down on a $400K home), that's $900–$3,600. The exact amount depends on your lender and loan type. This is one of the most negotiable items — ask your lender to break it down and compare it when you shop.
Appraisal: Your lender will order an independent appraisal before they'll fund the loan. In the Dallas area, appraisals currently run $450–$800 depending on property size and location.
Credit report: About $25–$60.
Prepaid interest: You'll pay interest from your closing date through the end of that month. Closing later in the month reduces this charge; closing earlier increases it.
There's also a stack of smaller lender fees — flood certification, tax monitoring, wire fees — that vary by lender but typically add $200–$500 combined.
The Title Company's Side
The other half of your costs involves title insurance and the closing itself. This is where Texas has some meaningful differences from other states.
Lender's title insurance: Required on any financed transaction. The lender's policy protects the bank — not you — against title defects. In Texas, title insurance premiums are set by the state (regulated by the Texas Department of Insurance), so you won't see dramatic price variation between title companies. A lender's policy on a $400,000 home runs roughly $100–$300 when issued simultaneously with the owner's policy.
Owner's title insurance: This is the policy that actually protects you. Here's the Texas custom that surprises a lot of out-of-state buyers — in Texas, sellers customarily pay for the owner's title insurance policy. That's the opposite of many other states. It's not a legal requirement, but it's the market standard, and most TREC contracts are written with this expectation. On a $400,000 purchase, the owner's policy runs approximately $2,200. Because the seller is paying it, it's not typically on your closing cost estimate — but it's worth understanding. For a deeper look at how both policies work, here's a full breakdown of title insurance in Texas for Dallas buyers and sellers.
Survey or T-47 affidavit: Texas lenders and title companies require evidence of the property boundaries. If the seller has a current survey, they can sign a T-47 affidavit to certify nothing has changed — saving you $400–$700 on a new survey. Your agent can request this during contract negotiations. The T-47 option typically comes up as part of the closing timeline after accepting an offer in Texas.
Recording fees: Dallas County and Collin County charge fees to record the deed and deed of trust in the public record. Plan for $100–$250 depending on the documents.
Prepaids and Escrow: The Part That Catches Buyers Off Guard
This is where the sticker shock happens for first-time buyers. The prepaids and escrow account setup are real cash out of your pocket at closing, even though some of it is money you'll benefit from immediately.
Homeowners insurance: You'll pay the first full year's premium at closing. Texas insurance costs run above the national average — plan for $2,200–$4,500 per year depending on your home's value, location, and coverage. Your lender will want proof of coverage before closing.
Escrow account setup: Your lender will establish an escrow account and collect reserves to make sure future payments for property taxes and insurance are covered. Expect to put 2–3 months of property tax and 2 months of insurance premiums into escrow at closing. In DFW suburbs where effective tax rates run 2.1%–2.6%, this can add $3,000–$5,000 to your upfront costs on a $450,000 home.
If you're buying in a MUD or PID district — common in new construction communities across Celina, Anna, and Melissa — that special district tax gets added to the escrow calculation too.
Two Items That Affect Your Cash-to-Close (But Aren't Closing Costs)
Option fee: When you go under contract on a Texas home, you'll pay an option fee directly to the seller — typically $250–$1,000, nonrefundable if you don't terminate — in exchange for the unrestricted right to walk away during the option period. This is separate from closing costs, but it's due within 3 days of executing the contract. The Texas option period is one of the most powerful buyer protections in the state, and the option fee is a small price for what it gives you.
Earnest money: Earnest money is 1%–3% of the purchase price — on a $400,000 home, that's $4,000–$12,000 — paid into escrow at the title company. Unlike the option fee, earnest money is credited toward your closing costs or down payment at closing, so it's not an additional out-of-pocket expense overall. It does affect your cash-to-close timeline, though. For a full breakdown of how earnest money works in Texas, see this guide for Dallas buyers.
What Texas Doesn't Have
Here's a real advantage: Texas has no state real estate transfer tax. Most states charge a transfer tax when property changes hands — in California it can exceed 1%, in New York it can exceed 2%. In Texas, buyers and sellers don't pay this at all. On a $400,000 purchase, that's a savings of $4,000–$8,000+ compared to what the same transaction would cost in states with steep transfer taxes.
New Construction: A Different Calculation
If you're buying from a builder in Frisco, Prosper, Celina, or anywhere across the northern and eastern suburbs, the closing cost picture can look quite different.
Builders frequently offer closing cost assistance of 2%–4% — but typically only if you use their preferred lender. In the 2026 DFW market, where builders are competing for buyers, this can be a genuine offset of $8,000–$16,000 on a $400,000 home. It's real money.
The catch: the preferred lender's interest rate may be higher than what you could get on the open market. Run both scenarios with your agent before deciding whether the closing cost credit is worth it. And if you're buying new construction, understand what representation looks like in that process — a buyer's agent in new construction negotiates on your behalf in ways the builder's agent cannot.
How to Know Your Actual Number
The best way to know exactly what you'll pay at closing is to get pre-approved and ask your lender for a Loan Estimate — the standardized three-page document lenders are required to provide within three business days of receiving your application. It lists every estimated cost in a consistent format.
When you're within three business days of closing, you'll receive the Closing Disclosure, which shows the final, locked numbers. Review it carefully against your Loan Estimate. Lenders are required to honor the terms of the original Estimate on most fees.
Every situation is different — your rate, your loan type, the property's location, the title company, the time of month you close — all of it affects the final number. The only way to know your specific cash-to-close is to get your Loan Estimate in hand and walk through it with someone who knows this market.
Frequently Asked Questions
Do buyers or sellers pay closing costs in Texas?
Both sides pay closing costs, but different ones. Sellers typically pay agent commissions, prorated property taxes, and the owner's title insurance policy (a Texas custom). Buyers pay lender fees, the lender's title insurance, homeowners insurance, escrow setup, and prepaid interest. In a buyer's market like DFW in 2026, sellers may also offer to contribute toward the buyer's closing costs as part of the deal.
Can I negotiate closing cost assistance from the seller in Texas?
Yes. In 2026's DFW buyer's market, seller concessions are common — the median seller concession in the metro is around $6,000. You can ask the seller to contribute a dollar amount or a percentage of the purchase price toward your costs as part of your offer. Your lender will have a cap on how much seller-paid closing costs they'll allow, typically 2%–9% depending on loan type and down payment size.
What is the Loan Estimate and when do I receive it?
The Loan Estimate is a standardized three-page document your lender must provide within three business days of your loan application. It shows all projected closing costs broken into categories — origination, services, prepaids, and escrow — along with your estimated monthly payment. It's the clearest early picture of what you'll owe, and a good lender will walk you through it line by line.
Do I pay for both title insurance policies in Texas?
No. As a buyer, you're responsible for the lender's title insurance policy, which protects your lender. The owner's title insurance policy — which protects you — is customarily paid by the seller in Texas. This is different from most other states, where buyers typically pay for the owner's policy. Texas's title insurance premiums are set by the state, so you won't see meaningful price differences between title companies on that line item.
How much do I need for closing costs on a $400,000 home in Dallas?
Plan for $8,000–$20,000 in closing costs on a $400,000 purchase, depending on your loan terms, the time of month you close, and escrow reserve amounts. Add your down payment on top of that, along with earnest money (credited at closing) and the option fee (not credited). Your Loan Estimate will show your specific numbers once you apply with a lender.
Ready to Know Your Actual Number?
Closing costs are one of those areas where the range is wide enough that estimates don't tell you much. Your specific cash-to-close depends on your loan, your property, the title company, and exactly when you close.
If you're getting ready to buy in Dallas, Richardson, Plano, Frisco, or anywhere across DFW, I'm happy to walk through your specific situation and connect you with the right lender for your goals. Reach out at greysq.com/contact — let's start there.
About Paul Blair
Paul Blair is the founder and broker of Grey Square, a virtual real estate brokerage representing buyers and sellers across Dallas and Los Angeles. With 22 years in the business and more than $200 million in closed transactions, Paul works the full range of the market, from luxury homes in the Park Cities and Preston Hollow to estates in the Hollywood Hills and across the Westside. Connect with Paul and the Grey Square team at greysq.com. TX TREC #9011505 · CA DRE #01792671.