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Who Pays Which Closing Cost in Texas

QUICK SUMMARY

In Texas, who pays a given closing cost is mostly a contract term, not a statewide assignment. The owner's title policy, the survey, the escrow fee, and the lender costs are negotiated or filled in on the TREC contract. Local habit exists and it is not a statute. The promissory note's costs are the borrower's unless the seller agrees to pay them. A blank left empty becomes a fight. Fill it in.

In Texas, who pays which closing cost is set by your purchase contract, not by state law or a "Fort Worth custom." The standard TREC resale contract puts loan-related costs on the buyer and lien payoffs and deed preparation on the seller, splits the escrow fee in half, and leaves blanks for the big negotiable items: who pays the owner's title policy, who pays for a new survey, and how much the seller will contribute toward your costs. Your loan program then limits how much the seller can pay for you and which fees you're allowed to pay.

The default split in the TREC contract

Most Texas resale purchases use the One to Four Family Residential Contract (Resale), TREC form 20-19, effective July 1, 2026. Paragraph 12 lists who pays what.

Seller's expenses (Paragraph 12A(1))

  • Releases of existing liens, including prepayment penalties and recording fees.
  • Release of the seller's loan liability.
  • Tax statements or certificates.
  • Preparation of the deed.
  • One-half of the escrow fee.
  • Any other expenses the seller agrees to pay in the contract.
  • A dollar amount, if filled in, that the seller will apply to your expenses.

Buyer's expenses (Paragraph 12A(2))

  • Appraisal, loan application, origination, credit report and underwriting fees.
  • Preparation of loan documents, wire and courier fees.
  • Interest from the funding date to one month before your first payment (prepaid interest).
  • Recording fees and copies of easements and restrictions.
  • The loan title policy (the lender's policy) with the endorsements your lender requires.
  • Loan-related inspections, final compliance inspection and repair inspection.
  • One-half of the escrow fee.
  • All prepaid items: flood and hazard insurance premiums and the initial escrow deposits for insurance, property taxes and special assessments.
  • Mortgage insurance, the VA funding fee or FHA's mortgage insurance premium, as your loan requires.

What's left blank for you to negotiate

  • Owner's title policy (Paragraph 6A). The contract has a box for "Seller's" or "Buyer's" expense. Both are valid. Whatever gets checked is the deal. See how title insurance works in Texas.
  • Survey (Paragraph 6C). The seller can provide an existing survey with a T-47 affidavit or T-47.1 declaration. If the title company or your lender won't accept it, the contract says who pays for a new one. Or the buyer can order a new survey at the buyer's expense, or the seller can furnish a new one at the seller's expense. See survey and T-47.
  • Seller contribution (Paragraph 12A(1)(b)). A dollar cap on what the seller will put toward your expenses, other than brokerage compensation.
  • Brokerage compensation (Paragraph 12B). The 20-19 form says brokerage compensation isn't set by law and is fully negotiable. Each party pays their own broker under separate written agreements, and the contract can show a seller contribution toward the buyer's broker or a buyer contribution toward the seller's broker.

I won't tell you one split is "normal for Fort Worth." A false normal gets written into offers as if it were law. The blank in your contract is the decision, and your agent negotiates it.

Prorations are a split, not a fee

Property taxes, HOA dues and similar items are prorated through the closing date (Paragraph 13). In Texas, current-year property taxes usually aren't paid until the bill comes due around the end of the year, so the seller typically credits you for their share of the current year at closing, and you pay the full bill later. See how tax proration works.

Your loan program limits what the seller can pay

A seller can agree to pay your costs, but each loan program caps how much and what it can be used for.

  • FHA. Sellers and other interested parties can contribute up to 6% of the sales price toward your origination fees, other closing costs, prepaid items and discount points. Contributions can't be used for your minimum required investment (HUD 4000.1 II.A.4.d.iii(G)).
  • Conventional (Fannie Mae). Financing concessions are capped by occupancy and loan-to-value: on a principal residence or second home, 3% above 90% LTV, 6% from 75.01% to 90%, and 9% at 75% or less; 2% on investment property. The cap is figured on the lower of the sales price or appraised value. Concessions can't pay your down payment or reserves, and they can't exceed your actual closing costs (Fannie Mae Selling Guide B3-4.1-02, dated May 7, 2025). Fannie Mae also says typical seller-paid costs under local custom don't count against the cap.
  • VA. VA limits which fees the veteran may pay. The veteran can pay reasonable and customary amounts for items like the appraisal, recording, credit report, title, survey, hazard insurance and the tax and insurance escrow deposit, and the lender's flat charge can't exceed 1% of the loan amount in place of other origination costs (38 CFR 36.4313(d)). Fees the veteran can't pay have to be paid by someone else, often the seller. VA also has its own limit on seller concessions; I check the current VA handbook on each file.
  • USDA and assistance programs have their own rules, so I confirm them for the program you're using.

The TREC contract builds this in. If a government loan program prohibits you from paying a fee, the seller's contribution goes first to those prohibited expenses, then to your other expenses (Paragraph 12C). More detail in how seller concessions work.

Seller credit, lender credit, and who really pays

A seller credit and a lender credit can both lower your cash to close, but they aren't interchangeable. A seller credit counts against the program's concession cap. A lender credit usually comes from choosing a different pricing option on your loan. Both show up on your Closing Disclosure, in different places. Ask to see the trade-off in writing before you choose.

Texas specifics worth knowing

  • Texas has no state real estate transfer tax. That's one cost buyers from other states expect and won't see here. See no Texas transfer tax.
  • Title insurance premiums are set by the state. The Texas Department of Insurance sets the basic premium rates, so the basic premium for the same policy amount shouldn't vary between title companies. Escrow and other title company fees can differ.
  • Recording fees exist. They're paid to the county clerk and split by the contract's default terms.
  • New construction is different. Builders use their own contracts, not TREC's resale form, so read who pays what in the builder's contract.

Fictional example

This example is made up to show how the pieces fit.

Priya is relocating from out of state and buying an existing home in Fort Worth with an FHA loan. Back home, the seller always paid the owner's title policy, so she assumes that's the rule. Her contract has a blank. Her agent negotiates: the seller pays the owner's title policy and contributes a dollar amount toward Priya's other costs. I confirm the total seller help fits inside FHA's interested party limit of 6% of the price and isn't more than her actual closing costs and prepaids. The escrow fee is split in half by default, the seller pays to release their existing lien, and Priya pays her loan-related fees and prepaid items, less the seller's contribution.

Common misunderstandings

  • "Texas law says the seller pays for title." No. The contract decides.
  • "The seller can pay my down payment." Not on FHA or Fannie Mae. Seller money goes to costs, not your down payment.
  • "More seller credit is always better." Anything over the program cap, or over your actual costs, doesn't help and can force a price adjustment.
  • "Commissions are a lender fee." They aren't. They're set by brokerage agreements and shown on the settlement statement.

Next step

Writing an offer and not sure how much seller help to ask for? Send me the price and loan type, and I'll show you your estimated closing costs and the most a seller can contribute under your program. Book a call, or start an application.

Related questions

Sources

Links checked Oct 21, 2026.

About the author: McKade Lively, NMLS 2704474, American Pacific Mortgage Corporation dba True North Home Loans, NMLS 1850.

Equal Housing Opportunity.

Last reviewed: Oct 2026

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