How Much are Typical Seller Closing Costs in Texas?
And how to save approximately $9,000 in real estate commissions on a typical $300,000 Texas home at closing by selling your home For Sale By Owner on Houzeo?
Congratulations! You’ve made it to the finish line. Closing on a home can be one of the most exciting moments as a seller, but it can also be a stressful one if you aren’t prepared. Texas is an expensive state when it comes to closing costs. Various regulations also make it a tedious state.
As a Houzeo For Sale By Owner (FSBO) seller, we expect you to go to your closing prepared. Our comprehensive Texas FSBO Home Seller Guide will help you accomplish exactly that.
Did you know Houzeo’s Gold Plan includes Federal and State seller disclosures?
In this section, we’ll discuss the key documents and expenses you need to be aware of when closing on a home in Texas.
Here are the seller closing costs in Texas that a seller needs to cover after closing a deal:
- Escrow fees
- Loan payoff
- Home warranty fees
- HOA transfer fees
- Recording fees
- Outstanding special assessments
- Title insurance fees
- Seller credits
The closing process usually takes a lot of everyone’s time. Getting ahead by familiarizing yourself with the seller closing costs in Texas will save you more time, too. Know what the following terms usually gets involved in the closing process of selling a home.
Usually, both the buyer and the seller pay these charges to compensate for the price of the mortgage company or real estate attorney holding and transferring the money while selling a house. The same fee exists for both buyer and seller. A serious deposit of cash is needed when a house offer is approved.
In this process, the cash and the down payment sent to an escrow business. It generally holds the title company in an escrow account until closing.
According to Marketwatch, some lenders pay a penalty for paying off their loan before the end of the mortgage term. If you owe something on the mortgage of the property, this sum will also be paid upon closing. Your loan payoff is the total amount of money that you have to pay to meet your mortgage conditions.
Your payoff amount could vary from your existing loan balance. You will have to pay the interest until you pay back the loan.
Home warranty fees
A home warranty is a homeowners policy used to cover the cost of fixing any household appliances. However, this only applies if they stopped working. Most probably, your house is still one of your largest investments. Unforeseen expenses of repairing or replacing can affect your expenditure readily.
Moreover, it can be strenuous and impractical to discover a skilled professional to fix your issue. A home warranty could not stop the breakdown of devices or equipment. However, it can assist create secured repairs or replacements faster and much less expensive.
HOA transfer fees
Homeowners associations usually pay a small fee if selling the property in their society. These charges sometimes pay for the cost and advancements of neighborhood facilities. You are likely to be charged taxes onto the purchase transaction based on your state and local legislation.
These are computed on the basis of the cost of the property and local regulations. The website of your county and state tax authority will also have your city tax rates data. You could also ask the real estate agent for your property.
These charges are taxes imposed to lease the title to the new homeowner from you by your government entity. For each paper, real closing charges are computed at $26 for the very first page and $4 of each extra page. Your escrow agent, title agent, or real estate attorney will file with the suitable local office the title of transferring the primary residence to that of the buyer. Each county establishes its own registration fee.
Outstanding special assessments
This involves property taxes, utility bills, insurance for property owners and if applicable, HOA dues. These sums taxed as income up to the date of closing. You pay regular fees when living in a society with a Homeowners Association (HOA) to help keep common neighborhood places.
HOA will enforce a property tax increase on property owners occasionally for common property repairs. As the seller, you will be liable for paying them in full at closing. However, only if you need to pay any special assessment fees that are exceptional.
Title insurance fees
Although there is title insurance in many other industrialized countries, it’s much more prevalent in the U.S. than in most. This is mainly due to the reality that local authorities play a lesser role here. Well, compared to anywhere else in the globe in assessing the legality of property transfers as well as ownership.
However, it is open to negotiation. Sellers usually pay the buyer’s title insurance premium. Homeowner’s insurance enables safeguard both the lender and the buyer after closing a title if ever an issue takes place.
Occasionally your home buyer will ask you at closing to credit a specific amount to help cover their closing costs. Aside from that, the buyer and seller will start negotiating the loan amount and conditions. This includes the sale contract.
Seller credits could favor the transaction from both sides. By providing a seller credit, sellers can attract customers and buyers can decrease their own costs at closing. Cash-strapped customers can apply for a seller credit and raise its selling price to attract a seller to accept. As such, a seller credit enables the buyer to fund the new loan quantity for its closing costs.
Preparing for A Real Estate Closing
Completing the seller closing costs in Texas by signing the final papers and disseminating the sale funds, the seller formally hands over ownership of the house. Your escrow agent would simplify the process. Not only will your escrow agent assist you with acquiring title insurance, but he will also prepare records for closing, too. All this in addition to interacting with third parties such as your HOA.
However, there are final pre-closing responsibilities you need to do:
Several days until closing, you will also want to consult any entity which closes the transaction and ensure all of the required forms and records have also been prepared and will be accessible to register on the suitable date. It will be a shame and get this close to selling and drop the agreement. Since there may be a time that a document isn’t in the right place. If you’ve not done so, you must also start making provisions before your next step.
- Maintain your finances in order.
- Return all phone calls and documentation as quickly as possible.
- Make sure to stay in touch with your real estate agent even at least on a weekly basis.
- Verify that all of your paperwork is in place and in great proper order.
- Obtain all the certified closing funds you need.
- The final walk-through should take place.
As the closing day arrives, you will be signing papers. These papers do the corresponding things with the advice of a settlement officer and your agent. The closing procedure alone can comprise a few days or even a week. The transaction is usually not finalized with all parties seated at the same table, unlike attorney review statements.
What happens during the closing process?
Closing a property deal could be a long and exhausting procedure involving many measures and procedural formalities. Closing happens when the documents that make the building yours are signed. But a protracted list of things must take place before that fateful day comes.
What Your Realtor, Escrow, and Closing Agent Bring to Closing:
- Your mortgage and loan payoff information
- Escrow account information
- HUD 1 Settlement Agreement
- Inspection Agreements
- Termite inspections and property tax information
What You Bring to Closing:
- Photo identification of all sellers on the home contract
- Any questions you have regarding your closing statement
- The deed of your home if you own it outright
- Main keys and security codes for your home
- Documentation of repairs you’ve made per the home inspection
Everyone obviously needs a clear concept of the charges they are going to pay at the end of a home sale. Hopefully, this probably explains the closing costs and provides you the data you really have to confidently sell your property.
Note: This is only a quick guide for all the sellers in Texas. Despite most information readily available online, seeking expert advice helps progress the process of selling a home.
Did you know Houzeo’s Gold Plan includes Federal and State seller disclosures?
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