Seller Closing Costs and Net Proceeds in Texas

Who pays title fees when selling in Texas?

By custom in Texas, including Dallas County, the seller pays for the owner's title policy and the buyer pays for the lender's policy. The TREC contract has a line where the parties choose, so it can be negotiated.

Texas title insurance premiums are set by the Texas Department of Insurance, so the premium for the same policy and price is the same at every title company. Escrow and closing fees, document preparation and recording are separate, and the contract says how they are split.

The owner's policy protects the buyer against title problems from before the sale, such as an old lien or a missing signature in the chain of ownership. Buying it is part of delivering clear title, which is why the custom puts it on the seller. Tell your agent early about anything that could cloud title, such as a divorce, a death on title, an old lien or work that was never paid for.

Can I sell my house without paying closing costs?

Not entirely, but most seller costs are negotiable and many are paid from the proceeds, so you rarely bring cash to closing. Texas has no state real estate transfer tax.

Typical seller costs in Texas

• Real estate agent compensation, as agreed in your listing agreement. Commissions are negotiable, and there is no standard rate
• The owner's title policy, by custom
• Your share of escrow and closing fees and any document preparation
• Property taxes for the part of the year you owned the home, credited to the buyer because the whole year's tax bill is paid at the end of the year
• Mortgage payoff, including interest to the payoff date, and any other liens
• HOA resale certificate and transfer fees, as the contract provides
• Any concessions, repair credits or a new survey you agreed to provide

How much money will I actually get after selling?

Your net proceeds equal the sale price minus your loan payoff, your closing costs, any concessions or repair credits, and the property tax proration. The only way to know your real figure is to run it with your numbers.

1. Ask your lender for a payoff estimate, or check your latest statement for the principal balance.
2. Look up your tax bill on the Dallas County tax office site or your appraisal on DCAD to estimate the proration.
3. List the costs you have agreed to: agent compensation, title policy, fees, HOA charges.
4. Subtract any concessions or credits in the offer.

I prepare a net sheet with you at the pricing review and again for each offer, and the title company issues the final settlement statement before closing. Questions about taxes on your gain belong with your CPA.

Can I sell my house if there's still a mortgage?

Yes. The title company requests a payoff statement from your lender and pays the loan from the sale at closing, along with any home equity line or other lien. Tell your agent early about a second loan, a HELOC or a lien so the title company can clear it.

If you owe more than the home will sell for, you can bring the difference to closing or ask your lender to approve a short sale, which takes longer and needs advice from your lender and possibly an attorney.

When do I get my money after closing?

Usually the same day the sale funds. In Texas, closings typically fund on the day of signing, once the buyer's lender wires the loan to the title company. The title company then pays off your mortgage and costs and sends your proceeds by wire or check.

Can I stay in my house after closing?

Yes, if the buyer agrees. The TREC contract gives the buyer possession at closing and funding unless the parties sign a temporary lease. For a seller staying on, TREC publishes the Seller's Temporary Residential Lease, for occupancy of up to 90 days after closing.

The lease sets the rent, a deposit, the move-out date, insurance and utilities. Keep your own insurance on your belongings, because the buyer insures the house after closing. The buyer's lender may limit how long a seller can stay, so raise it in the offer, not at the last minute. Needing more time can also mean simply asking for a later closing date. If your next home is a purchase, see selling and buying at the same time.

What paperwork do I need to sell my house in Texas?

You need proof of identity, the documents that describe the property, and signatures from everyone on title. Your agent and the title company tell you exactly what your sale needs.

• Seller's Disclosure Notice, required for most one-to-four unit homes under Texas Property Code section 5.008
• Lead-based paint disclosure for homes built before 1978
• Your existing survey and, if nothing has changed, a T-47 affidavit
• HOA details for the resale certificate, if the home is in an association
• Mortgage lender and account information for the payoff
• Warranties, service records, permits for past work, and keys, codes and remotes
• For an estate, trust or divorce: the court or trust documents that give you authority to sell

If the home is your homestead and you are married, your spouse usually must sign even if only one name is on the deed. A real estate attorney or the title company can confirm what your situation requires.

Gather these before you list, not after a buyer signs. A missing survey, an unknown HOA contact or an estate document that is not yet in hand is one of the most common reasons a closing date slips.