In a typical real estate transaction in state of Texas, there are many charges that are paid at the closings. Most, if not all, of these charges are negotiable. Here is a list of some estimated costs.
|Appraisal||The appraisal is required to determine the fair market value of the home. A property appraisal is generally required by a lender before loan approval to ensure that the mortgage loan amount is not more than the value of the property. Therefore, an appraiser is needed to make this determination.||$300-400||Buyer|
|Courier/FedEx||At times, documents need to be shipped to other places. This can be for the buyer or the seller and it is charged to the benefiting party. Not commonly negotiated in the formal contract for sale, your closing agent will collect these charges at closing.||~$50||Buyer, Seller|
|Document Preparation||Covers the cost of preparing the final legal papers, such as a mortgage, deed of trust, note or deed.||~$125||Buyer|
|Escrow Fee||Fee for title company’s services in receiving and holding funds (earnest money, buyer purchase money funds, loan funds, etc.) and disbursing those funds to the various parties. This requires a separate accounting for each transaction. All funds must be received, and the account must be balanced before any checks are sent cut.||~$200||Buyer, Seller|
|Home Warranty||$Fee for an insurance policy to protect you from cost of unexpected failures in the major systems and appliances of your new home.||~$500||Buyer|
|HOA Resale Certificate||Some neighborhood Home Owner Associations require a transfer fee at the time of home sale.||$500-$700||Negotiable|
|Mortgage Insurance Premium||The lender may require you to pay your first year’s mortgage insurance premium or a lump sum premium that covers the life of the loan, in advance, at the settlement||Varies||Buyer|
|Prepaid interest||This is money you pay at closing in order to get the loan interest paid up through the first of the month.||Varies||Buyer|
|Property taxes||The property taxes for the balance of the year from the closing date. This is collected from buyers and seller pays for the previous months, so the title company can pay the first ear’s property taxes.||Depends on closing date||Buyer|
|Realtor Commission||Generally the seller is represented by an agent. This fee is negotiated by the listing agent and seller when the property was listed for sale. A portion of this fee is offered to the other agent (buyers agent) . There is no law requiring this co-brokerage arrangement and sometimes listing agents are unwilling to share their commission with a selling agent. In this case, unless the buyer expects his agent to work for free, both seller and buyer may pay a brokerage fee. This fee is almost always paid at closing, except on some owner-financed deals.||Depends on the loan amount||Seller|
|Recording Fees||These are the fees that the county charges for recording the new deed and mortgage into the public record. These are sometimes referred to as Deed or Mortgage taxes and is based on the sales price of the property, the number of pages, number of documents, and when recording mortgages, the value of the mortgage. In cash transactions, sometimes it is left up to the buyer to physically carry the deed to the recording authority after the closing. This is a negotiable cost but realize the seller has no interest in whether or not a buyer’s documents get recorded. Thus the buyer usually pays the fees and is calculated for each page of documents to be recorded (e.g. $26 for the first page and $4 for each additional page).||~$15||Buyer|
|Survey||The lender may require a property survey. This is a protection to the buyer as well. Unless there is a very recent survey, it is a advised to get a survey done that corresponds with the physical boundary lines that are evident on the property. Having a current, clear survey is one of the best sales tools a seller can have. This is one that you just work out by negotiation. Care should be taken as to what type of survey you are negotiating. It could be as simple as having the corners marked, and a legal description derived from the information gathered in the field and previous deeds. It could also include fences, roads, and structures located on the plat of the property, boundary lines marked. Sometimes it may be necessary to include a topographical survey as well.||~$400||Buyer / Negotiable|
|Title Policy –Lender||When a lender agrees to issue a mortgage for a piece of property, the lender must receive a guarantee that the property is indeed owned by the seller. Title fees pay the lender for the costs associated with determining the current owner of the property and legally certifying that the title information is correct.
In addition to the formal title search, your lender is likely to require a title insurance policy to protect it against an error in the title search. Errors are rare, but they do occur.
Premiums and the scope of coverage can vary widely. As a rule, look for a policy with the least exclusions from coverage as possible.
The title insurance required by the lender protects only the lender. To protect yourself against unforeseen title problems, you may also want to take out an owner’s title insurance policy. Normally the additional premium cost is only a fraction of the lender’s policy.
|Depends on the loan amount
~$1800 for $250K
|Title Policy –Owner||The owner’s policy protects the homeowner’s investment for as long as they, or their heirs, own the property. This fee charged by the title company to search public records to determine if there are any title issues such as breaks in the chain of title, any unsatisfied mortgages, liens or judgments which have been recorded.
When it comes to houses, providing clear title is not a simple process. Public records affecting real estate title are spread among several local government offices, including recorders of deeds, county courts, tax assessors, and surveyors. Records of deaths, divorces, court judgments, liens, and contests over wills also must be examined.
Examinations also review the history of ownership, including all trusts, will and deeds associated with the property in the past. This is called reviewing the chain of the title, and inspects whether the property’s ownership may be legally tied to anyone other than the current buyer and seller.
|Depends on the sale price of the house
~$1800 for $250K