Who pays closing costs in Texas?
Who pays closing costs in Texas is negotiated in the contract, not fixed by law. Custom in much of Texas is that the seller pays the owner's title policy and the buyer pays lender and loan-related costs, but every line is negotiable. Your lender's Loan Estimate and the title company's fee sheet give the actual numbers.
Start here: nothing in this is law
There is no Texas statute that says the seller pays for X and the buyer pays for Y at a residential closing. What exists is a promulgated contract with a paragraph that lists each side's expenses, plus checkboxes and blanks where the parties decide the rest.
The cleanest proof is the very first line of Paragraph 6A: "Seller shall furnish to Buyer at [ ] Seller's [ ] Buyer's expense an owner policy of title insurance (Title Policy)" (TREC form 20-19, ¶6A). The single largest title-side cost in the transaction is a checkbox. If it were law, there would be no box to check.
Custom is real and it matters — an offer that ignores local custom reads as unserious — but custom is not binding. Anything on the settlement statement can be shifted if both parties agree, and the agreement goes in the contract or on the Amendment to Contract, form 39-11 (TREC contract forms).
What the contract actually assigns: Paragraph 12
Paragraph 12A(1), Seller's Expenses, lists: releases of existing liens, including prepayment penalties and recording fees; release of Seller's loan liability; tax statements or certificates; preparation of deed; one-half of escrow fee; and other expenses payable by Seller under the contract (TREC form 20-19, ¶12A(1)).
It is a short list, and that surprises sellers who assume closing costs are mostly theirs. The seller's real money is elsewhere — the mortgage payoff and the brokerage compensation, neither of which is a ¶12A(1) expense.
¶12A(1) also contains an optional capped dollar contribution from the seller "to be applied to Buyer's Expenses other than brokerage compensation or contributions under Paragraph 12B." That is the seller-paid closing cost concession, and it lives right there in the same subparagraph.
Paragraph 12A(2), Buyer's Expenses, is the long one: "Appraisal fees; loan application fees; origination charges; credit reports; preparation of loan documents; interest on the notes from date of disbursement to one month prior to dates of first monthly payments; recording fees; copies of easements and restrictions; loan title policy with endorsements required by lender; loan-related inspection fees; photos; amortization schedules; one-half of escrow fee; all prepaid items, including required premiums for flood and hazard insurance, reserve deposits for insurance, ad valorem taxes and special governmental assessments; final compliance inspection; courier fee; repair inspection; underwriting fee; wire transfer fee; expenses incident to any loan; Private Mortgage Insurance Premium (PMI), VA Loan Funding Fee, or FHA Mortgage Insurance Premium (MIP) as required by the lender; and other expenses payable by Buyer under this contract."
Three things worth pulling out of that list.
The escrow fee is split by default. One-half appears on each side. It is one of the few genuinely shared line items.
"Flood and hazard insurance" is named explicitly. In the Hill Country that is not boilerplate. A property near Cibolo Creek or in a mapped flood zone can carry a flood premium that materially changes the cash to close, and it is prepaid at closing.
PMI, the VA funding fee and FHA MIP are buyer expenses "as required by the lender." The contract does not decide whether you owe one — the loan program does. Veterans receiving VA compensation for a service-connected disability are among those exempt from the VA funding fee (VA), which is worth confirming with the lender before it lands on a settlement statement.
Paragraph 12C adds a protection: if a governmental loan program prohibits the buyer from paying certain charges, the seller's ¶12A(1) concession is applied first to those prohibited expenses, then to other buyer expenses — but never to brokerage compensation.
Title and escrow, and why shopping on premium is pointless
Texas title insurance premium rates are promulgated by the Texas Department of Insurance, not set by the title company. The premium for a given policy amount is the same at every title company in Texas. Shop title companies on service, escrow fee and responsiveness; there is nothing to shop on premium. The current schedule is "Texas Title Insurance Premium Rates, Rates Effective March 1, 2026" (TDI, rate table PDF).
The owner's policy is the ¶6A checkbox. The loan title policy with lender endorsements is a ¶12A(2) buyer expense. Amending the survey exception is its own election under ¶6A(8), at Buyer's or Seller's expense.
Prorations — Paragraph 13
Quoted in full, because it is short and it governs a line people argue about:
"Taxes for the current year, interest, rents, and regular periodic maintenance fees, assessments, and dues (including prepaid items) will be prorated through the Closing Date. The tax proration may be calculated taking into consideration any change in exemptions that will affect the current year's taxes. If taxes for the current year vary from the amount prorated at closing, the parties shall adjust the prorations when tax statements for the current year are available. If taxes are not paid at or prior to closing, Buyer shall pay taxes for the current year."
Two sentences in there matter more than the rest. The proration may account for a change in exemptions — relevant when a seller had a homestead or over-65 exemption the buyer will not have, or vice versa. And the parties shall adjust when the actual tax statements arrive, which means the number on your settlement statement is an estimate that can be trued up later.
Brokerage compensation — Paragraph 12B
The contract states it directly: "Brokerage compensation is not set by law and is fully negotiable. Each party shall pay their respective brokers pursuant to the terms of the parties' obligations to compensate their brokers contained in separate written agreements" (TREC form 20-19, ¶12B).
Compensation lives in separate written agreements, not in the purchase contract. Paragraph 12B does include optional checkboxes letting the seller pay a dollar amount or percentage toward what the buyer owes the buyer's broker, and vice versa — but those contributions "shall be applied to and shall not change the parties' obligations to pay compensation pursuant to those agreements."
That last clause is the one to understand. A seller contribution toward the buyer's broker is a payment mechanism, not a transfer of the obligation. The buyer still owes their broker whatever their representation agreement says; the contribution just covers part of it at closing.
Why this page does not give you a percentage
Every "closing costs are X percent of the sales price" number you will find online is a marketing estimate, and the components move independently of the price. A cash buyer has no lender costs at all. A VA buyer may have no funding fee — veterans receiving VA compensation for a service-connected disability are among those exempt (VA). Two identical houses in Boerne can produce very different settlement statements depending on the loan, the insurance premium, the tax proration date and whether a new survey was ordered.
There are two documents that give you real numbers, and both are free:
The Loan Estimate from your lender. A standardized federal disclosure that itemizes the loan costs and the other costs, including the estimated cash to close. Request one from every lender you are considering and compare them side by side. If you want an early read before you have a property under contract, ask a lender for a cost worksheet on a target price.
The title company's fee sheet. The title company handling the transaction will produce an estimated settlement statement on request, using the actual sales price, the actual tax rates for the property, and the actual policy amount. That is the closest thing to a real number that exists before closing.
Ask for both. Do not budget off a blog percentage.
The seller contribution, and its limit
A buyer can ask the seller to pay some of the buyer's closing costs. In the contract it is the capped dollar amount in ¶12A(1), applied to buyer's expenses other than brokerage compensation or ¶12B contributions, and it shows on the settlement statement as a seller credit. It is one of the most useful tools available to a buyer who is cash-tight but income-qualified, because the buyer effectively finances the closing costs into the price.
The ceiling is not set by the contract. The lender caps how much seller contribution the loan program allows, and the cap varies by loan type, occupancy and down payment. Exceeding it means the excess is simply disallowed at underwriting. Your lender is the only person who can tell you the number for your specific loan — ask before you write the offer, not after.
Paragraph 12C routes that concession intelligently if a governmental loan program bars the buyer from paying certain charges: the contribution is applied first to the prohibited expenses, then to the buyer's other expenses.
Boerne and Kendall County specifics
Boerne is the county seat of Kendall County. It is not in Bexar County and not in the City of San Antonio, so the tax entities appearing on the proration line are Kendall County entities — Boerne ISD, the City of Boerne for property inside city limits, Kendall County, and potentially a MUD or a groundwater conservation district depending on the property (Kendall Appraisal District).
The tax proration on the settlement statement uses those rates, prorated through the closing date under ¶13. A buyer who compared a Boerne closing to a San Antonio closing and expected the same numbers is comparing different taxing jurisdictions.
The ¶13 exemption language matters here too. If the seller was carrying a homestead or an over-65 exemption that the buyer will not qualify for in the same year, the proration may be calculated taking that change into account — and the parties adjust when the actual statements arrive. Exemption questions for a specific Kendall County property go to Kendall Appraisal District, not to the title company.
What actually determines your number
Loan type. Whether there is a loan at all. The sales price, which drives the title premium. The closing date, which drives the tax proration and prepaid interest. Whether a new survey was ordered. Whether the property has an HOA and what it charges to transfer. Whether the seller agreed to a contribution or a home warranty. Whether repairs were credited.
Change any one of those and the bottom line moves.
Related questions
- What happens at a Texas real estate closing?
- Who pays for the survey in a Texas real estate transaction?
- What is title insurance in Texas?
- Are property taxes prorated at closing in Texas?
- What is the Third Party Financing Addendum?
Questions about a specific property?
Call or text 830-446-3847 · Email heath.shepard@kw.com
This page describes how closing costs are allocated in Texas transactions. It is not legal, tax or lending advice. Your lender's Loan Estimate governs loan costs, your title company produces the settlement statement, and a CPA handles the tax treatment of what you paid.