The Truth About Closing Costs
Most first-time buyers don't realize closing costs can add 2-5% of your purchase price on top of your down payment. That's $8,000-$18,000+ for a typical DFW home. If you're not prepared, it can derail your entire closing.
The good news? Many closing costs are negotiable, and some can even be paid by the seller. But only if you know what to ask for.
Closing Cost Estimator
Enter your numbers to get a personalized estimate for DFW
Estimates based on typical DFW ranges. Actual costs may vary based on lender, title company, and specific transaction details.
Cash to Close vs. Closing Costs
These terms get confused constantly—even by some real estate professionals. Here's the simple breakdown:
Closing Costs
The fees you pay to complete the transaction: lender fees, title insurance, appraisal, etc.
DFW Typical Range: 2-5% of purchase price
Cash to Close
The total amount you need to bring to closing:
- Down Payment
- + Closing Costs
- − Earnest Money (already paid)
- − Seller Credits (if any)
Understanding Every Fee Category
Click each category to see detailed breakdowns and typical DFW ranges
Third-Party Fees
▼Title & Escrow Fees
▼Prepaid Items
▼Prepaids aren't fees—they're advance payments for ongoing costs you'd pay anyway. They fund your escrow account.
Who Pays What in Texas?
Texas has some unique conventions about who typically pays which costs
| Cost Item | Who Typically Pays | Notes |
|---|---|---|
| Owner's Title Insurance | Seller (TX Custom) | Can be negotiated in offer |
| Lender's Title Insurance | Buyer | Required by lender |
| Survey | Negotiable | Often seller or split |
| Appraisal | Buyer | Paid upfront or at closing |
| Home Warranty | Seller (Usually) | Common seller concession |
| All Lender Fees | Buyer | Your mortgage costs |
| Recording Fees | Buyer | Your deed being recorded |
| Property Taxes (prorated) | Split | Adjusted to closing date |
Smart Negotiation Strategies
Many closing costs are negotiable. Here's how to save money:
1. Ask for Seller Credits
Request 2-3% seller contribution toward closing costs in your offer. Most effective in buyer's markets.
2. Shop Your Lender
Compare Loan Estimates from 3+ lenders. Origination fees and rates vary significantly.
3. Choose Your Title Company
You can often choose the title company. Get quotes from 2-3 companies.
4. Close End of Month
Closing on the 28th vs the 5th can save hundreds in prepaid interest.
5. Bundle Insurance
Get homeowner's insurance from the same company as your auto policy for discounts.
6. Ask About Lender Credits
Accept a slightly higher rate in exchange for lender credits toward closing costs.
CRITICAL: Wire Fraud Prevention
Wire fraud targeting homebuyers has increased 1,100% since 2015. Criminals hack email accounts and send fake wiring instructions. If you wire money to the wrong account, it's usually gone forever.
5 Rules to Protect Yourself
- NEVER wire money based solely on emailed instructions
- ALWAYS call your title company using a number you looked up yourself (not from the email)
- VERIFY wiring instructions verbally before sending ANY money
- BE SUSPICIOUS of any last-minute changes to wiring instructions
- CONFIRM the wire was received by calling the title company directly
If something feels wrong, STOP. It's better to delay closing by a day than to lose your entire down payment to fraud.
Reading Your Closing Disclosure
You'll receive this document 3 business days before closing. Here's what to look for on each page:
Page 1: Loan Terms & Projected Payments
- Loan Amount: Should match your approved amount
- Interest Rate: Verify this matches your rate lock
- Monthly Principal & Interest: Your base payment (before taxes/insurance)
- Estimated Total Monthly Payment: Including escrow for taxes and insurance
Page 2: Closing Costs Details
- Section A - Origination Charges: Lender's fees (compare to Loan Estimate)
- Section B - Services You Cannot Shop For: Lender-required services
- Section C - Services You Can Shop For: Title, survey, etc.
- Section D-I - Additional Costs: Government fees, prepaids, escrow setup
Page 3: Cash to Close Summary
- Total Closing Costs: Sum of all fees
- Closing Costs Paid Before Closing: What you've already paid (appraisal, etc.)
- Cash to Close: The exact amount you need to bring
Some fees can change, but many are locked. If you see significant increases in "cannot increase" fees, contact your lender immediately. You have the right to delay closing if the Closing Disclosure has errors.