Closing Costs You Might Not Expect (But Should Plan For)
When most people think about buying or selling a home, they focus on the big numbers — the sales price, the down payment, the mortgage rate. But in almost every transaction, there are closing costs hiding just beneath the surface that can catch you off guard if you’re not prepared.
Whether you’re on the buying or selling side of the table, here are a few of the most commonly overlooked closing costs — and how to plan for them.
- Title Policy & Title Company Fees
For sellers: In Texas, it’s common for the seller to pay for the owner’s title policy (unless negotiated otherwise). This protects the buyer from any issues with the title after closing. This can run anywhere from 0.5% to 1% of the purchase price, depending on the property value. In my experience, I usually see .5% or close to it.
Whoever pays for Title Policy, is negotiable and depends on the market. In a buyers market, usually the seller is paying and in a sellers’ market, usually the buyer is paying. Every neighborhood brings its own market, so you just must see how the market reacts to the home your are buying or selling.
- HOA Transfer, Resale & Capital Contribution Fees
If the property is in an HOA, there can be transfer fees, resale certificate costs, and capital contributions (for some communities, especially newer ones). These costs can range from a few hundred dollars to over $1,000, and are negotiable — but someone has to pay them at closing. Many buyers and sellers don’t realize these fees can be charged upfront at closing. Sellers will usually have a resale certificate to pay for and this along can be $350 – $800.
- Prorated Property Taxes & Insurance
In Texas, property taxes are paid at the end of the year. That means at closing, prorations are made to ensure both sides pay their fair share. Sellers often end up crediting the buyer for taxes covering the part of the year they owned the home. Buyers will prepay some taxes and fund escrow accounts — which can easily add thousands to what’s due at closing. It’s a good idea to get an estimate from your title company or lender early on so this doesn’t feel like a surprise check.
- Repairs, Credits & Home Warranty Costs
Sellers often agree to repair items from the inspection report or offer credits at closing. Some buyers request a home warranty, which is commonly paid by the seller. This can add $500–$1,000 or more to the bottom line. On the buyer side, any agreed-upon repairs or upgrades not rolled into the loan are typically paid out of pocket.
- Loan Origination & Discount Points
Buyers, especially first-time buyers, often overlook loan origination fees, discount points to buy down rates, and underwriting fees. These can range from 0.5% to 2% of the loan amount. It’s important to review your Loan Estimate carefully — these fees are usually on page 2. You can ask for a good faith estimate from your lender, so you understand the costs.
- Recording Fees, Courier Fees & Miscellaneous Charges
These are the small line items that add up: recording fees, notary fees, overnight delivery or courier charges, and wire fees (for sending funds to title). Individually, these seem small — $25 here, $100 there — but together, they can easily total $300–$500 or more.
- Temporary Lease-Backs or Post-Closing Occupancy
If a seller stays in the home after closing, or a buyer moves in early, both sides may agree to daily rent payments, security deposits, and additional insurance requirements. This isn’t technically a fee, but it does affect your net and cash flow, so it’s smart to plan ahead.
Final Thought: Closing Costs Don’t Have to Be a Surprise
The biggest mistake I see is people waiting until they’re at the closing table to learn their final costs. The earlier you understand your net sheet as a seller or Loan Estimate and title fee breakdown as a buyer, the more prepared and less stressed you’ll be.
Rule of thumb in Texas: Buyers should budget an extra 2%–4% of the purchase price for closing costs. Sellers should budget about 6%–8%, including commissions, title policy, and other fees.
If you’re thinking of buying or selling, I can help you run through an actual closing cost estimate specific to your property before you list or make an offer. A little planning goes a long way in keeping the process smooth.
