Staring at a down payment number and wondering what else you will owe to get the keys? You are not alone. In Dallas, closing costs can feel murky, especially if you are targeting East Dallas neighborhoods like the M‑Streets. This guide breaks down what closing costs cover, who typically pays what in Texas, how much to budget at common price points, and how to prep for a smart lender conversation. Let’s dive in.
Closing costs, defined for Dallas
Closing costs are the one-time fees, prepayments, and deposits you pay to complete a purchase and fund a mortgage. They are separate from your down payment. Typical buyer closing costs run about 2% to 5% of the purchase price, depending on your loan program, escrow deposits, inspections, and negotiations.
Texas customs matter. The Texas contract often includes an option period where you pay an option fee for the right to terminate and complete inspections. It is also common in Texas for the seller to pay the owner’s title policy, while the buyer pays the lender’s title policy when a mortgage is used. Customs are negotiable in the contract.
Who pays what in Texas
- Owner’s title policy: commonly the seller pays in Texas, but it can be negotiated.
- Lender’s title policy: usually the buyer pays when financing.
- Lender fees and appraisal: usually buyer-paid.
- Inspections and surveys: usually buyer-paid unless otherwise negotiated.
- Recording fees: Dallas County charges recording fees; these are typically modest and depend on document type and page count.
- Transfer tax: Texas has no state real estate transfer tax.
You will receive a Loan Estimate within three business days of applying for a mortgage and a Closing Disclosure at least three business days before closing. These are the authoritative line items for what you will owe.
When each cost is due
- Up front at contract: you typically deposit earnest money (often 1% to 3% of price) and pay the option fee for the option period. Earnest money is credited to you at closing. The option fee is usually nonrefundable, though it can be credited if negotiated.
- During the loan process: your lender may collect the appraisal fee and credit report fee after application.
- At closing: you pay lender charges, title and settlement fees, Dallas County recording fees, prepaid insurance and taxes, and initial escrow deposits.
Line-item checklist for Dallas buyers
Below are common buyer charges in Dallas. Many are negotiable and vary by lender, title company, and property.
Lender fees
- Origination, processing, and underwriting: often 0.25% to 1% of the loan amount or a flat fee.
- Appraisal: typically $450 to $800, higher for complex properties.
- Credit report: usually $25 to $60.
- Rate lock or commitment fees: lender-specific.
- Program-specific charges: mortgage insurance, FHA upfront MIP, or VA funding fee as applicable.
Title, settlement, and recording
- Lender’s title insurance policy: buyer-paid; varies with loan size.
- Owner’s title policy: commonly seller-paid in Texas; negotiable.
- Title and closing agent fees: about $300 to $1,200 depending on complexity.
- Dallas County recording: buyer typically pays to record the deed of trust and related documents; exact amounts depend on document type and pages.
Prepaids and escrow deposits
- Homeowners insurance: often one year’s premium due at closing, plus a small escrow cushion.
- Property taxes: prorated between buyer and seller; you also fund an initial tax escrow deposit, commonly a couple of months depending on lender requirements.
- Escrow account setup: deposits for future taxes and insurance as required by your lender.
Inspections, surveys, and HOA items
- General home inspection: about $300 to $700, more for large or older homes.
- Wood Destroying Insect (termite) inspection: about $50 to $150.
- Survey or survey update: $300 to $1,000+ depending on lot and scope; sometimes the seller provides a prior survey.
- HOA transfer or estoppel fees: often $100 to $400; negotiable and varies by association.
Miscellaneous
- Courier, wire, and flood certification fees: typically $25 to $100 each.
- Payoff or release-related recording fees: apply when clearing liens; responsibility depends on the contract.
How costs scale by price
Actual costs depend on your lender quotes, title company fees, insurance, taxes, and negotiations. These examples reflect common Dallas structures where the seller pays the owner’s title policy and you finance 80% on a conventional loan.
Example: $350,000 purchase
- Typical buyer closing costs: about 2.0% to 4.0% or $7,000 to $14,000
- Earnest money: $3,500 to $7,000, credited at closing
- Option fee: $100 to $500
- Lender fees and appraisal: $2,000 to $4,500
- Title and closing agent fees: $800 to $2,000
- Inspections and survey: $400 to $1,500
- Prepaids and escrow deposits: $1,500 to $3,500
- Recording and other: $100 to $400
Example: $600,000 purchase
- Typical buyer closing costs: about 2.0% to 4.5% or $12,000 to $27,000
- Earnest money: $6,000 to $12,000, credited at closing
- Option fee: $100 to $500
- Lender fees and appraisal: $3,500 to $6,000
- Title and closing agent fees: $1,000 to $3,000
- Inspections and survey: $500 to $2,000
- Prepaids and escrow deposits: $3,000 to $7,000
- Recording and other: $150 to $600
Example: $1,000,000 purchase
- Typical buyer closing costs: about 2.0% to 5.0% or $20,000 to $50,000+
- Earnest money: $10,000 to $30,000, credited at closing
- Option fee: $200 to $1,000
- Lender fees and appraisal: $5,000 to $12,000
- Title and closing agent fees: $1,500 to $4,000+
- Inspections and survey: $700 to $3,000+
- Prepaids and escrow deposits: $5,000 to $12,000+
- Recording and other: $200 to $1,000
Dallas details to watch
- Recording and transfer: Dallas County recording fees apply; there is no Texas state transfer tax.
- Property tax proration: closing will prorate taxes for the year. Expect to fund an initial escrow deposit for taxes and insurance if your lender requires an escrow account.
- Homestead exemption: if you will occupy the home, review Dallas County homestead exemptions after closing. This affects future tax bills rather than your closing charges.
- HOAs in East Dallas: many M‑Streets and nearby communities involve neighborhood associations or HOAs with transfer or resale certificate fees that can affect timing and cost.
- Title company: sellers often propose the title company in the contract. Confirm who is closing your deal early so you can request fee quotes.
- Required timelines: your lender provides a Loan Estimate within three business days of application and a Closing Disclosure at least three business days before closing. Compare them carefully.
- Option period: use the option period to complete inspections and negotiate repairs or credits.
How to estimate your number
- Request Loan Estimates from at least two local lenders for the same program and down payment so you can compare origination fees, points, appraisal fees, and required escrow deposits.
- Ask for an itemized sample Closing Disclosure tailored to your target purchase price and loan amount.
- Confirm the lender’s escrow requirements, including how many months of taxes and insurance they will collect up front.
- Clarify who pays the owner’s title policy in your contract and ask the title company for a fee quote for lender-related title charges.
- Ask your lender how much the seller can contribute to your closing costs for your loan type and whether lender credits could reduce your cash to close.
Quick budgeting checklist for East Dallas buyers
- Down payment amount
- Earnest money estimate at 1% to 3%
- Option fee of $100 to $500
- Lender fees and appraisal per your Loan Estimate
- Inspections and survey budget of $500 to $2,000+
- Title and settlement fees based on a title quote
- Initial escrow deposits for taxes and insurance
- Miscellaneous cushion for wire, courier, and HOA transfer fees
Buying in the M‑Streets or nearby East Dallas neighborhoods should feel exciting, not confusing. If you want a clear, local number to plan around and introductions to trusted lenders and title partners, the team at Lardner Group is here to help. Schedule a consultation and move forward with confidence.
FAQs
What do Dallas buyer closing costs include?
- They cover lender charges, appraisal, title and settlement services, Dallas County recording fees, prepaid homeowners insurance and taxes, initial escrow deposits, inspections, surveys, and any HOA transfer or resale certificate fees.
How much should I budget for closing costs in East Dallas?
- A practical rule of thumb is 2% to 5% of the purchase price, with examples in this guide showing about $7,000 to $14,000 at $350k, $12,000 to $27,000 at $600k, and $20,000 to $50,000+ at $1M.
Who usually pays for title insurance in Texas?
- It is common for the seller to pay the owner’s title policy and the buyer to pay the lender’s title policy when financing, though this is negotiable in the contract.
Are Dallas buyer closing costs negotiable?
- Yes, many items are negotiable, including seller credits toward your costs, title fee splits, and whether you use lender credits to reduce cash to close, subject to your loan program’s rules.
When will I see my final closing numbers?
- Your lender must deliver a Loan Estimate within three business days of application and a final Closing Disclosure at least three business days before closing, which you should review line by line.
Do I have to set up an escrow account?
- Many lenders require an escrow account for taxes and insurance, which means you will fund an initial deposit at closing and then pay a portion with each monthly payment.
