Surprised by how many line items show up at the closing table in Plano? You are not alone. Understanding who pays what in Texas, and when, helps you budget with confidence and negotiate smarter. In this guide, you’ll learn typical buyer and seller costs in Plano and Collin County, what is custom versus negotiable, and how to estimate your cash to close or net proceeds. Let’s dive in.
Plano closing costs at a glance
Closing costs vary by loan program, price point, and negotiations, but here is a quick snapshot to help you plan:
- Buyers typically pay about 2% to 5% of the purchase price in closing costs. This excludes your down payment.
- Sellers typically pay about 6% to 10% of the sale price when including real estate commissions, plus other closing items and any loan payoffs. Commission amounts vary by brokerage and market conditions.
- Your lender must provide a Closing Disclosure at least 3 business days before closing. This shows final loan and settlement charges so you can review everything in advance.
These ranges are illustrative. Your actual costs will depend on your financing, contract terms, and local fees.
What buyers typically pay in Plano
Loan and lender fees
- Origination, underwriting, and processing fees. Often a flat fee or a percentage of the loan amount.
- Discount points if you choose to buy down the rate. Each point equals 1% of the loan amount.
- Application and credit report fees.
- Mortgage insurance if required by your loan program. FHA loans may include an upfront premium that can be financed.
- Prepaid interest from your closing date until your first payment.
- Initial escrow reserves, commonly 1 to 2 months of property taxes and insurance.
Title, escrow, and closing charges
- Lender’s title insurance policy is typically a buyer cost.
- Owner’s title insurance is customarily paid by the seller in Texas, but this is negotiable.
- Title search, settlement/closing fee, recording coordination, and courier or notary fees. Who pays the settlement fee can vary and may be split.
Inspections and reports
- General home inspection and optional add-ons. Many buyers also order a wood-destroying insect report, and specialty inspections as needed.
- Survey if requested or required by the lender.
Prepaids and escrow deposits
- First year of homeowner’s insurance is often paid at closing.
- Property tax prorations. You typically receive a credit on the closing statement for the seller’s portion already accrued.
- HOA transfer or estoppel fees when applicable. Amounts vary by association.
Recording and local fees
- Collin County recording fees to record the deed of trust and any related documents. Buyer usually pays mortgage recording fees.
- Flood certification and any municipal utility district items when applicable.
Cash to close formula
- Cash to close = Down payment + Buyer closing costs + Prepaid items – Earnest money credit.
What sellers typically pay in Plano
Real estate commissions
- Often the largest seller expense. In many markets, total commissions commonly range around 5% to 6% of the sale price, shared between listing and buyer representation. Actual amounts vary and are negotiable.
Owner’s title insurance and settlement
- In Texas, the seller customarily pays for the owner’s title policy, though this is negotiable.
- Seller-side settlement charges can include document prep, courier, wire fees, and a portion of the settlement fee if split.
Prorations and payoffs
- Prorated property taxes and HOA dues based on the closing date.
- Mortgage payoff, lien releases, and any payoff-related fees.
Repairs and concessions
- Agreed repairs, credits for buyer closing costs, or price reductions. Credits reduce your net proceeds dollar for dollar.
Other seller costs
- Home warranty if you offer one.
- Any unpaid assessments or HOA charges.
- Texas has no state or local real estate transfer tax, which can lower seller costs compared to other states.
Local factors in Collin County
Property taxes and proration
- The Collin Central Appraisal District sets appraised values, and taxing entities set tax rates.
- Texas property taxes are typically paid in arrears. At closing, taxes are prorated based on the closing date using the most recent tax year, and your lender may collect escrow reserves if you are a buyer.
Title and Texas practice
- Texas custom often places the owner’s title policy with the seller. The lender’s policy is typically a buyer cost.
- Attorneys are not required for Texas closings, though parties may choose to involve them.
HOA items in Plano
- Many Plano neighborhoods are in HOAs. Expect transfer and estoppel fees, along with any unpaid assessments, to be addressed at closing.
New construction considerations
- Builder contracts may allocate costs differently. Builders may use preferred lenders or title companies and have set closing fees. Warranty transfers and new-home tax proration can affect your figures.
Negotiations and concessions
- Seller concessions can cover some buyer closing costs and prepaids, subject to loan-program limits. Always confirm limits with the buyer’s lender before finalizing contract terms.
- Price credits, repair allowances, and who pays specific fees are negotiable. These choices affect a buyer’s cash to close and a seller’s net proceeds.
Illustrative examples
These examples are for demonstration only. Your actual numbers will differ.
How to prepare for closing in Plano
Use this checklist to get clear, accurate numbers early:
- Ask your lender for a Loan Estimate early and your Closing Disclosure at least 3 business days before closing.
- Confirm which closing costs are custom versus negotiable in Texas, including who pays the owner’s title policy.
- Verify Collin County recording fees, HOA transfer and estoppel amounts, and current property tax status.
- If you are a buyer, ask how much prepaid interest and initial escrow reserves you will need based on your closing date.
- If you are a seller, request a detailed net proceeds worksheet showing commission, payoffs, prorations, and estimated closing charges.
- For any seller credits, confirm loan-program concession limits with the lender before writing the contract.
Ready to plan your move?
Whether you are buying in the Dallas–Plano–Irving area or selling a home in Collin County, clear numbers make decisions easier. If you want a straightforward conversation about budgeting for closing, timelines, or how new construction closing costs can differ, reach out to Linda Baker.
FAQs
In Plano, how much do buyers usually pay in closing costs?
- Buyers commonly pay about 2% to 5% of the purchase price in closing costs, excluding the down payment. Your lender, loan type, and contract terms will affect the final amount.
In Texas, who customarily pays for the owner’s title insurance policy?
- It is customary for the seller to pay for the owner’s title policy in Texas, though this is negotiable. The buyer typically pays for the lender’s policy.
Does Texas charge a real estate transfer tax at closing?
- No. Texas does not have a state or local real estate transfer tax, which can lower overall seller costs compared to states that do.
How are property taxes prorated at closing in Collin County?
- Taxes are typically paid in arrears in Texas. At closing, taxes are prorated based on the closing date and the most recent tax year, and buyers may fund escrow reserves depending on lender requirements.
What prepaid items should Plano buyers expect at closing?
- Common prepaids include the first year of homeowner’s insurance, prepaid interest from the closing date to the first payment, and initial escrow deposits for taxes and insurance.
When will I see my final closing numbers for a purchase in Plano?
- Your lender must provide a Closing Disclosure at least 3 business days before closing for most closed-end consumer mortgages. Review it carefully and ask questions right away.
Can seller credits cover all of a buyer’s closing costs in Plano?
- Seller credits can offset some or all of a buyer’s closing costs and prepaids, but loan programs set limits. Always confirm allowable concession amounts with the lender before finalizing terms.
Who pays HOA transfer and estoppel fees in Plano neighborhoods?
- HOA fees vary by association. Transfer and estoppel fees are commonly handled at closing and are allocated by contract terms and local custom, which your agent and title company can help confirm.
