The checks you write before closing
Earnest money
Delivered when your offer is accepted, typically around one percent of the price. It shows the seller you're serious, sits with the title company, and is credited toward your purchase at closing. You get it back if you exit within the protections we build into your contract.
The option fee
Texas gives buyers something most states don't: a negotiated option period during which you can terminate for any reason at all. The fee for that right is usually a few hundred dollars and is typically credited back at closing if you buy. This window is where the inspection happens and where repair negotiations start. It's the best consumer protection in Texas real estate; we always use it well.
The inspection
You pay the inspector directly during the option period, typically a few hundred dollars depending on the home's size and any add-ons like pool or foundation-elevation surveys. It's the best money in the entire transaction. What it finds either gets fixed, gets credited, or tells us to walk.
What's inside "closing costs"
- Lender charges: origination, underwriting, appraisal, credit report. Your Loan Estimate itemizes these within days of applying, and lenders can be shopped.
- Title and escrow: the lender's title policy, settlement fees, recording. In Texas the seller customarily pays for the owner's policy; buyers typically cover the lender's policy and their side of escrow fees.
- Prepaids and escrow reserves: your first year of homeowners insurance paid up front, plus a cushion of property taxes and insurance deposited into your escrow account. In a high-property-tax state this is a meaningful part of your cash to close, and it's the piece first-time Texas buyers most often forget to budget.
One offset in your favor: because Texas property taxes are paid in arrears, the seller credits you at closing for the months they owned the home this year. That credit reduces your cash to close.
A worked example at Houston's median
Houston's median single-family price was about $330,000 in the latest HAR report. Illustrative numbers, not quotes:
| Item | When | Illustrative range |
|---|---|---|
| Earnest money | Offer accepted | ~$3,300 (credited at closing) |
| Option fee | Offer accepted | a few hundred (typically credited) |
| Inspection | Option period | a few hundred |
| Closing costs + prepaids | Closing | ~2–3% (~$6,600–$9,900) |
| Seller's tax proration credit | Closing | reduces your total |
| Cash needed beyond down payment | plan ~2.5–3.5% all-in |
New construction has its own math
Builders often ask for larger earnest deposits and design-center deposits, and often offer closing-cost incentives tied to their preferred lender. Sometimes that lender is genuinely the best deal; sometimes the incentive hides a worse rate. I read both sides of that math with you before you sign anything. More on this in the buyer page's new-construction section.
Selling a home to fund this purchase? The other half of your math is in what it costs to sell, and if you're doing both at once, read how to sell and buy at the same time.
Full-time REALTOR® with eXp Realty in Katy, TX (TREC License #788889). Rated 4.98/5 across 40 verified HAR client surveys and 5.0 on Google. Read the reviews or call or text 515-631-2378.
This guide is educational, not legal, tax, or lending advice, and every situation is different. Verify anything that matters to your purchase or sale with your agent, lender, CPA, or attorney.