The cost to sell a house in Texas typically runs 8% to 10% of the final sale price once you add agent commissions, title insurance, prorated property taxes, and smaller closing charges. On a $400,000 home, that’s roughly $32,000 to $40,000 taken out of your proceeds before the title company wires you the balance. Texas sellers catch two breaks the rest of the country doesn’t: no state income tax, and no state or local transfer tax. Everything else still adds up quickly, so it helps to walk through each line before you set a listing price.
Agent Commissions Are the Biggest Line
Commission is almost always the largest cost. Total commissions average around 5% to 6% of the sale price, split between the listing brokerage and the buyer’s brokerage. At 6% on a $400,000 sale, that’s $24,000, with roughly half going to each side.
Since August 2024, a nationwide settlement involving the National Association of Realtors changed how commissions are discussed and documented. Buyers must now sign a written buyer-broker agreement before an agent shows them homes, and that agreement must state clearly that commissions are fully negotiable and not set by law.1National Association of REALTORS®. What the NAR Settlement Means for Home Buyers and Sellers For you as a seller, that means the listing commission is negotiable, and so is any amount you offer to cover the buyer’s agent. Offering less (or nothing) to the buyer’s side is allowed, though it may affect how many agents bring their clients through your door.
You don’t write a check for commissions. The title company deducts them from your sale proceeds at closing and pays each brokerage directly.
Title Insurance and Escrow Fees
Texas is unusual: the Department of Insurance sets a fixed rate schedule for title insurance, so every title company charges the same premium for the same sale price. On a $400,000 home, the owner’s title insurance policy costs $2,262 under the current schedule.2Texas Department of Insurance. Title Insurance Basic Premium Rates Either party can legally pay the premium, but the longstanding custom in most Texas counties puts it on the seller.
If you bought the home within the last three years and still have your owner’s policy, you may qualify for a reissue credit that reduces the premium. Mention this to the title company early so the discount can be verified and applied.
On top of the premium, the title company charges an escrow or settlement fee for handling the closing: holding documents, disbursing money, and recording the deed. Expect roughly $500 to $700 for a standard residential closing. Local custom sometimes splits this fee between buyer and seller.
Prorated Property Taxes
Texas collects property taxes in arrears. The current year’s bill isn’t due until October and doesn’t go delinquent until February 1 of the following year.3Comptroller of Public Accounts. Property Tax Law Deadlines Because you probably haven’t paid anything toward this year’s taxes when you sell, the title company credits the buyer for every day you owned the home during the tax year, so the buyer has the money to pay the full bill later.
The math is simple. Divide the annual tax bill by 365, then multiply by the number of days from January 1 through the closing date. If your annual tax is $9,000 and you close June 30, you owe about $4,438 as a credit to the buyer. That amount comes straight out of your proceeds.
HOA Documents and Recording Fees
If your property is in a homeowner association, you’ll need a resale certificate before closing. Texas law requires the HOA to deliver it within 10 business days of a written request, with current dues, outstanding assessments, and the association’s rules. The association can charge up to $375 for the initial certificate and up to $75 for an update, both statutory caps.4State of Texas. Texas Property Code 207.003 – Delivery of Subdivision Information to Owner Sellers customarily pay for it.
Sellers also pay county recording fees to release any existing liens, including a mortgage or home equity lien. These are usually $50 to $150 depending on the county and the number of filings. Expect small wire transfer and courier charges on your settlement statement as well, typically $25 to $50 each.
Pre-Sale Preparation
None of this is required, but most sellers spend something to get the house ready. The amounts swing hard based on the home’s condition.
- Pre-listing inspections run $300 to $500 and surface problems you can fix before a buyer’s inspector finds them. Repair costs depend entirely on what’s wrong.
- Staging consultations typically cost $150 to $600. Full-service staging with rented furniture can run $500 to $600 per room per month. Most sellers spend $800 to $3,000 total.
- A one-year home warranty offered to the buyer runs $300 to $600 and is paid at closing out of proceeds.
Skipping all of it is an option. The tradeoff is often a lower sale price or a longer time on the market.
Federal Taxes on the Sale
Texas has no state income tax, so any capital gains tax is federal only. If you owned the home and used it as your primary residence for at least two of the five years before the sale, you can exclude up to $250,000 in profit, or $500,000 for a married couple filing jointly.5Internal Revenue Service. Topic No. 701, Sale of Your Home For the full joint exclusion, both spouses must individually meet the two-year residency test, though only one needs to meet the ownership test.6Internal Revenue Service. Publication 523, Selling Your Home
Taxable gain is not just sale price minus purchase price. You can add the cost of capital improvements (a new roof, a room addition, central air, rewiring) to your cost basis as long as each improvement has a useful life of more than one year.7Internal Revenue Service. Publication 551, Basis of Assets Keeping receipts throughout the years you own the home can shrink or wipe out a taxable gain at sale. For most Texas sellers, the exclusion covers the full gain. Investment properties and homes owned less than two years don’t qualify.
FIRPTA Withholding Applies Only to Foreign Sellers
If you’re a foreign national selling U.S. real property, the buyer is generally required to withhold 15% of the sale price and send it to the IRS under the Foreign Investment in Real Property Tax Act.8Internal Revenue Service. FIRPTA Withholding On a $400,000 sale, that’s $60,000 held back at closing. An exception applies when the buyer is an individual purchasing the property as a personal residence and the sale price is $300,000 or less; the buyer or a family member must plan to live there at least half the days the home is used in each of the first two years.9Internal Revenue Service. Exceptions From FIRPTA Withholding The withholding isn’t the actual tax. It’s a deposit, and you file a U.S. return to claim any refund. U.S. citizens and resident aliens aren’t subject to FIRPTA at all.
Mortgage Payoff
If you still owe on a mortgage, the title company pays off the loan directly from your proceeds before anything comes to you. The payoff is your remaining principal plus interest accrued through the closing date, so it will be slightly higher than your current balance.
Prepayment penalties are rare on modern loans. For “qualified mortgages” under federal law, no prepayment penalty is allowed after the first three years of the loan, and non-qualified mortgages can’t carry a prepayment penalty at all.10Office of the Law Revision Counsel. 15 USC 1639c – Minimum Standards for Residential Mortgage Loans If your loan is older or unusual, check the note or call your servicer.
What It Looks Like on a $400,000 Sale
A rough breakdown of seller costs on a $400,000 Texas home:
- Agent commissions at 5%–6%: $20,000 to $24,000
- Owner’s title insurance: $2,262
- Escrow or settlement fee: $500 to $700
- Prorated property taxes: varies by closing date and tax rate
- HOA resale certificate, if applicable: up to $375
- Recording and lien release fees: $50 to $150
- Optional home warranty for the buyer: $300 to $600
- Pre-sale repairs and staging: $0 to $3,000 or more
Set the mortgage payoff aside and total seller costs on a $400,000 Texas home generally land between $25,000 and $32,000. The actual number depends on the commission you negotiate, your local tax rate, and how much you spend getting the house ready. Running these numbers before you list keeps the price you set and the check you take home on the same page.