What Are Closing Costs, and Who Pays Them?

Many buyers are prepared for their down payment—but not for the closing costs that come with it.
In Lubbock’s 2025 real estate market, closing costs typically range from 2% to 4% of the home’s purchase price, depending on your loan type, lender, and property taxes.

So, what exactly are they?
Closing costs are the fees and expenses involved in finalizing your home purchase. They cover everything from lender processing to title work and escrow setup.

Here’s a quick breakdown:

For Buyers:

• Lender Fees: Origination charges, underwriting, and credit report fees.

• Appraisal Fee: Usually $500–$700, required by your lender.

• Title Fees: The title company handles the transaction, ensures a clean title, and issues title insurance.

• Prepaids & Escrow: Initial deposits for property taxes and homeowners insurance.

• Recording Fees: Paid to Lubbock County to officially record your ownership.

For Sellers:

• Agent Commissions: Typically the largest seller expense.

• Title Policy: Covers the buyer’s ownership protection (customary for sellers to pay in Texas).

• Pro-rated Taxes: Sellers pay taxes for the portion of the year they owned the property.

• Any Agreed Repairs or Concessions.

While it may sound like a lot, many buyers use seller-paid closing costs to help offset their out-of-pocket expenses. Depending on the offer and market conditions, I often negotiate for the seller to cover a portion—or even all—of those fees.

For instance, a 3% seller contribution on a $300,000 home equals $9,000, which can cover loan fees, prepaids, and even part of your insurance escrow.

Here’s a pro tip:
Get a Loan Estimate from your lender early. It details all estimated closing costs and helps you plan well before signing day. I review those side by side with my clients to make sure nothing sneaks through unexplained.

In Lubbock, title companies like Centennial, Title One, and Lubbock Abstract make the process smooth—just bring your ID and a clear head for all the signatures.

Buying a home isn’t just about saving for the down payment—it’s about being prepared for the full picture.

And when you know exactly where every dollar is going, closing day feels less like a surprise and more like a celebration.

— Insights from Tess Hernandez, Realtor | Reside Real Estate