What actually comes out of your check
Your sale price is not your money. Out of it come your mortgage payoff, what you owe your own broker, title and escrow fees, deed preparation, prorated property taxes, and anything you agreed to contribute toward the buyer. Paragraph 12 of the TREC contract sets out who pays what.
This explains how home selling works in Texas. It is not legal advice and it is not tax advice. Kyle is a Realtor. For advice about your own situation, talk to an attorney or a tax professional.
People anchor on the sale price and then get quiet at the closing table. Here is the whole list, so the settlement statement is a confirmation rather than a surprise.
For a number on your own house, the seller net proceeds calculator will get you close. This page is about what the line items actually are and why.
The big one first
Your mortgage payoff. Not your balance. The payoff, which includes interest through the funding date and any prepayment penalty. The contract makes the release of existing liens your expense, including prepayment penalties and the recording fees to get the lien released, plus the release of your own loan liability.
If you have a second lien, a home equity loan or a HELOC, that pays off too. People forget the HELOC they opened years ago and never closed.
What the contract assigns to you
Then there is a separate blank where you may agree to help with the buyer’s costs.
The paragraph that is new
There is a mirror provision, 12B(2), where a buyer can contribute toward what you owe your broker. It does not come up often, but it exists.
One more detail that matters on government loans. Paragraph 12C says that if a loan program prohibits the buyer from paying certain charges, your concession under 12A(1)(b) gets applied to those prohibited expenses first, then to the buyer’s other expenses, but not to brokerage compensation or contributions. So a VA buyer’s non-allowable fees eat into your concession before anything else does.
Title, escrow and the small lines
The owner’s title policy is a checkbox in Paragraph 6A, seller’s expense or buyer’s expense. Around here the seller commonly pays it, but the contract genuinely does not decide it and it is negotiable.
One half of the escrow fee. That is the title company’s charge for running the closing.
Preparation of the deed, and tax statements or certificates showing there is nothing delinquent.
The survey, if you agreed to furnish a new one, or if you were supposed to provide your existing survey plus the T-47 affidavit or T-47.1 declaration and did not deliver both in time. In that case the buyer gets a new survey at your expense.
Amending the survey exception. If the buyer wants the standard exception amended to read “shortages in area,” Paragraph 6A(8) says whose expense that is, and it is a checkbox.
Private transfer fees. If your subdivision has one, Paragraph 9B(5) makes it your obligation unless the contract says otherwise. HOA transfer fees are handled separately, under the POA addendum, form 36-11.
HOA documents. The resale certificate is capped by statute at $375 to assemble and deliver, and $75 for an update. Who pays gets settled in the POA addendum. The MUD, PID and HOA page covers the timing, which causes more delayed closings around here than the cost does.
Property taxes, and the part that catches people
Two things follow from that.
If you close in the fall, your proration is large. You have lived there most of the year, so most of the unpaid bill is yours. That is not a fee, it is taxes you genuinely owe, but it is a big line and it surprises people who were expecting a small one.
The adjustment afterward is a real obligation. If the actual bill lands different from what was estimated, the two of you settle up. It can run in your favor or against you.
I am a Realtor, not a tax advisor. For anything about your specific exemptions, the county appraisal district that covers your property is the authority, and Collin CAD and Denton CAD will both answer the question directly.
Repairs, concessions, and the things you agreed to
Anything you agreed to in an amendment comes out here too. Repairs you took on, a credit you offered instead of repairs, a home warranty you agreed to buy for the buyer.
Worth being clear with yourself during negotiation: a $5,000 credit and a $5,000 price reduction are not the same thing to the buyer, because a credit helps them with cash at closing while a reduction helps their monthly payment. They cost you about the same. Ask which one they actually need, because sometimes the cheaper answer for you is the more useful one for them.
If this happens: the settlement statement has a line you do not recognize
What is actually true
It happens, and it is almost always explainable. Title companies handle a lot of small charges that never came up in conversation.
Your options
What I would do
Ask for a draft settlement statement a few days before closing rather than reading it for the first time at the table. Every title company will send one. Questions are much easier to resolve when there is not a room full of people waiting on you.
If this happens: you are going to net less than you owe
What is actually true
This is worth finding out early rather than at the table. If the payoff plus costs exceeds the sale price, you either bring money to closing or you are in a short sale conversation, and those are very different situations.
Your options
What I would do
Run the numbers before you list, not after you have an offer. If it is close, get an actual payoff quote from your lender rather than relying on your online balance, because interest and any prepayment penalty are not in that number.
The short version
Off the top: your payoff, your broker, half the escrow fee, the deed, tax certificates, the title policy if you are paying it, and prorated taxes through closing. Then anything you agreed to contribute toward the buyer, which since the contract changed is two separate decisions rather than one.
Run your own numbers with the net proceeds calculator, then ask your title company for a draft settlement statement before closing day. The calculator gets you in the neighborhood. The settlement statement is the real thing.
Frequently asked questions
Paragraph 12A(1) of the TREC contract lists the seller's expenses: releases of existing liens including prepayment penalties and recording fees, release of the seller's loan liability, tax statements or certificates, preparation of the deed, one half of the escrow fee, and other expenses the contract makes the seller's. Your mortgage payoff and your broker's compensation come out on top of that.
Not automatically, and not anymore by default. Paragraph 12B of the current TREC contract says brokerage compensation is not set by law and is fully negotiable, and that each party pays their own broker under separate written agreements. A seller may choose to contribute toward the buyer's broker, and that is its own checkbox.
It is a checkbox in Paragraph 6A of the contract. In North Dallas the seller commonly pays it, but the contract does not decide that for you. It is negotiable like everything else on the page.
Texas property taxes are paid in arrears, at the end of the year for the year you are in. At closing you hand the buyer your share of a bill nobody has paid yet, prorated through the closing date. If your exemption is coming off, the proration can be calculated on the higher figure.
It is the title company's fee for handling the closing. Paragraph 12 splits it, with each side paying one half.
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Sources
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