Closing Costs in Katy: Who Pays What?

Staring at a long list of fees on your settlement statement and wondering who pays what in Katy? You are not alone. Closing costs can feel confusing, especially with local factors like MUD taxes, HOA paperwork, and county recording rules. In this guide, you will learn what each fee covers, how costs are commonly split in Fort Bend County, and where local customs can save you money. Let’s dive in.

What closing costs cover in Katy

Closing costs are the one-time expenses to finalize your home sale or purchase. Some are tied to your lender. Others come from the title company, county, HOA, or special districts. Many are negotiable.

Common categories include:

• Title and escrow: title search, owner’s title policy, lender’s title policy, escrow or settlement fee.
• Lender charges: origination and underwriting, appraisal, credit report, prepaid interest, mortgage points if you choose them.
• Government and recording: county recording of the deed and loan, certified copies, notary and courier fees. Texas does not charge a state transfer tax.
• Taxes and prorations: property taxes and special district assessments, prorated to the closing date.
• Inspections and survey: home inspection, pest report, flood certification, survey if needed.
• HOA and community: HOA transfer and estoppel certificate, plus prorated dues or assessments.
• Seller items: real estate commission, mortgage payoff, lien releases, and any negotiated repairs or credits.

Who pays what in Fort Bend County

In Texas, most closing costs are negotiable and the purchase contract decides who pays each item. The state’s standard forms help you allocate fees clearly.

Seller typically pays

• Real estate commission. Market practice often ranges from 5% to 6% of the sale price, but commission is fully negotiable and set by your listing agreement.
• Payoff of the seller’s mortgage and any other liens or judgments.
• Owner’s title insurance policy in many Greater Houston transactions. This is a local custom and negotiable.
• HOA estoppel or account status documents in some deals, plus any seller share of prorated dues or assessments as agreed.

Buyer typically pays

• Lender-related charges, including origination, underwriting, appraisal, credit report, and required inspections.
• Lender’s title insurance policy if you finance the purchase.
• Survey if your lender requires one and the seller does not provide an acceptable survey.
• Escrow deposits for property taxes and homeowners or flood insurance if your lender requires them.

Shared or negotiable

• Escrow or settlement fee. Some title companies split this 50/50, though practice varies.
• Recording fees. Who pays can vary. Sellers often pay to record the deed, buyers often pay to record the deed of trust, but you can negotiate.
• Owner’s title policy. Seller often pays in Houston-area custom, but the buyer may pay in other Texas markets.
• Prorations for property taxes and HOA dues. These are split based on the closing date.

For specifics, the TREC residential contract forms outline how fees are assigned, where to enter credits, and how prorations work. Your agent and title company will use the contract to finalize who pays which amounts.

Fort Bend specifics that affect your bottom line

No state transfer tax in Texas

Texas does not impose a real estate transfer or conveyance tax. That means you avoid a line item that many other states charge.

Recording and clerk fees

Your deed and, if applicable, your deed of trust must be recorded with the Fort Bend County Clerk. Fees are set by the county and depend on document type and page count. You can review the current Fort Bend County Clerk recording fee schedule to estimate this cost.

Property tax prorations

Property taxes are billed annually and are usually prorated at closing based on the closing date. The seller pays for the portion of the year they owned the home, and the buyer takes over for the remainder.

• The Fort Bend County Appraisal District sets appraised values and lists the taxing entities for each parcel.
• The Fort Bend County Tax Office handles tax billing and collections. Your title company uses these figures to calculate prorations.

MUD districts

Many Katy neighborhoods are in Municipal Utility Districts that levy a separate tax to repay bonds for water, sewer, and related infrastructure. MUD taxes are usually prorated at closing. Buyers should ask about current rates, outstanding bond debt, and any anticipated changes. Your lender will require disclosure of MUD obligations because they affect your ongoing housing costs.

HOA transfer and estoppel fees

If the property is in an HOA, there is often an estoppel or account status letter that confirms dues and whether any violations or assessments are outstanding. Fees vary by HOA or management company, and who pays is negotiable. Some contracts assign these to the seller because the seller signs transfer paperwork, while others split or shift the cost to the buyer.

Flood and insurance

Lenders require a flood certification. If the home lies in a flood zone that requires insurance, you must secure flood coverage and your lender may collect reserves at closing. Parts of Katy have experienced flooding in past years, so it is wise to review insurance needs and potential escrow deposits early.

Timeline and what to expect

If you are financing, federal rules require your lender to give you a Loan Estimate within three business days of your application and a final Closing Disclosure at least three business days before you sign. The CFPB’s guide to the Closing Disclosure explains what each line means and the timing.

Your title company will balance the settlement, collect any required payoffs, and record documents after funding. Review prorations, credits, and the payoff figure closely. If you see errors, speak up before signing.

Wire fraud is a real risk. Always confirm wiring instructions directly with your title company by phone or in person. Do not rely on last-minute emails to change where you send funds.

Typical cost ranges in Katy

Actual amounts depend on price, lender, title company, and HOA or MUD policies. The ranges below are common in Texas and the Greater Houston area:

• Real estate commission: commonly 5% to 6% of the sale price, but fully negotiable.
• Home inspection: about $300 to $700, based on size and complexity.
• Appraisal: about $400 to $800 for a single-family home.
• Title insurance: regulated statewide. See current Texas Department of Insurance title insurance rates and confirm the exact premium with your title company.
• Recording fees: modest per-document and per-page charges. Check the county’s fee schedule for current amounts.
• HOA estoppel or transfer: often $100 to $400 or more depending on the association.
• Survey: about $300 to $1,000 based on lot size and complexity.

Note that lenders may also collect several months of tax and insurance reserves to fund your escrow account at closing.

Quick checklists

If you are buying

• Review your Loan Estimate and budget for lender fees, appraisal, and prepaid items.
• Decide early about rate points and how they affect cash to close.
• Ask your agent who is customarily paying the owner’s title policy in your area, then negotiate if needed.
• Confirm whether a new survey is required.
• Ask the title company for estimated prorations for property taxes, MUD, and HOA dues.
• Verify wiring instructions directly with the title company.

If you are selling

• Order mortgage payoff statements and confirm any HOA balances or violations.
• Discuss commission, closing credits, and repair concessions with your agent, then reflect them in the contract.
• Clarify who will pay for the owner’s title policy, HOA estoppel, and any transfer fees.
• Provide a prior survey and T-47 affidavit if acceptable, to avoid a new survey cost for the buyer.
• Check the settlement statement for accurate prorations and lien releases.

Final thoughts and next steps

In Katy, the contract decides who pays which closing costs, and local customs can shift expenses in your favor if you negotiate them up front. Focus on the big levers that affect your net: title policy allocation, lender fees and points, HOA and MUD charges, and accurate tax prorations. Confirm the details with your title company and lender early so you have no surprises on closing day.

If you would like a local, team-based walkthrough of your numbers for a Katy sale or purchase, reach out to Bolanos Realty. We will help you model your net proceeds or cash to close, spot negotiable items, and plan a smooth closing.

FAQs

Who pays the owner’s title insurance in Katy transactions?

• It is negotiable. In many Greater Houston deals the seller often pays the owner’s policy, but your contract controls.

Are property taxes prorated at closing in Fort Bend County?

• Yes. Taxes are usually prorated through the closing date based on the current tax year and paid or unpaid status.

Does Texas charge a real estate transfer tax on Katy homes?

• No. Texas does not have a state transfer or conveyance tax.

Who covers HOA estoppel and transfer fees in Katy?

• It varies by deal. Some contracts assign these to the seller, others to the buyer, or they are split. Negotiate and document in the contract.

How are MUD taxes handled when I buy in Katy?

• MUD taxes are typically prorated at closing. Ask for current rates and any outstanding bond obligations because they affect your ongoing tax bill.

When will I see my final closing costs if I am getting a mortgage?

• Your lender must deliver a Closing Disclosure at least three business days before you sign. Review it carefully and ask your title company to explain any changes.