Understanding the fees involved when a property changes hands—critical for accurate MAO calculations.
Closing costs are all the fees and expenses paid when a real estate transaction is finalized. They're split between buyer and seller, and they eat into your profit margin—so you must account for them.
In Texas, total closing costs typically run 1.5-3% of the purchase price for each side of the transaction.
Title Insurance (Owner's Policy)
Protects buyer against title defects
Real Estate Commission
If agents involved (not us!)
Transfer Taxes / Doc Stamps
Varies by state/county
Prorated Property Taxes
Seller's share through closing date
HOA Fees / Certificates
If applicable
Title Search & Escrow Fees
Title company services
Lender's Title Insurance
If financing (not cash buyers)
Recording Fees
County fee to record deed
Survey (if required)
Property boundary verification
Inspection Fees
Home, pest, etc.
When buying from a motivated seller, you often pay THEIR closing costs as an incentive. Budget $1,500-2,500 per transaction.
Cash investors buying from us typically pay their own closing costs. They'll budget this into their offer to you.
If you double close instead of assign, you pay closing costs TWICE—once as buyer, once as seller. Budget $3,000-4,000 total.
1.5%
Seller Side
(No agent)
1%
Buyer Side
(Cash)
3%
Buyer Side
(Financed)
7-8%
Seller w/ Agent
(Traditional)
Always budget for closing costs in your MAO calculations. For wholesaling, plan on $1,500-2,500 if you're paying seller's costs on acquisition. For double closes, budget $3,000-4,000 total. These costs reduce your profit—don't forget them!