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17 min read Jan 21, 2023

What Are the Seller Closing Costs in Tennessee?

Seller Closing Costs in Tennessee

Congratulations! You’re now almost at the finish line. But before you pop open the champagne, you have to go through the closing process to transfer the property to the buyer legally.

Closing on a Tennessee property can be overwhelming and exhausting. However, familiarizing yourself with the process and various closing costs in Tennessee can make the process smoother and easier.

Key Takeaways

  • Closing costs, also known as “settlement costs,” are the final expenses to complete the real estate transaction.
  • Closing costs are separate from the price of the property.
  • The seller and the buyer have to pay specific closing costs.
  • In Tennessee, the closing process is can be carried out by an escrow a title agency or an attorney.
  • Due to different fees and statute requirements, closing costs vary in municipalities and states.


What are Closing Costs in Tennessee?

Closing costs in Tennessee are a set of expenses that the seller and the buyer must pay to finalize the real estate transaction and transfer the ownership of the house. Some are closing costs negotiable, while others are non-negotiable, like taxes charged by your state or local jurisdiction.

Who Pays Closing Costs in Tennessee?

Both the seller and buyer pay the closing costs. Although the buyer has to pay more number of fees as closing expenses, a seller has to pay a higher amount as closing costs.

However, sellers need not wonder about how much is an appraisal in Tennessee because buyers are the ones usually responsible for costs like appraisal fees, title insurance, and mortgage fees.

Most of the sellers closing costs in Tennessee are deducted from the proceeds they get for the property. As such, the seller needs enough equity to cover some of the expenses.

Tennessee real estate brokers will know who typically pays what for the closing costs in Tennessee. So, it’s important to seek professional advice. Hiring an experienced agent can help lower estimated closing costs for seller in Tennessee. Remember, some of the fees are negotiable, which your agent can discuss with you.

» Estimate Seller Closing Costs Calculator Tennessee: Calculate seller closing costs using Houzeo’s advanced Closing Cost Calculator

How Much are Closing Costs in Tennessee?

The estimated closing costs when you sell your home in Tennessee could reach up to 8% to 10% of the final sale price of the home, not including the mortgage payoff. The biggest closing cost (5%-6%) the seller has to pay is the commission of the listing and buyer’s agent. The remaining 3%-4% includes expenses like home inspection fee, HOA fee, estoppel fee, etc.

Let’s take a deeper look at typical closing costs for sellers in Tennessee!

What Are the Different Home Seller Closing Costs in Tennessee?

1. Attorney’s Fee

Sellers usually hire real estate attorneys in Tennessee to review the sales contract, especially when no real estate brokers are involved or there are any legal issues with the property. However, you can hire a real estate attorney even if your case is not unusual.

So, who pays attorney fees at closing? In most cases, the seller and buyer hire different attorneys to represent their best interests. However, if you and the buyer decide to hire the same attorney, the attorney fee will be split.

Typically, real estate attorney fees in Tennessee can range from $150 to $450, depending on the type of home being sold and the type of sale it is.

2. Credits Towards Closing Costs

You can offer to help buyers with closing costs to make the property more attractive, especially if you live in an area where market competition is low. These costs are called closing credits or seller concessions and are paid at closing.

» How Much are Closing Costs for Buyer in Tennessee: Find out more about the typical buyer closing costs in Tennessee before deciding on seller credits.

3. Escrow Fee

An escrow is a neutral third party that holds certain funds or the property until the contract conditions have been met. It protects the interest of both parties by ensuring that either does not wrongfully back out of the deal and lose money. Typically, the escrow fee will be split between the buyer and you as both parties benefit from it.

4. Home Inspection Fee

The law in Tennessee does not mandate an inspection when selling a house. However, disclosure laws in Tennessee dictate that the seller must inform the buyer about the condition of the amenities included with the sale and report any structural defects or malfunctions of mechanical components. They must also inform the buyer about any known environmental hazards, encroachments, flood or drainage problems, or remodeling work done without permits or compliance with building codes.

You can opt for a home inspection to identify any major defects and issues, like plumbing issues, water damage, mold, appliance malfunction, etc., in the house. This can be done before the property is listed on the market (pre-inspection) or just before the closing.

The buyer can also undertake a home inspection. However, if they find undisclosed defects, it might give them the upper hand during negotiations, or they may back out of the deal.

» How Much Does a Home Inspection Cost Tennessee: Find out if a home inspection is worth the price.

5. Home Warranty Fee

A home warranty covers the maintenance cost of the devices and appliances in the house for a limited time period, like, days, months, or years. You may offer a home warranty to make the property more desirable for buyers.

8. Homeowner Association(HOA) Fee/ Document Fee

If you are a part of the Homeowners Association(HOA), you will have to pay the fee due until the closing date and clear the remaining dues, if any. In most cases, you will not be able to close on the house until the dues are paid.

However, if the issue persists and is not resolved before closing, the HOA can place a lien on your house and even initiate foreclosure.

9. HOA Estoppel Fee

The HOA Estoppel letter is a legally binding document containing details about the financial obligation, like the monthly fee, that the buyer will have to pay after closing. It also offers information about any unresolved dues you may owe.

The HOA Estoppel fee needs to be paid by you as part of the process. It ranges from $200-$500.

10. HOA Transfer Fee

If you are a part of the Homeowners Association, at the time of closing, the ownership of your house needs to be transferred to the buyer in HOA records. HOA transfer fee is a one-time non-negotiable charge that you pay the HOA to update their records.

11. Mortgage Payoff

Mortgage payoff will most likely be one of the biggest items on your list of fees. You’ll have to pay off any remaining balance of the mortgage on your property with the proceeds of your home sale at closing. This includes interest accrued from the last payment to the day of closing and any penalty the lender might charge you for prepayment of the mortgage.

Contact your lender and discuss the requirements to pay off the mortgage to get the overall details of your closing costs. Also, check for the loan documents to see if there’s any prepayment penalty with your mortgage.

12. Municipal Lien Search

A Municipal Lien Search can help you uncover any unrecorded liens, code violations, permits, taxes, and utility bills, associated with the property. While many sellers forego a municipal lien search, it can complement a title search, especially since it offers additional information about open or expired permits.

An open or expired permit can be a thorn in the side for both you and the buyer as it can lead to further expenses and delays in the sale. On average, a municipal lien search costs $200.

13. Owner’s Title Insurance

So, what is the cost of title insurance in TN? The title insurance cost is based on the property value and is decided by the state. Primarily, you, the seller, will pay for the owner’s title insurance to protect the buyer against discrepancies relating to the ownership of the property or false documentation. Additionally, title insurance takes care of any back taxes, liens, ownership clauses, etc.

Both parties can negotiate who purchases the owner’s title insurance.

» Who Pays for Owner’s Title Insurance in Tennessee: Read further to know more about owner’s title insurance in Texas.

14. Property Taxes

The owner of the house has to pay property tax to the local government. The average property tax in Tennessee is 0.70% of the appraised value of the property. The appraised value of the property in Tennessee depends on how the property is used.

Property tax can be paid annually or at the time of the real estate transaction. You must pay prorated property tax according to the date of purchase at closing.

15. Real Estate Broker Commission

The agent’s commission is the biggest chunk of the cost you need to pay. However, it’s negotiable and typically paid from the proceeds of your house sale. Likewise, don’t forget to contact your agent to negotiate the fees. In total, you are expected to pay the Tennessee real estate agent commission rate that ranges from 4% to 6% (listing agent commission + buyer’s agent commission which costs 2% to 3% of the total sales price).

If you want to avoid paying hefty commissions, you can list your property for a flat fee or with no commission at all! Choosing TN FSBO (For Sale by Owner) and listing your home with the best Flat Fee MLS companies in Tennessee can help you save more money. What’s more, you have to pay zero commissions if your buyer has no agent.

» Discount Real Estate Brokers Tennessee: The best of both worlds! Opt for full-service discount realtors in Tennessee at a lower commission.

16. Recording Fee

A recording fee is paid to the local government to register the change in ownership of a house or sale of a property in the public record. It also records mortgages and other liens against the house. The recording fee in the state of Tennessee is usually paid by the seller. However, you can negotiate it with the buyer.

17. Settlement Fee

Settlement fee is the compensation paid to a settlement agent for their closing services. A settlement agent is a third-party intermediary who helps you and the buyer complete the transaction. They clear the house for sale and transfer the ownership to the buyer and the respective funds to you.

The law in Tenessee does not mandate the presence of an attorney at closing. In the state, a real estate deal can be closed by an escrow agent, a title agency, or an attorney.

18. Tennessee Real Estate Transfer Tax

Transfer tax is levied to transfer ownership of the house from the seller to the owner. The tax amount is based on the value of the property. The transfer tax in Tennessee is 0.37% of teh property tax.

Depending on the negotiations, the transfer tax can be paid by either seller or buyer. In some cases, the tax is split between the parties.

19. Utility Bills

You must pay all utility bills till the date of purchase of the house. The title company usually checks for unpaid bills and utility liens. If there are any dues, you must clear them at closing.

20. Additional Certificates

Some towns in Tennessee require additional certificates such as the following:

  • Certificate of Occupancy:This is a verification that the property is suitable for occupancy and that it complies with all housing and building codes.          
  • Smoke Detector Certificate/Carbon Monoxide Certificate: These documents certify that the property is equipped with smoke and/or carbon monoxide detectors and that these detectors are functioning.

Tennessee Closing Costs Calculator

Closing costs vary heavily according to location and mortgage rates. Houzeo’s Closing Costs Calculator is a free tool that factors in these elements to help you calculate closing costs. It shows the user a detailed list of itemized costs and highlights junk costs that can be avoided.

Houzeo’s Home Sale Calculator helps calculate closing costs for sellers with a swish and a click! All the sellers have to do is enter their property location, home sale price, mortgage payoff, seller agent commission, and buyer agent commission, and voila!

» Estimate Seller Closing Costs Calculator Tennessee: Check your closing costs now!

How Should I Prepare for My Tennessee Home Closing?

Your closing agent will schedule a date for your closing. They will also speak with third-parties like HOA, Tennessee home inspector, and buyer agents. Here’s how to prepare for your closing day.

1. Review your closing documents in advance

Closing documents should generally be available to you in advance of the scheduled closing date. Review these documents at length and understand their provisions. Here are some key documents you’ll likely sign at closing:

  • The HUD-1 or Closing Disclosure: Most Tennessee homes are purchased with a mortgage. If this is the case on your transaction, you’ll get the Closing Disclosure summarizing the costs in detail. If your transaction is all cash, you may get the HUD-1, although this is less common. These documents detail amounts you’re being charged for, your loan payoffs if any, and the net proceeds you will take to the bank. Remember, depending on how much equity you have in the property, you might be asked to bring a check (or send a wire) on the closing date. Ensure there are no typos in your name, address, property address, bank info, and other details. Then review every amount and the totals to ensure there are no mathematical errors or inadvertent costs. You’ll be surprised how many times these documents have errors – this is one of the reasons our founder launched Houzeo.

» Tennessee Sellers Disclosure NoticeTake an in-depth look at the seller disclosure requirements in Texas.

  • The Deed: This document enables the legal transfer of title from the seller to the buyer. Read this document carefully, verifying all details, including the legal description of the property, the deed book, deed book page, and the Property Identification Number (PIN), if any. We know of a case where a Seller sold a $94,000 property, but the deed also legally transferred over the Seller’s 5 other homes worth $680,000 over to the Buyer. There was a huge scramble post-closing to correct this mistake. It could have been a nightmare for the Seller if the Buyer didn’t honestly transfer the rest of the properties back to the Seller.
  • Statement of Closing Costs: This statement summarizes all the expenses involved in the transaction, including the title search and the title insurance premium. Typically, the buyer will pay the insurance premium, while the other fee could be negotiated with both the buyer and seller. You’ll get the estimated fee once you’ve chosen a title company.
  • Title Insurance: Allows you to state that you have the right to sell the property. It offers legal protection to the buyer in case there is a home title dispute, or some issues existing with the title. Normally, the buyer is responsible for this fee.

2. Ask Questions

If this is your first time selling a house in Tennessee, schedule an appointment with the closing agent before the date of the closing. Prior to that appointment, do your research and ask clarifying questions on anything you have doubts about.

3. Bring TWO Forms of Official ID

There will likely be a licensed notary involved who’ll require that you swear you are who you say you are. Take a valid driver’s license or passport for ID. Carry a secondary ID as well, just in case.

Now you’re ready! You might’ve heard horror stories of people being blindsided by high seller closing costs in Tennessee – but that’s often the result of not preparing and educating themselves ahead of time. If you are a Houzeo For Sale By Owner Seller in Tennessee, we want you to be one of the most educated home sellers out there. Next step, log on to and list your home for sale by owner. You’ll be in full control of your listing and save thousands in the process!


When you’re thinking about how to sell your home in Tennessee, you will have to deal with all kinds of closing costs. If you don’t understand the seller closing costs in Texas, you may end up spending more than you need to. It is best to account for the closing cost percentage in Tennessee before determining the listing price.

If you have not begun your real estate journey yet, opt for Houzeo., a tech company, provides an unbeatable combination of maximum savings, cutting-edge technology, and 5-star customer support.

With its 100% virtual service, it helps home sellers list their properties without any hassle from the comfort of their homes, while also allowing home buyers to explore properties and make offers online.

Houzeo’s customer-centric approach, advanced technology, and flat fee packages make it an ideal choice for those looking to avoid paying high commissions and closing costs in Tennessee.

Frequently Asked Questions

1. Who pays for title insurance in Tennessee?

The seller usually pays for title insurance in Tennessee. Buyers who opt for pays for a mortgage pay lender's title insurance.

2. How long does a closing take in Tennessee?

It usually takes 30 days to9 close on a house in Tennessee.

3. Can a seller accept another offer while under contract?

No. Sellers can only withdraw from an offer before the contracts have been exchanged.

Note: This is only a quick guide for all the sellers in Tennessee. Despite most information readily available online, seeking expert advice helps progress the process of selling a home.

Selling a House in Tennessee: Everything You Need to Know

Additional Resources

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