8 min read Jan 11, 2020

What Are the Seller Closing Costs in Tennessee?

seller closing costs in Tennessee

How Much are Typical Seller Closing Costs in Tennessee

According to Zillow, the median home in TN sold for $185,922. Here’s how you can save approximately $5,577 in commissions on an average TN home by selling it For Sale By Owner on Houzeo.com

Congratulations! You’ve made it to the final process of home-selling. Closing on a home can be one of the most exciting moments as a seller, but it can also be stressful alone if you aren’t prepared. Tennessee is an expensive state when it comes to closing costs. Several regulations also make it a tedious state.

As a Houzeo For Sale By Owner (FSBO) seller, we expect you to go to your closing prepared. Our comprehensive Tennessee Home Seller Guide will help you accomplish exactly that.

4 min video: Learn How to Submit & Review Offers on Houzeo

In this section, we’ll discuss the key documents and expenses you need to be aware of when closing on a home in Tennessee.

What Are the Different Home Seller Closing Costs in Tennessee?

Here are the typical closing costs in Tennessee:

1.Mortgage Payoff: This is any remaining balance, or prepayment penalty, on your property at closing. This is the most likely biggest item on your list of fees. This includes the recording fee, principal balance, interest accrued from the last payment to the day of closing, and any penalty that the lender might charge you.

2. Real Estate Broker Commissions: In Tennessee, the expected commission would be around 6% typically asked for by listing agent and the other half to the buyer’s agent. In a 6% total commission, the listing broker is paid for 3% and the other 3% is given to the buyer’s agents. Although this fee varies greatly with the level of work or service. If you’re selling FSBO via Houzeo, congratulations… You’ve likely saved thousands by paying $0 in listing agent commission! Go on. Pop a bottle of the finest Champagne or Scotch. You deserve it.

3. State, County, and City Transfer Taxes or Stamps: This fee is charged for transferring your own property title to the new owner. In Tennessee, they charge a rate of around $0.37 per $100 of the sale price.

4. Attorney and Escrow Closing Fees: Varies entirely of the amount of work and what type of home is being sold, the cost would charge somewhere between $450 and $650 to closing a house.

5. Water Inspection: As a seller, it is important that you make sure the water has been tested before the turnover of your property. In Tennessee, it could cost around $300 to $500 depending on the issue or the system.

6. Termite Inspection: Since wood-destroying insects are common in the state, you have to do a pest inspection which costs around $75 to $175.

7. 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.

8. Tennessee Mortgage Tax: Officially called the Tennessee recordation tax, it imposes a fee on all transfers of real property recorded. This could cost $0.115 per $100 of the amount borrowed.

9. Survey: Usually charge between $350 to $500, it could be requested by the buyer’s lender that may depend on the property. However, in Tennessee, the seller could use a survey affidavit for proof of unchanged property boundaries—an alternative choice that typically costs $50.  

10. HOA Dues, Document Fees, and Transfer Fees: (HOA Fees could cost with a range from $!500 to $500 a month) If the property falls under a Homeowners Association, you may be subject to various other charges. These include HOA dues, a document fee at the beginning of Escrow, and a transfer fee at the end of Escrow.

How Should I Prepare for My Tennessee Home Closing?

Your closing agent will schedule a date for your closing. 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 upon 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.
seller closing costs in tennessee
  • 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 disputes, 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 property, 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 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 Houzeo.com and list your home for sale by owner. You’ll be in full control of your listing, and save thousands in the process!

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.

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Closing Flat Fee MLS For Sale By Owner Sellers Guide States Tennessee

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