What Are Closing Costs in Tennessee?
Closing costs in Tennessee are the fees buyers and sellers pay when a real estate transaction closes. They are separate from the purchase price and come directly out of your cash at closing or your sale proceeds. Knowing what to expect on both sides prevents surprises at the closing table.
How Much Are Closing Costs in Tennessee?
Closing costs in Tennessee vary depending on whether you are the buyer or the seller, the purchase price, and the specific terms of your transaction. Buyers in Tennessee typically pay 2% to 5% of the purchase price in closing costs, covering loan-related fees, appraisal, title work, and prepaid items like insurance and property taxes. Sellers in Tennessee typically pay 2% to 8%, with real estate commissions making up the largest share of that range.
On a $490,000 home, close to the current Murfreesboro median, a buyer might pay $9,800 to $24,500 in closing costs in Tennessee at a standard 2% to 5% rate. A seller on the same transaction might pay $9,800 to $39,200, depending on the commission structure and any buyer credits negotiated into the contract.
Tennessee does not have a state income tax, but it does have a real estate transfer tax of $0.37 per $100 of the sale price, which the seller pays. On a $490,000 sale, that is $1,813. That fee is in addition to title work, the closing fee, and any HOA transfer fees that apply.
Full Seller Closing Costs Breakdown →Buyer and Seller Closing Costs in Tennessee
The tables below cover every typical line item for buyers and sellers in a Tennessee real estate transaction. Amounts vary by lender, title company, and transaction specifics.
Buyer Closing Costs in Tennessee
| Fee | Typical Amount | Notes |
|---|---|---|
| Loan Origination Fee | 0.5% to 1% of loan | Charged by the lender for processing the mortgage |
| Appraisal Fee | $500 to $800 | Required by the lender to confirm the home’s value |
| Credit Report Fee | $25 to $75 | Lender pulls your credit history as part of underwriting |
| Title Search Fee | 0.1% to 0.2% of purchase price | Confirms the seller has clear title to convey; scales with purchase price |
| Lender’s Title Insurance | 0.1% to 0.5% of loan amount | Protects the lender; required on financed purchases; scales with loan size |
| Owner’s Title Insurance | 0.3% to 0.5% of purchase price | Protects the buyer; highly recommended; sometimes seller-paid in TN; scales with purchase price |
| Closing / Settlement Fee | $400 to $900 | Paid to the title company managing the transaction |
| Recording Fees | $25 to $100 | County fee to record the deed and mortgage |
| Prepaid Homeowners Insurance | $1,500 to $3,500+ | Full year of insurance paid upfront at closing; varies significantly by home size, age, and coverage level |
| Prepaid Property Taxes | 2 to 6 months | Deposited into escrow based on closing date |
| Prepaid Interest | Varies | Interest from closing date to end of first mortgage month |
| Home Inspection | $450 to $900+ | Paid before closing; larger or older homes run higher; not technically a closing cost but expected in every transaction |
| Buyer Broker Fee | Negotiated | Buyers are responsible for their agent’s fee per the buyer representation agreement signed before touring. Buyers may ask the seller to cover this as a negotiated term of the offer, but sellers are not required to agree. |
| HOA Transfer / Move-In Fee | $200 to $1,200 | If the property is in an HOA; typically the buyer’s responsibility; amount set by the association |
Seller Closing Costs in Tennessee
| Fee | Typical Amount | Notes |
|---|---|---|
| Listing Brokerage Fee | 1% to 5% of sale price | Paid to your listing brokerage at closing |
| Buyer Broker Fee (if offered) | 0% to 3% of sale price | Sellers may offer to cover the buyer’s agent fee as a negotiated term; not required since the 2024 NAR settlement |
| Tennessee Transfer Tax | $0.37 per $100 | State tax on the transfer of property; seller pays |
| Owner’s Title Insurance | 0.3% to 0.5% of sale price | Seller typically pays in Tennessee transactions; scales with sale price |
| Closing / Settlement Fee | $400 to $900 | Paid to the title company handling closing |
| Recording Fees | $25 to $100 | County fee to record the deed transfer |
| Prorated Property Taxes | Varies | Your share of taxes from January 1 to closing date |
| Home Warranty (Optional) | $400 to $600 | Sometimes offered as a buyer incentive |
| Buyer Credits (If Negotiated) | Varies | Seller-paid closing cost assistance agreed to in the contract, including potentially the buyer’s agent fee |
What Closing Costs Look Like on a $490,000 Home in Murfreesboro TN
The example on the right shows estimated seller closing costs on a $490,000 sale, which is close to the current Murfreesboro median. Commission structure will vary. The transfer tax and title fees are consistent across most transactions at this price point.
For buyers, the biggest variables are the loan origination fee and how much of the property tax escrow the lender requires at closing. On a $490,000 purchase with 5% down, a buyer might bring $11,000 to $23,000 to closing, depending on lender and the time of year the transaction closes relative to the tax cycle.
The best way to see your actual numbers before you commit to a price or an offer is to run the numbers with us before you list or before you write. For sellers, the Clarifi net sheet gives you a real-time estimate of your proceeds at any sale price. For buyers, we walk through the loan estimate line by line before you go under contract.
What Happens After You Go Under Contract in Tennessee →Commission is negotiated and not shown. Contact the Turner Victory Team for a full net sheet estimate at your specific price point.
What Closing Costs in Tennessee Are Negotiable?
Not all closing costs in Tennessee are fixed. Some are set by the state or county and cannot be changed. Others are negotiated as part of the offer or the listing agreement. Understanding which is which helps you know where to focus your energy.
For buyers, the most common negotiation is seller-paid closing costs, where the seller agrees to credit a dollar amount toward the buyer’s closing costs as part of the purchase contract. This is especially common when a buyer is stretching on down payment and needs to limit cash due at closing. The credit reduces the seller’s net proceeds rather than the purchase price, which also affects the buyer’s loan-to-value ratio.
For sellers, the commission is the most negotiable line item. The transfer tax, title fees, and recording fees are largely fixed. HOA fees are set by the association. Prorated taxes are calculated by the closing date and cannot be avoided. What you can control is what you offer to the buyer’s agent, whether you offer a home warranty, and whether you agree to any buyer credits in negotiations.
Generally Negotiable
Real estate commission structure, buyer broker compensation, seller-paid closing cost credits, home warranty offering, and which title company handles the transaction are all subject to negotiation between buyer and seller or between seller and their listing agent.
Generally Fixed
Tennessee transfer tax ($0.37 per $100), county recording fees, prorated property taxes based on closing date, HOA transfer fees set by the association, and lender-required items like the appraisal and title insurance are set by law, by the lender, or by the HOA and cannot be negotiated away.
Buyer Broker Compensation Since the 2024 NAR Settlement
Buyers are now responsible for their real estate agent’s fee. Before touring any home listed in the MLS, buyers must sign a buyer representation agreement or a touring form that clearly states how much their agent is to be compensated and how. Buyers can ask the seller to cover that fee as a negotiated term of the offer, but sellers are under no obligation to agree. The Turner Victory Team walks every buyer through exactly how this works before any home is shown. See the CFPB closing cost guidance for a detailed breakdown of what appears on a Closing Disclosure.
Questions About Closing Costs in Tennessee
Selling? Get Your Net Sheet Before You List.
Know exactly what you will walk away with at any price point before your home hits the market. The Turner Victory Team runs a full net sheet estimate for every seller at no cost.
Learn About Selling Or call: 615-586-0900Buying? Know Your Cash to Close Before You Offer.
We walk every buyer through the full loan estimate and closing cost projection before they write an offer so there are no surprises at the closing table.
Learn About Buying Or call: 615-586-0900