Tennessee Sellers: Prepare for These 11 Closing Costs

Selling your home is an exciting prospect, but many homeowners are surprised to learn just how expensive it is to finalize a sale. Sellers are on the hook for many closing costs that significantly impact their net proceeds when all is said and done.

Closing costs for sellers in Tennessee are usually around 7% of the sale. However, your total cost can vary depending on what specific factors are involved in your sale.

To help you get a clear idea of what you’ll owe in closing costs after selling your Tennessee home, HomeLight interviewed Nicholas Nicaud, a top real estate agent in Knoxville, who sells 6% more homes than his peers. With insight from an expert agent and hours of research, we put together this comprehensive guide to Tennessee closing costs.

Here's a breakdown of the closing costs in Tennessee
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Tennessee seller closing cost overview

Closing cost Average cost Seller responsibility
Mortgage Payoff $165,260 Yes
Property Taxes 0.68% of the sale price The amount the seller owes is prorated to the day of sale.
Loan reconveyance $125, according to Nicaud Yes
Loan reconveyance recording $12 plus $5 per page of paperwork Yes
Title company fees $325, according to Nicaud Yes
Agent commission Around 6% of the home’s sale price, according to Nicaud Yes
State transfer tax 0.37% of the home’s sale price Negotiable, but usually the buyer’s responsibility
HOA fees Varies by HOA The amount the seller owes is prorated to the day of sale.
Attorney fees $150-$350 per hour Only if applicable
Liens Varies Only if applicable
Buyer closing cost assistance 1.5% of the home’s sale price, according to Nicaud Negotiable

Tennessee sellers are on the hook for these closing costs

Some closing costs are more or less unavoidable. These are the costs that Tennessee sellers can expect to pay:

Mortgage payoff

To sell your home, you need to own the property outright. That means you’ll have to pay the remaining balance of your mortgage before the property can legally change hands. In Tennessee, the average mortgage debt is $165,260.

Usually, sellers will use the proceeds of their sale to cover this cost. Since mortgage payoff varies widely, we have not included this cost when calculating the total average closing cost percentage in Tennessee.

Property taxes

In Tennessee, property taxes are paid in arrears, meaning that your tax bill is charging for taxes on the previous year. Bills go out on October 1 and are due by the last day of February the following year.

If you close before your taxes are due, you’ll pay the buyer a prorated amount for the number of days you owned the property. If you’ve already paid, the buyer will credit you.

On average, Tennessee property taxes cost 0.68% of a home’s assessed value per year — one of the lowest average rates in the country. Property taxes are levied by local governments, so the amount you pay depends on where you live. For example, Williamson county charges 0.56% in property taxes while Decatur County charges 0.5%.

Loan reconveyance and recording

Mortgage companies typically charge a fee to close out your loan and record the release of their claim on your property with the state. Nicaud advises that Tennessee sellers can expect to pay around $125 to their mortgage company for a reconveyance.

Recording fee

On top of the reconveyance fee, the state charges a recording fee of $12 plus $5 for each additional page of paperwork. Nicaud tells us that the total recording fee usually totals around $60.

Title company fees

You’ll need to pay a title company to transfer your home’s title. Nicaud shares that title companies in Tennessee charge for several services, including wiring documents to the state and verifying that there are no liens on the property. Altogether, Nicaud advises that sellers can expect to pay around $325 in title company fees.

Real estate agent commission

Real estate agent commission is the single most expensive closing cost that sellers pay. According to Nicaud, real estate agent commissions in Tennessee usually cost sellers around 6% of their home’s sale price.

This figure might seem high, but a great real estate agent usually nets you more profit in the long run. HomeLight’s research shows that the top 5% of real estate agents sell homes for up to 10% higher prices, meaning that going with a great agent can net you more profit even with the commission taken into account.

To find a real estate agent with a proven history of success, use HomeLight’s free agent matching service. Just plug in your information, and we’ll put you in touch with three of the best agents in your area.

Fees for sellers for closing costs in Tennessee
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Sellers may also cover these closing costs

Some closing costs only apply to certain home sales. Here are some of the most common costs you may run into depending on your situation:

Title insurance

Nicaud advises that buyers will sometimes ask the seller for a title insurance policy. This insurance policy protects the buyer in case any legal issues arise with the property’s title.

Nicaud shares that the title insurance policy typically costs the seller around $500.

HOA fees

There are roughly 4,880 HOAs in Tennessee, and around 15% of homeowners belong to one. If you’re in an HOA, you’ll be responsible for covering any unpaid dues. Just like with property tax, you’ll pay the buyer a prorated amount for any outstanding dues and they’ll credit you for any dues you’ve prepaid.

Nicaud tells us that HOA dues in Tennessee vary widely, and can be as low as $100 per year to $600 per month.

Attorney fees

Unlike many other states, Tennessee does not require a real estate lawyer to handle home sales. However, in some home sale circumstances, it’s wise to partner with an attorney to protect your interests. In these cases, it’s always best to seek professional legal advice. Thumbtack reports that real estate attorneys usually charge $150 to $350 per hour.

Buyer closing cost assistance

Nicaud tells us that buyers usually pay around 3% in closing costs themselves and may ask sellers to help cover these fees during negotiations. According to Nicaud, if sellers offer closing cost assistance to buyers, it’s usually 1.5% of the sale price.

State transfer tax

The state of Tennessee charges a 0.37% transfer tax on home sales. This means that, for a $300,000 home, the state will charge $1,100 in taxes for the transaction. This cost can be paid by either the buyer or the seller but is normally the buyer’s responsibility. However, transfer taxes can be negotiated, and your buyer may ask for you to split the cost.


Liens are claims taken out on your property to ensure the payment of a debt. Liens are often incurred because of unpaid property taxes but can be taken out on your home for several other reasons.

Your title company will discover these liens when they conduct a title search, and you’ll need to pay them before you can sell your home. If possible, resolve liens before you list your home, as the National Association of Realtors reports that title issues account for 13% of delayed home sales.

Estimate your net proceeds after closing costs

If you’re thinking about selling your home, you’re probably wondering how much money you’ll make off the sale at the end of the day. To get an estimate of how much money you’ll walk away with, use HomeLight’s Net Proceeds Calculator. After answering a few questions about your property, we’ll give you an accurate estimate of your net proceeds, as well as what you’re likely to pay in closing costs.

You will receive a settlement statement for closing costs in Tennessee
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You’ll receive a final tally near the end of your sale

Before you sign off on the final documents of your home sale, you’ll receive a settlement statement. This statement is a comprehensive, itemized list of all the costs involved in the sale, including what costs you’re expected to cover. Go over this document carefully, and if there’s anything that doesn’t make sense, contact your real estate agent for help.

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