How Much Are Closing Costs in Tennessee?
Wondering how much are closing costs in Tennessee? Here is the quick answer: most Tennessee buyers pay between 2% and 5% of the purchase price in closing costs, and Rocket Mortgage puts the Tennessee average at about 3.63%. With the statewide median sale price at about $380,000 as of August 2026, that works out to roughly $7,600 to $19,000 on a typical home purchase.
This guide covers both sides of the deal, whether you are buying your first home in Middle Tennessee or selling and moving up. We will walk through every fee line by line and explain who pays closing costs in Tennessee, with the negotiating room flagged along the way.
These fees matter because they are due in cash at the closing table, on top of your down payment. Budgeting for them early keeps your home purchase on track and prevents last minute surprises.
What Are Closing Costs?
Closing costs are the one time fees paid to finalize a real estate transaction. They cover the legal and administrative work required to transfer a property from the seller to the new owner.
They come from several sources: your lender, the title company, the county, and third party providers such as appraisers and inspectors. None are part of the home’s sale price, which is why buyers overlook them.
The down payment goes toward the home itself. Closing costs pay everyone who makes the transfer legal and secure.
Tennessee lets title companies and licensed settlement agents run residential closings, so attorney fees stay off most settlement statements here.
Average Closing Costs in Tennessee: The Full Breakdown
Average closing costs are a percentage, so your dollar total scales with the home’s purchase price. Costs climb with price: on a $400,000 home, buyer closing costs typically range from $8,000 to $20,000. The breakdown below shows where that money goes.
Lender Fees and Loan Origination Fees
Lender fees are the largest bucket for most buyers. Loan origination fees usually run 0.5% to 1% of the loan amount and cover underwriting and processing, with the 2025 median landing near 0.8%.
Some lender charges are flat, while other lender related fees scale with the size of your mortgage. Mortgage discount points are optional: you pay more upfront in exchange for a lower interest rate across your loan term.
On a $320,000 loan, that puts loan origination somewhere around $1,600 to $3,200 before points.
Appraisal Fee and Credit Report Fee
The appraisal fee typically costs $400 to $850 in Tennessee, with Nashville area appraisals averaging close to $610. Your lender orders it to confirm the home is worth the loan amount you are borrowing, and larger acreage costs more.
The credit report fee is smaller, usually $25 to $85 per application and averaging around $50. Lenders pass it through from the credit bureaus, though tri-me
hvgallerani@gmail.com (1)rge pricing has climbed sharply in recent years.
Title Fees and Owner’s Title Insurance
Title services cover the title search and the settlement work your title company performs. The settlement or closing fee in Tennessee commonly sits near $495, and rises with the complexity of the transaction.
Title insurance is filed by each underwriter with the state and is priced in tiers. In Davidson County, the owner’s title insurance policy runs $6 per $1,000 on the first $100,000 of value, then $4.50 per $1,000 above that. Rutherford and Williamson use the same schedule. On a $400,000 home that is roughly $1,950, or about half of one percent of the purchase price.
The lender’s policy covers the bank’s interest in the property, and it costs a flat $35 in Tennessee when it is issued alongside the owner’s policy. The expensive policy is the optional one that protects you for as long as you own the home.
Who pays which policy is negotiable, though Tennessee custom has the seller paying for the owner’s title insurance and the buyer paying the lender’s policy.
Tennessee Taxes and Recording Fees at Closing
Tennessee charges a realty transfer tax of $0.37 per $100, applied to the greater of the sale price or the property’s value. On a $400,000 home that is $1,480. Unlike most states, Tennessee places this on the grantee, which means the buyer customarily pays it.
Tennessee also charges a recordation tax on indebtedness, usually called the mortgage tax, of $0.115 per $100 of the loan amount above the first $2,000. On a $320,000 mortgage that comes to about $366. Cash buyers skip this one entirely, since there is no deed of trust to record.
Recording fees pay the county to officially record the new deed and the deed of trust. Tennessee registers of deeds charge $10 for the first two pages of a document and $5 for each additional page. A $2 data processing fee is added to each document. Because a deed of trust runs far longer than a deed, most buyers see combined recording fees of roughly $100 to $160.
Prepaid Expenses: Property Taxes and Homeowners Insurance
Prepaids are your own future expenses collected early, which is why cash to close often surprises buyers.
Expect to prepay your first year of homeowners insurance plus several months of property taxes to open your escrow account. Tennessee property taxes are paid in arrears: in Davidson County, bills are mailed the first week of October for the current calendar year and are payable through the last day of February.
Because of that schedule, your title company will prorate the seller’s share of prorated property taxes through the closing date and credit it to you. Prepaid mortgage interest covers the days between closing and your first payment.
Home Inspection Fees
A general home inspection in Tennessee usually costs $400 to $475, with the state average near $425. You pay the inspector directly before closing, and skipping the inspection to save money is rarely worth the risk.
Specialty inspections add up separately. A termite inspection runs $75 to $375 and radon testing lands around $400. A septic inspection can reach $900. Budget for these even though they are billed early and paid upfront.
Estimated Closing Costs in Tennessee by Purchase Price
The table below shows estimated closing costs for buyers at the low and high end of the 2% to 5% range, plus the 3.63% Tennessee average. Treat it as a planning figure. Your Loan Estimate is the real quote.
| Purchase price | 2% (low end) | 3.63% (TN average) | 5% (high end) |
|---|---|---|---|
| $300,000 | $6,000 | $10,890 | $15,000 |
| $400,000 | $8,000 | $14,520 | $20,000 |
| $500,000 | $10,000 | $18,150 | $25,000 |
| $650,000 | $13,000 | $23,595 | $32,500 |
Nashville sits at the higher end of that table. The median sale price in Nashville was about $477,500 in August 2026, which puts typical buyer closing costs near $9,550 to $23,900.
Who Pays Closing Costs in Tennessee?
Both sides pay a share. The purchase contract, not state law, settles who pays closing costs for most individual line items.
Buyer’s Closing Costs in Tennessee
Buyers typically cover lender fees, the appraisal fee, the credit report fee, recording fees, the transfer tax, the mortgage tax, the lender’s title policy, and all prepaids. That is the 2% to 5% of the purchase price this guide focuses on.
Buyers pay these amounts in certified funds or by wire transfer on closing day, separately from the down payment.
Common Seller Closing Costs
Sellers in Tennessee pay an average of about 2.98% of the sale price in closing fees before agent compensation, covering items such as the settlement fee, the owner’s title policy, prorated property taxes, and any seller credits negotiated with the buyer.
Add real estate agent commissions, which are negotiable and set out in the listing agreement and have averaged about 5.6% statewide, and total seller closing costs land near 8.6% of the sale price. Our guide to how much it costs to sell a house in Tennessee breaks the seller side down in detail.
Mortgage Payoff and Net Proceeds
Your mortgage payoff lands on the same settlement statement as your closing costs, though it sits in a category of its own. The title company orders a payoff letter from your lender covering the remaining loan balance plus interest through the closing date.
All of it is deducted from your proceeds at closing, which is why a net sheet matters more than the sale price alone. Our home sale calculator estimates what you would walk away with.
Closing Costs vs. Down Payment: Budget for Both
Your down payment and your closing costs are separate cash needs, and both are due on the same day. A buyer putting 5% down on a $400,000 home needs $20,000 for the down payment plus roughly $8,000 to $20,000 in estimated closing costs.
A larger down payment lowers your loan amount, which trims percentage based fees and reduces the mortgage tax. Cross 20% down on a conventional loan and you also drop private mortgage insurance. Just do not drain your savings to zero, because lenders like to see reserves after closing.
Using a Closing Costs Calculator
An online closing costs calculator gives you a fast ballpark. Feed it a purchase price and a down payment and it estimates your total closing cost amount in seconds, and most let you set a loan type as well. Our affordability calculator and mortgage calculator cover the payment side of the same question.
The official version arrives after you apply for a mortgage. Your lender must send a Loan Estimate within three business days of receiving your application, listing your projected fees and buyer’s closing costs line by line, which makes it easy to compare loan options across lenders.
Figures shift a little between the Loan Estimate and closing day, though federal rules cap the movement. Transfer taxes and lender fees sit in the zero tolerance bucket and cannot rise at all, while recording fees and services you pick from the lender’s list can rise by up to 10% collectively. Anything escrowed, including prepaid interest and insurance premiums, can change without limit.
What Happens Before Your Closing Date?
Your closing date is set in the purchase contract, commonly 30 to 45 days after your offer is accepted. The final week is where the paperwork pays off.
At least three business days before closing, your lender sends the Closing Disclosure. This document shows your final loan terms alongside the exact cash you need to bring.
Compare the Closing Disclosure against your Loan Estimate and ask your lender to explain anything unexpected. On closing day you sign and send your funds by wire transfer or certified check. Then you collect your keys.
How to Lower Closing Costs in Tennessee
You have more leverage than you might think. These strategies save Tennessee buyers real money.
Compare Lenders and Ask About Lender Credits
Request Loan Estimates from at least three lenders. Fees vary more than most buyers expect, and the same loan amount can carry very different lender related fees.
Ask each lender about lender credits, where the lender covers part of your fees in exchange for a slightly higher interest rate. A lower rate comes with higher upfront costs and credits work the other way around, so the right balance depends on how long you plan to own the home.
Negotiate Seller Credits
Seller paid closing cost credits are a common and realistic ask, especially on homes with longer market time. Our guide to seller concessions explains how these credits are structured and what lenders allow.
Look Into Closing Cost Assistance Programs
The Tennessee Housing Development Agency offers closing cost assistance alongside its Great Choice Home Loan. The deferred option under Great Choice Plus is a second mortgage of $6,000 or $10,000 at 0% interest, forgiven at the end of ten years.
If you need more, an amortizing second runs up to 5% of the sale price capped at $15,000 over 30 years at your first mortgage rate, and newly built homes qualify for up to $25,000 at 0% over 15 years. THDA publishes the purchase price and household income limits, and those change periodically, so confirm current criteria with a participating lender.
Choose Your Closing Date Carefully
Closing late in the month reduces prepaid mortgage interest, since you pay per diem interest only from your closing date to the end of the month. It is a small lever, and it is free.
Do Not Forget Moving Costs
Your budget keeps working after closing. Moving costs and utility deposits land within days of getting the keys, along with whatever needs fixing in the first week.
Local movers in Middle Tennessee commonly charge a few hundred to a couple thousand dollars depending on distance and volume, so fold that into your plan early.
FAQ: Tennessee Closing Costs
Can closing costs be rolled into the mortgage?
On a standard home purchase, usually no. Seller credits and lender credits are the practical tools for reducing your out of pocket expenses at closing. Refinances are the common exception.
When are closing costs paid?
Almost everything is paid on closing day by wire transfer or certified check. The exceptions are the home inspection and sometimes the appraisal fee, which are paid upfront.
What percentage do buyers pay in closing costs?
Buyers in Tennessee typically pay 2% to 5% of the purchase price, with the state average near 3.63%. Cash buyers pay considerably less, because every lender driven line disappears, including the mortgage tax.
How much are closing fees in Tennessee on a $400,000 home?
Plan on roughly $8,000 to $20,000, or about $14,520 at the Tennessee average. The transfer tax alone is $1,480 at that price.
Ready to Buy or Sell in Middle Tennessee?
Bernie Gallerani Real Estate helps buyers and sellers across Nashville and Middle Tennessee plan for every dollar of a home purchase or sale. We line up local lending partners and negotiate for seller credits on your behalf, then keep the transaction moving on schedule.
Reach out today for a no pressure conversation about your budget or your net sheet.
This guide is for general information only. Fees, tax rates, program terms and market figures change, and they vary by county and by lender. Figures current as of October 2026. Ask your lender and title company for numbers specific to your transaction. Equal Housing Opportunity.