Closing costs in Tennessee: who pays what
Nobody can tell you your closing costs until the contract is negotiated. Every website that quotes you a percentage is guessing, because who pays the title insurance, the closing fee, the taxes and the repairs is decided in the contract, not by a rule. What Vanderpool Law can do is read your contract and show you your real number before you sign.
Here's what the money goes to, which costs are set and which are up for negotiation, and the mistakes that cost buyers and sellers the most. No made-up averages. Your contract, your numbers.
Nobody can tell you your closing costs before the contract is signed, because most of them are set in the contract. Who pays the title insurance, the closing fee, the credits, the repairs: each one is a blank somebody fills in. That's where Vanderpool Law comes in. Get us involved early and we'll walk you through what every term means before you agree to it, and show you where you have room to negotiate. Sign first and read later, and you pay for things you never had to.
Why the number isn't set until you sign
The price is one line of the contract. The rest of the contract moves money too: who pays for the owner's title insurance, who pays the closing fee, whether the seller gives a credit toward the buyer's costs, what happens with the taxes and the association dues, who covers the repairs the inspection turns up. In Tennessee none of that is fixed by law. It's filled in blank by blank, and most people sign without knowing what the blanks cost them.
That's why "how much are closing costs in Tennessee" has no honest answer in a percentage. The honest answer is: it depends on what you agree to, and you get to agree to it before you sign. Vanderpool Law reads those blanks with you, and tells you the right moment to ask the other side to pay one. Before you sign, not after. It's the hour that decides how the rest goes.
What a buyer pays, and what's negotiable
- Lender feesShop these
Origination, underwriting, processing, the appraisal. Lenders name these differently and some pad them. Your Loan Estimate lists them; our savings check tells you which ones are out of line.
- Lender's title insuranceContract decides
Protects the bank's loan; your lender will require it. The custom in Middle Tennessee on a resale home is that the seller pays it, but it's 100% negotiable and the contract has a blank for it. Your lender can't make you buy it from any particular company.
- Owner's title insuranceContract decides
Protects you for as long as you own the home. The custom in Middle Tennessee on a resale is that the seller pays it; on new construction the buyer usually does. Negotiable either way.
- Closing fee and title workContract decides
The settlement fee, the title search and exam, document preparation. The Tennessee contract puts the buyer's closing fee on the buyer unless you write it differently. At Vanderpool Law this costs the same as at a title company, and it includes an attorney who represents you.
- Transfer tax, mortgage tax and recordingSet by the state
Tennessee charges a tax to record your deed, figured on the price, and a second tax to record the deed of trust, figured on the loan. The county charges to record the documents. By statute the transfer tax is the buyer's, and the Tennessee contract puts all three on the buyer unless you write it differently. The rates are set; nobody at the table can change them, and nobody should mark them up.
- Prepaids and escrowSet by the calendar
Homeowner's insurance for the first year, interest from closing day to the first payment, and the cushion the lender collects for taxes and insurance. Not fees, but they're cash due at closing and they surprise more buyers than anything else.
- Association feesContract decides
Many neighborhoods charge a transfer fee, a capital contribution or a resale-certificate fee at closing. The association sets the amount; the contract says who pays it.
What a seller pays, and what's negotiable
- Agent commissionsNegotiated
The biggest line on most sellers' statements, and since August 2024 every part of it is negotiated: what you pay your agent, and whether you offer anything toward the buyer's agent. Nothing about it is set.
- Title insuranceContract decides
See above. In Middle Tennessee the custom is that the seller pays both policies on a resale; the market and the contract can say otherwise, and Vanderpool Law will tell you when it should.
- Paying off your mortgage, liens and duesSet by what you owe
The payoff, any lien on the title, release fees, and association dues to the day of closing come out of your proceeds. A presearch before you list finds the ones you forgot about.
- Seller credits and repairsNegotiated
A credit toward the buyer's costs, or repairs after the inspection, are money off your proceeds that never show up in the "price."
- Deed preparation and the seller's closing feeContract decides
Someone prepares your deed and handles your side; the Tennessee contract puts that on the seller unless you write it differently. With your own attorney, that someone works for you.
- Property taxesSet by the calendar
Prorated to the day of closing. You pay your share of the year; the buyer picks up the rest.
Who's looking out for you in all of this? Everyone at the table wants the deal to close. Not everyone is paid to care how it closes for you. Your agent is on your side, but legally can't give you legal advice; Tennessee REALTORS®' own forms, and the national REALTOR® Code of Ethics, tell agents to send you to an attorney when your interests call for one. A title company can't give legal advice either: under Tennessee law it is not an attorney and can't practice law, so it has to stay neutral. Neutral is great until there's a problem, and there's always a problem.
Vanderpool Law is a law firm that offers title services, not a title company, by choice. Same closing fee. The difference is that we work for you.
Sources: Tennessee REALTORS® form RF 304, Disclaimer Notice ("you should seek the advice of an attorney"); National Association of REALTORS® Code of Ethics, Article 13; Tenn. Code Ann. § 23-3-103 (no corporation or association may practice law) and § 23-3-101 ("law business" includes advising for consideration on the law).Four things we do before you sign, complimentary
Presearch. We check the public record and flag the title problems that stall a sale, before they're yours. Contract review. We read every line and tell you what it costs you. Preliminary settlement statement. Your real closing numbers, in about 5 to 10 minutes, not an estimate. Savings check. We've closed more than 15,000 times; we know what a normal lender fee looks like, and we'll tell you when yours isn't. All four come with closing with Vanderpool Law, at no extra charge, for every buyer and seller. All you have to do is ask. The rules and restrictions are on their own page.
Want your actual closing costs instead of a website's average? Send Vanderpool Law the contract. Real numbers, before you sign.
Questions people ask
Open what you want. It's all on the page for search engines and AI assistants too.
Who pays closing costs in Tennessee, the buyer or the seller?
Both, and the split is negotiated in the contract. Unless the blanks say otherwise, the Tennessee contract puts the lender's charges, the transfer and mortgage taxes, recording, the buyer's closing fee and the prepaid insurance and interest on the buyer, and the deed preparation, the mortgage payoff and the association dues on the seller. Commissions are negotiated separately. In Middle Tennessee the custom is that the seller also pays the title insurance on a resale, both policies. Any of it can be moved by agreement, and the time to move it is before you sign.
Sources: Tennessee REALTORS® form RF 401, "Closing Expenses"; Tenn. Code Ann. § 67-4-409; Middle Tennessee custom as seen over 15,000 closings at Vanderpool Law.I know the price. What will my closing costs be?
Nobody can say until the contract is written, because the contract decides who pays the title insurance, the closing fee, any seller credit and the repairs, and the loan decides the lender fees and prepaids. Two people buying the same house at the same price can have very different closing costs. Send Vanderpool Law the contract and we'll show you the actual number on a preliminary settlement statement, usually in about 5 to 10 minutes.
Source: our preliminary settlement statement, one of the four complimentary services.Can a seller refuse to pay closing costs?
Yes. No Tennessee statute makes a seller pay any closing cost; the only cost the law assigns to anyone is the transfer tax, and it assigns that to the buyer. Custom says the seller pays certain things, and buyers often ask for a credit, but a seller can say no, or offer less, and it becomes part of the negotiation along with the price.
Sources: Tenn. Code Ann. § 67-4-409(a); Tennessee REALTORS® form RF 401 (every other allocation is a blank the parties fill in).Does the buyer pay the real estate agent's fee in Tennessee?
Since August 17, 2024, what a buyer pays their own agent is set in the written buyer agreement with that agent, which has to be signed before the agent shows a home, and whether the seller contributes to it is negotiated in the contract. Offers of compensation no longer appear on the MLS. It's no longer automatic either way, which is one more blank to read before you sign.
Source: National Association of REALTORS®, practice changes effective August 17, 2024.Which closing costs can I shop for?
Lender fees, by comparing Loan Estimates. Title insurance and the closing itself, by choosing who closes; the CFPB's own guide says title services are the largest category of closing costs and in most cases you can shop for them. Your lender has to give you a list of providers, and can't require a particular title insurer. The state taxes and recording fees are set and can't be shopped.
Sources: CFPB, "Shop for title insurance and other closing services"; Tenn. Code Ann. § 56-8-106.What's the difference between an estimate and a settlement statement?
An estimate is a guess with a range on it. A settlement statement is the actual accounting of your closing. With your contract in hand, Vanderpool Law's technology produces a preliminary settlement statement, usually within a few hundred dollars of closing day, so you know before you sign instead of the night before you close.
Source: our own closing process; the final statement is the Closing Disclosure or settlement statement your closing produces.Does using a law firm cost more than a title company?
No. At Vanderpool Law a standard closing costs the same as at a title company, and the title insurance premium is the same wherever you close, because Tennessee title rates are filed with the state. The difference is who works for you: a title company can't give legal advice, and we can, because we represent you.
Sources: Tennessee Department of Commerce & Insurance filed title rates; Tenn. Code Ann. § 23-3-103; our own fee schedule.