Who Pays Closing Costs When Selling a House in Tennessee?

by Nik Shewmaker

Who pays closing costs when selling a house in Tennessee? In Tennessee, the seller and buyer each pay their own closing costs. Sellers typically pay their mortgage payoff, the agent compensation they agreed to, deed preparation, and their share of property taxes and HOA dues through the closing date. Buyers typically pay the state transfer tax, loan fees, and recording costs. Almost everything can be negotiated in the purchase contract.

Seller vs. Buyer Closing Costs in Tennessee

Cost	Who Usually Pays	Notes
Mortgage payoff and any liens	Seller	Paid from your sale proceeds
Listing agent compensation	Seller	Set in your listing agreement; negotiable
Buyer agent compensation	Negotiable	Seller may agree to pay or offer a concession
Deed preparation	Seller (customary)	Prepared by the closing attorney or title company
Prorated property taxes	Seller pays through the closing date	Tennessee taxes are paid in arrears, so sellers usually credit the buyer
Prorated HOA dues	Seller pays through the closing date	Plus any HOA payoff letter or transfer fees per the HOA
Title and settlement fees	Split per contract	Shown line by line on the settlement statement
Owner's title insurance	Per contract	Negotiable
State transfer tax ($0.37 per $100)	Buyer (customary)	Negotiable
Mortgage recording tax and recording fees	Buyer	Tied to the buyer's new loan and deed
Home warranty or repair credits	Optional / negotiated	Only if agreed in the contract

Customs vary by county and by contract, so the purchase agreement always controls. Your settlement statement will show every charge before you sign.

How Tennessee Property Tax Proration Works

Tennessee property taxes are billed in arrears, meaning this year's bill comes due after the year is mostly over. At closing, the seller usually credits the buyer for the days the seller owned the home this year, so the buyer can pay the full bill when it arrives. This credit lowers the seller's net proceeds, so it belongs on your net sheet.

How to Lower Your Closing Costs as a Seller

Price it right the first time. Homes that sit tend to attract bigger concession requests.
Handle repairs before listing. Fixing known issues up front can head off large repair credits after inspection.
Read every concession request closely. A higher price with a large credit can net you less than a lower, cleaner offer.
Ask for a net sheet on every offer. Comparing offers by net proceeds, not just price, shows which one actually puts more in your pocket.

Get Your Actual Number

Averages only go so far. Nik prepares a seller net sheet using your payoff, likely sale price, and local costs, so you know your bottom line before you list.

Frequently Asked Questions

Who pays closing costs when selling a house in Tennessee?

Both sides pay their own closing costs. Sellers usually pay their mortgage payoff, any agent compensation they agreed to, deed preparation, their share of prorated property taxes and HOA dues, and their part of the title and settlement fees. Buyers usually pay the state transfer tax, their loan costs, and recording fees.

Does the seller pay transfer tax in Tennessee?

Usually not. Tennessee's realty transfer tax is $0.37 per $100 of the sale price or value, whichever is greater, and it is customarily paid by the buyer. Like most terms, it can be negotiated in the contract.

Who pays for owner's title insurance in Tennessee?

It is set in the purchase contract and can be negotiated. Your agent and title company will show exactly who is paying for each title charge on the settlement statement before closing.

How much are seller closing costs in Tennessee?

It depends mostly on the agent compensation you agree to and any concessions you give the buyer, plus title and settlement fees and prorations. A net sheet based on your actual price and contract terms is the only reliable way to know your number.

Are real estate commissions negotiable in Tennessee?

Yes. Agent compensation has always been negotiable, and since the 2024 NAR settlement, how buyer agent compensation is handled is spelled out in written agreements and can be negotiated as part of each sale.

This article is general information, not legal or tax advice. Talk with your closing attorney or tax professional about your situation.

Talk With Nik

Nik Shewmaker is a REALTOR® with Real Broker who has closed 235+ homes and $125M+ in Middle Tennessee since 2014. If you are weighing a move or a sale, she is happy to talk it through, with no pressure.

Call or text: (615) 585-0022
Email: NashvillesNik@gmail.com
Website: nashvillesnik.com

It matters who you hire to represent you.