Average closing costs in Tennessee

Buying a home is a major financial step, and understanding all associated costs — including closing costs — can help you feel prepared and confident. These expenses cover the services, paperwork, and legal steps required to complete a home purchase. In Tennessee, both buyers and sellers share these costs, and the total amount depends on the home, the loan, and local requirements. Learning more about closing costs can help you budget and plan ahead.

Key takeaways:

• Closing costs in Tennessee average about 3.63% of the home’s purchase price for buyers.
• Common buyer expenses include loan origination fees, home inspections, appraisals, and title insurance.
• Seller expenses often include real estate agent commissions, prorated property taxes, title-related fees, and deed preparation.
• Many fees—such as lender charges, title services, and certain third-party costs—can be compared or negotiated to help lower your total closing expenses.

How much are closing costs in Tennessee?

With the median home sale price around $393,700, a buyer in Tennessee can expect to pay roughly $14,750 in closing costs, which equals about 3.63% of the home’s purchase price. These costs include a variety of fees — such as lender charges, title insurance, appraisal costs, escrow services, and taxes — that buyers and sellers both contribute to at the end of the transaction.

Closing costs can also vary by location within the state due to differences in local taxes, recording fees, and service providers. Buyers should factor in these regional differences when estimating their total up-front expenses.

What affects closing costs in Tennessee?

Several factors can influence how much you’ll pay in closing costs in Tennessee, including:

• Where you’re buying: Recording fees, insurance rates, and local taxes can vary by city or county.
• The home’s price: Fees tied to the sale price increase as the home’s cost rises.
• Your loan type: FHA, VA, USDA, and conventional loans each come with different fees, insurance requirements, and down payment rules.
• Title and escrow services: Costs vary based on the provider and the complexity of the title search.
• Taxes and recording fees: Local transfer taxes, prorated property taxes, and recording charges differ by municipality.
• Prepaid costs: Up-front payments for homeowners insurance, prepaid interest, and escrowed taxes.

Understanding how these elements work together gives Tennessee buyers a clearer picture of their total cash to close and helps them plan with confidence.

Are closing costs in Tennessee above average?

Nationally, closing costs typically range from about 0.4% to 3% of a home’s purchase price. Based on the Lodestar’s average national sales price of $438,236, typical national closing costs can fall between roughly $1,750 and $13,150. With an average buyer closing cost of 3.63%, Tennessee sits closely above this range.

Overall, Tennessee’s closing costs align closely with national expectations. To better understand what happens during the final stages of a home purchase, explore what happens when closing on a house and learn how transfer taxes can affect your final costs.

What do Tennessee’s closing costs include?

Closing costs in Tennessee include a range of fees and services required to complete a home purchase. Some costs are tied directly to the mortgage and lender, while others cover inspections, insurance, and the administrative steps needed to legally transfer ownership. Understanding what each fee covers can help buyers plan ahead and avoid surprises at closing.

• Lender-related fees: Application, origination, underwriting, and credit check fees. Some loans may also include charges related to a mortgage rate lock.
• Appraisal fees: Required to confirm the home’s market value; learn more about the process in home appraisal.
• Home and pest inspection fees: Covers inspections for structural issues, safety concerns, and pests. Use a home inspection checklist to understand what’s typically evaluated.
• Title search and insurance: Verifies ownership history and protects the buyer and lender from title disputes or liens. Learn more about title insurance.
• Survey fees: Confirms property boundaries and easements, often required for rural or irregular lots.
• Courier and recording fees: Covers transporting documents and officially filing the deed and mortgage with the county.
• Notary fees: Ensures closing documents are properly signed and legally verified.
• Prepaid items: Up-front payments for property taxes, homeowners insurance, prepaid interest, and homeowners insurance dues (if applicable).
• Private mortgage insurance (PMI): Required for loans with less than 20% down to protect the lender.
• Attorney fees: Paid if legal review or representation is needed during closing.
• Mortgage discount points: Optional up-front payments used to lower your interest rate. Learn more about mortgage points.

Each of these costs plays a role in ensuring the transaction is accurate and legally sound. Reviewing your Loan Estimate and Closing Disclosure helps clarify exactly what you’re paying for and why.

Who pays closing costs in Tennessee?

Both buyers and sellers in Tennessee are responsible for certain closing costs. While there are common expectations for who pays which fees, these are general guidelines and some costs may be negotiated as part of the purchase agreement.

Closing costs for buyers

Buyers in Tennessee typically pay most lender- and property-related fees. These costs are tied to the mortgage process and help ensure the home is properly valued, insured, and legally transferred. Common buyer closing costs in Tennessee include:

• Loan application and origination fees
• Home appraisal and inspection
• Title search and lender’s title insurance
• Prepaid expenses
• Recording and notary fees
• Attorney fees (if used)
• Mortgage discount points

Each of these expenses helps protect both the buyer and the lender by confirming the property’s value and legal status. Planning ahead for these costs can help buyers stay on budget. For more guidance on preparing for upfront expenses, see first-time home buyer expenses to save for.

Closing costs for sellers

Sellers in Tennessee also pay several closing costs, some of which overlap with buyer expenses, such as title and recording fees. In most cases, the seller’s largest expense is the real estate agent commission (which is fully negotiable), though additional prorated and payoff costs may apply. Common seller closing costs in Tennessee include:

• Real estate agent commissions
• Owner’s title insurance and title-related fees
• Prorated property taxes and HOA fees
• Deed preparation and recording fees
• Attorney fees (if used)
• Outstanding mortgages and liens
• Seller concessions

Sellers can learn more about how an existing mortgage affects a home sale in can you sell a house with a mortgage.

How to reduce your closing costs in Tennessee

While some closing costs in Tennessee — such as title insurance, recording fees, property taxes, and prepaid interest — are fixed and nonnegotiable, others can be reduced with the right strategy. Buyers who plan ahead may be able to save hundreds or even thousands of dollars by comparing options and taking advantage of available programs.

• Research home buyer assistance programs: Tennessee offers several programs designed to make homeownership more accessible. The Tennessee Housing Development Agency (THDA) provides down payment and closing cost assistance programs for eligible buyers. In some rural areas, USDA Rural Development loans may also be available, offering low or no down payment options that can reduce overall upfront costs.
• Shop around for a lender: Lender fees can vary significantly. Comparing multiple loan offers can help you find lower origination or processing costs. Learn more about how to choose a mortgage lender to get the best deal.
• Negotiate seller concessions: In certain markets, sellers may agree to cover part of a buyer’s closing costs through a seller credit. Learn how this works in seller concessions.
• Consider a no-closing-cost mortgage: Some lenders offer no-closing-cost mortgage options that roll fees into the loan balance or slightly increase the interest rate, allowing buyers to pay less upfront. Learn more in no-closing-cost mortgage.

Although not every fee can be adjusted, understanding which closing costs are negotiable can help Tennessee buyers focus on areas where savings are possible.

FAQ on closing costs in Tennessee

Does Tennessee require paying for a real estate attorney?

No, Tennessee doesn’t require buyers or sellers to hire a real estate attorney. Most transactions are handled by real estate agents, title companies, and escrow professionals who manage the paperwork and legal details. Some buyers and sellers still choose to hire an attorney for added peace of mind in complex situations. Learn more about when hiring a real estate attorney may be helpful.

When do Tennessee buyers find out their closing costs?

Buyers in Tennessee receive an estimate of their closing costs early in the loan process. Lenders provide a Loan Estimate within three business days of application, outlining expected fees and taxes. At least three days before closing, buyers receive a Closing Disclosure with final costs. Reviewing both helps avoid last-minute surprises.

When and how will I pay my Tennessee closing costs?

In Tennessee, closing costs are usually paid on closing day when the property officially transfers ownership. Most buyers pay by cashier’s check or wire transfer to the title or escrow company. The exact amount and payment instructions are shared in advance in your Closing Disclosure. Learn more about what to expect when it’s time to close on a house.

How can I save up for Tennessee’s closing costs?

Closing costs in Tennessee average about 3.63% of the home’s purchase price. Buyers can prepare by setting aside a portion of each paycheck, using tax refunds or bonuses, and exploring assistance programs offered through the Tennessee Housing Development Agency. For more tips, see how to save for a house.

Are Tennessee’s closing costs deductible on my taxes?

Most closing costs in Tennessee aren’t tax deductible, including title insurance, appraisal fees, and recording costs. However, mortgage interest paid up front and prorated property taxes may qualify for deductions in the year you buy your home. Homeowners who itemize may also benefit from ongoing deductions for mortgage interest and property taxes. Learn more in are closing costs tax deductible and tax deductions for homeowners, or refer to IRS Publication 530 and Tax Benefits for Homeowners.

The bottom line: Prepare your finances for Tennessee closing costs

Closing costs in Tennessee typically average around 3.63% of the home’s purchase price and include lender fees, title services, insurance, taxes, and recording costs. Both buyers and sellers share these expenses, though the exact amount can vary based on location, loan type, and negotiated terms. Understanding which costs apply to your situation — and which ones may be reduced — can help you budget more confidently. If you’re ready to buy a home in Tennessee, now’s the time to get preapproved and begin your mortgage application process.