Tennessee closing costs for buyers and sellers

Closing costs are the third number in a home purchase, and the one people meet last. The price is what you pay for the house; the down payment is the part of it you pay in cash. Closing costs are everything else due on the day the deal is recorded — taxes, lender charges, title work, prepaid items and recording fees. This page defines them, separates what Tennessee fixes by law from what is negotiated, and prints no fee it has not read from an official source.

1. Three separate numbers

Keep them apart on paper. Transaction costs are charged by third parties — the state, the county, the lender, the title provider, the insurer — and a larger down payment does not shrink the recording fee.

The seller has a fourth number buyers never see: net proceeds — price minus payoff, costs and prorations. Its sequence is on selling a home in Tennessee.

2. The two Tennessee taxes, and who the statute charges

Tennessee's recordation tax is, in the Department of Revenue's words, a tax on two separate privileges: realty transfer tax and mortgage tax. The first falls on transfers of real property, with exceptions, when the deed is recorded; the second on instruments evidencing indebtedness, such as mortgages and deeds of trust. Both are collected by the county register of deeds and remitted to the Department.

The state also says who pays: the realty transfer tax by the grantee or transferee — the buyer — and the mortgage tax by the debtor. In many states transfer tax is customarily a seller's cost. Here it is not.

The rates are in Tenn. Code Ann. § 67-4-409: thirty-seven cents per one hundred dollars on transfers of realty, based on the consideration or the value of the property, whichever is greater; and eleven and one-half cents on each one hundred dollars of indebtedness, with the first two thousand dollars exempt. The Department of Revenue publishes the same two figures on its own recordation tax due date and rates page — "$0.37 per $100 of purchase price for the realty transfer" and "$0.115 per $100 of indebtedness", with "the first $2,000 of the debt… exempt from taxation" — so the statute and the administering department agree. The Knox County Register of Deeds fee schedule publishes both rates, notes that recording fees are set by Tennessee statute, and lists the register's fee as $12.00 for a document of up to two pages, $5.00 for each additional page, and a $1.00 data processing fee on each taxable document. Confirm those against your own county's register: recording is a county function, and the county, not the city, decides which office you use.

3. Buyer worksheet

Build cash-to-close as four blocks.

• Taxes and recording. The two statutory taxes above, plus the register's per-page fees — calculable exactly once you know the price and the loan amount.
• Lender charges. Origination, underwriting, credit report, appraisal and any discount points, all quoted to you in writing. Some attached services you may shop for separately, and your lender must give you a written list of providers for those.
• Title work. A title search and examination, the lender's policy, and an owner's policy if you want one. No title policy may be issued in Tennessee until the company has caused a reasonable search and examination of the title, under Tenn. Code Ann. § 56-35-129. A lender's policy protects the amount lent; an owner's policy, the Consumer Financial Protection Bureau explains, is optional and covers a claim arising from before you bought.
• Prepaids and escrow. First-year insurance, interest to month end, and the reserve your lender collects toward future tax and insurance bills. Not fees — your own future costs, collected early, and driven by Tennessee property taxes.

Under section 9 of the Real Estate Settlement Procedures Act, 12 U.S.C. § 2608, a seller cannot require a buyer using a federally related mortgage loan to buy title insurance from a particular company, and is liable for three times the charges if they do. On a first purchase, the programmes that change these numbers are on first-time homebuyers in Tennessee.

4. Seller worksheet

A seller's ledger runs the other way: start at the price and subtract.

• Mortgage payoff. A dated statement, including interest to the projected closing date and the fee to record the release. Re-order if closing moves.
• Brokerage compensation. What your listing agreement says, plus any contribution to the buyer's agent written into the contract. Since 17 August 2024 that contribution cannot be advertised through a multiple listing service. It is not set by law and it is not standard.
• Prorations. Property taxes, and association dues where they exist, split at the closing date according to the contract.
• Credits and repairs. Whatever you conceded after the inspection, as a closing credit or as work paid for beforehand.
• Closing and document charges. The settlement agent's fee for the part attributable to you, and preparation of the deed.

5. What is fixed, and what is only an agreement

Three things here are not negotiable: the two statutory rates, their assignment to the grantee and the debtor, and the register's published fees. Everything else is an agreement — who pays the settlement agent, whether the seller contributes toward the buyer's costs, how taxes are prorated. When someone says the seller always pays a particular item, ask where in the contract that is written. If you are running both sides at once, the ledgers interact: see buying and selling a home at the same time.

6. Compare your estimate with the closing documents

With a mortgage you get two documents built for this comparison. The Loan Estimate sets out estimated closing costs and marks which services you may shop for. The Closing Disclosure gives the final figures, and the lender must provide it three business days before the scheduled closing — a window for checking it. The Consumer Financial Protection Bureau's guide lists the fields that should match: loan amount, rate, term, product, payment and closing costs. Ask about anything that moved before closing day.

7. A worked example, with its assumptions stated

The two taxes are the only items here that can be calculated exactly, so the example calculates them and leaves the rest blank on purpose. These figures are arithmetic, not a market estimate: a round hypothetical price chosen for legibility, not a claim about what anything costs anywhere in Tennessee. Rates read on 25 September 2026 from Tenn. Code Ann. § 67-4-409 and the Knox County schedule. Assumptions: price $300,000, mortgage $240,000, deed of two pages.

Item	How it is calculated	Amount	Statute charges it to
Realty transfer tax	$300,000 ÷ 100 = 3,000, × $0.37	$1,110.00	Grantee (buyer)
Mortgage tax	($240,000 − $2,000) ÷ 100 = 2,380, × $0.115	$273.70	Debtor (borrower)
Register's fee, deed	$12.00 up to two pages, plus $1.00 data processing	$13.00	Presenter of the document
Deed of trust recording	$12.00 for two pages, $5.00 each additional, plus $1.00	Depends on page count	Borrower's side

Two cautions. Transfer tax is charged on the consideration or the value, whichever is greater, so a bargain sale between relatives is not taxed on the bargain. And Knox County is the schedule this page read; which county serves your address is not always obvious from the city name, as the Memphis home and area guide shows. The purchase sequence these costs attach to is on buying a home in Tennessee.

8. The fill-in worksheet: every line, and who holds the figure

This is the table to work through by hand, one candidate transaction at a time. The third column is deliberately empty and the fourth is the reason: every figure here that is not fixed by statute is quoted by a named person, and a plausible default is exactly what makes a worksheet lie to you. Fill the third column only from the fourth, and leave a line blank for as long as nobody has answered it.

Line	Charged to	Your figure	Who to ask for the real one
Realty transfer tax	Grantee — the buyer — by statute		Nobody: arithmetic. The statutory rate in section 2, on the consideration or the value, whichever is greater.
Mortgage tax	Debtor, by statute		Nobody: arithmetic. The statutory rate in section 2, on the indebtedness after the exempt first slice.
Recording fees, deed and deed of trust	Whoever presents the document, unless the contract moves it		Your county register of deeds: the published fee schedule, against your actual page count.
Lender charges: origination, underwriting, credit report, points	Borrower		The Loan Estimate from each lender you asked, compared like for like.
Appraisal	Borrower; ordered by the lender		The lender, in writing, before you authorise it.
Title search and examination	By contract		The title or settlement company you choose; on a federally related loan that choice is yours, under RESPA section 9 above.
Lender's title policy, and an owner's policy if you want one	Lender's policy required by the lender; owner's policy optional		The same company, as two separate figures, so you can see what the second adds.
Settlement agent's fee and document preparation	By contract		The settlement agent, before you engage them.
Survey	By contract; sometimes required by the lender		A licensed Tennessee surveyor, and the lender on whether it is required.
Inspections: home, wood-destroying insects, septic, well	Whoever orders them, usually paid before closing rather than at it		Each inspector's own fee schedule.
First-year insurance premium	Borrower		Your insurer's bound quote for that address, not a general estimate.
Prepaid interest to the end of the month	Borrower		The lender, once the closing date is fixed.
Escrow reserves for tax and insurance	Borrower		The lender's initial escrow statement; the tax input from the county record.
Property tax proration	Split at the closing date as the contract directs		The settlement agent, working from the county tax record.
Association dues and any transfer charge	By contract		The association or its manager, in writing.
Brokerage compensation, including any contribution to the buyer's agent	Whatever the listing agreement and the contract say; not set by law		Your own signed agreement first, then the contract.
Mortgage payoff and recording the release	Seller		A dated payoff statement from the servicer, good through the closing date.
Repair credits and concessions	By contract		The contract, as it stands after the inspection response.

Only the first two lines can be finished without asking anyone, and that is the shape of the whole page: two statutory figures, and a set of quotes from named people. Where the second column says "by contract", this site has not established a Tennessee custom for that line and will not invent one — the answer is whatever your contract says, which you can still change while it is being written. If a figure reaches you that does not trace back to the fourth column, ask where it came from before you wire against it.