Closing Costs in Tennessee
The average closing cost in Tennessee is $14,751, which is 4.4% of the home price. Tennessee's transfer tax rate is $0.37 per $100.
Tennessee's closing costs include a state transfer tax of $0.37 per $100 (0.37%) plus a county indebtedness tax of $0.115 per $100 on the mortgage amount. The transfer tax is typically paid by the seller by custom, though this is negotiable. Tennessee does not require an attorney at closing, keeping professional fees lower than in attorney states. Overall closing costs run 2-3% of the purchase price.
By BuyAHomeIn Editorial | Updated 2026-03-02 | Sources: Zillow, HUD, Tax Foundation
Avg Closing Costs
$14,751
As % of Price
4.4%
Transfer Tax
0.37%
Attorney Required
No
Closing Cost Breakdown for a $335,560 Home
| Item | Estimated Cost |
|---|---|
| Loan Origination Fee (1%) | $2,684 |
| Appraisal Fee | $500 |
| Credit Report | $50 |
| Title Search & Insurance | $1,678 |
| Transfer Tax | $1,242 |
| Recording Fees | $150 |
| Home Inspection | $400 |
| Survey | $350 |
| Attorney Fee (optional) | N/A |
| Prepaid Property Tax (2 months) | $274 |
| Prepaid Homeowners Insurance (1 year) | $1,007 |
| Prepaid Interest (15 days) | $717 |
| Estimated Total | $9,052 |
* Estimates based on average Tennessee home price of $335,560 with 20% down payment. Actual costs may vary. Transfer tax, attorney fees, and prepaid items are state-specific.
How to Reduce Closing Costs in Tennessee
Understand Transfer Tax and Indebtedness Tax
Tennessee charges both a transfer tax (0.37% of sale price, typically paid by seller) and a county indebtedness tax (0.115% of mortgage amount, paid by buyer). Budget the indebtedness tax — on a $300,000 mortgage, that's $345.
Use THDA Great Choice Programs
The Tennessee Housing Development Agency offers Great Choice Home Loans with below-market rates and the Great Choice Plus program providing up to 5% of the purchase price in down payment assistance as a forgivable second loan.
Factor in No State Income Tax
Tennessee has no state income tax on wages, which effectively increases your take-home pay and buying power. When comparing Tennessee home prices to your current state, factor in the income tax savings — it can offset thousands per year in higher home prices.
Get Foundation Inspection in Nashville Area
Central Tennessee sits on limestone karst topography, which can cause sinkholes and foundation issues. A foundation inspection ($300-500) by a structural engineer is particularly important for homes on hillsides or in areas with known karst activity.
Legal Context for Tennessee Closings
Conveyance Document
Warranty or quitclaim deed
Security Instrument
Deed of trust; mortgage sometimes used
Foreclosure Process
Non-Judicial
Attorney Required
No
Tennessee uses warranty or quitclaim deed for property transfers and deed of trust; mortgage sometimes used as the security instrument. While an attorney is not required, you may still choose to hire one.
