What closing costs actually are
Closing costs are the one-time fees that make a real estate transaction official. They are separate from your down payment and are split, by custom and negotiation, between buyer and seller.
What buyers typically pay
Buyer closing costs commonly run in the range of about 2 to 5 percent of the loan amount, though it varies. They generally include:
- Lender fees (origination, underwriting, credit report, appraisal).
- Title search, title insurance, and settlement or closing fees.
- Prepaid items, the first chunk of property taxes and homeowners insurance, and setting up your escrow account.
- Recording fees and, where applicable, the state transfer tax.
What sellers typically pay
Sellers most often pay the real estate commission agreed in the listing agreement, plus certain title-related and transfer fees and any negotiated concessions. Your net proceeds are the sale price minus your mortgage payoff and these costs.
Tennessee specifics
Tennessee has no state income tax, which helps overall affordability, but the state does levy a transfer tax on real estate and mortgages, typically handled at closing. Who pays which fee is partly customary and partly negotiable, and it can shift in a buyer’s or seller’s market.
Know your numbers before you sign
You should never be surprised at the closing table. Buyers receive a Loan Estimate and later a Closing Disclosure with itemized costs; sellers should get a clear net-proceeds sheet. Karla reviews these with every client so the final figures match expectations.
Frequently asked questions
How much are closing costs in Tennessee?
Buyers commonly pay roughly 2 to 5 percent of the loan amount, and sellers typically pay commission plus certain transfer and title fees. Exact amounts vary by lender and deal, so always review your itemized estimate.
Do buyers or sellers pay closing costs?
Both, on different items. Buyers pay lender, title, and prepaid costs; sellers usually pay commission and certain transfer and title fees. Some costs are negotiable between the parties.
Can closing costs be negotiated or covered?
Sometimes. In certain markets, buyers can negotiate seller concessions toward closing costs, and some loan programs allow help too. Karla can advise on what is realistic in the current market.
Are closing costs part of my down payment?
No. Closing costs are separate one-time fees on top of your down payment. Budget for both when planning your purchase.