How Much Do Sellers Pay at Closing in Tennessee?

How much do sellers pay at closing in Tennessee?

In Tennessee, sellers typically pay between 7% and 9% of the final sale price at closing. On a $425,000 home — near the Lebanon and Nashville metro median — that's roughly $29,750 to $38,250. The largest costs are agent commissions, the Tennessee Documentary Transfer Tax ($0.37 per $100 of sale price), owner's title insurance, and prorated property taxes for the portion of the year you owned the home.

By Khristian Schlemmer | June 10, 2026

Before you list your home, you need to know the answer to the most important financial question in the whole transaction: how much will you actually walk away with?

Most sellers in Lebanon, Mt. Juliet, Murfreesboro, and across the Nashville metro have a number in their head. It's usually the Zestimate, the neighbor's sale price, or what Zillow says. What that number doesn't account for is the 7–9% of your sale price that leaves your pocket before the wire hits your bank.

Here's exactly what makes up that number.

The Biggest Line Item: Agent Commission

In Tennessee, the combined agent commission is typically around 5–6% of the sale price, split between your listing agent and the buyer's agent. That split — and how much each side earns — has become more negotiable in the current market. Following the national broker commission changes that took effect in 2024, buyers now negotiate their agent's compensation separately, though sellers still commonly offer a buyer's agent commission to attract offers.

On a $425,000 sale, a 5.5% combined commission runs $23,375.

That's your largest closing cost by a wide margin. And it's why your net — what you actually receive — is always considerably less than your sale price.

The Tennessee Documentary Transfer Tax

This one surprises sellers who aren't expecting it. Tennessee charges a Documentary Transfer Tax at the rate of $0.37 per $100 of the sale price. By state law, this is the seller's responsibility.

Here's what that looks like on real Lebanon and Nashville area numbers:

• $350,000 home → $1,295

• $425,000 home → $1,572

• $500,000 home → $1,850

• $750,000 home → $2,775

It's not the biggest line item, but it's one that catches sellers off guard if no one mentions it upfront. I always include it in the first net sheet I run with a client.

Owner's Title Insurance

In most Tennessee transactions, the seller pays for the owner's title insurance policy — the coverage that protects the buyer against any future claim on the title. (The buyer pays for lender's title insurance separately.)

Owner's title insurance in Tennessee typically costs around 0.5–0.6% of the sale price:

• $350,000 home → ~$1,750–$2,100

• $425,000 home → ~$2,125–$2,550

• $500,000 home → ~$2,500–$3,000

Your title company will give you an exact quote during the transaction, but these ranges are reliable for planning purposes.

Prorated Property Taxes

Tennessee property taxes are paid in arrears — the annual bill typically arrives in the fall for the prior year. At closing, you'll be responsible for your prorated share of the current year's taxes, covering the months you owned the home.

The exact amount depends on when in the year you close and what your tax bill will be. For Wilson County homeowners, this is especially worth watching right now. If you've been following the 2026 Wilson County property tax reappraisal — which showed average assessment increases of around 66% — your prorated tax figure at closing may be higher than you'd expect based on previous years.

On a $425,000 Lebanon home assessed at current Wilson County rates, annual property taxes are estimated around $1,700–$2,400. Prorated to a mid-year closing (June), your credit at closing would be approximately $850–$1,200.

Other Line Items to Budget For

Beyond the big four, a few other costs typically appear on the seller's closing disclosure:

• Recording fees — $15–$50, charged by the county to record the deed transfer

• HOA transfer fee (if applicable) — varies by community; can run $100–$500

• Seller concessions (if negotiated) — in today's Nashville market, where 68% of sellers are offering some form of buyer incentive, you may agree to contribute to the buyer's closing costs. A common range is $3,000–$10,000, depending on your home's price point and how long it's been on the market.

• Pre-listing costs — repairs, staging, professional photography, and deep cleaning aren't closing costs in the technical sense, but they directly reduce your net. Budget these before you price.

  
  

Putting It Together: What a Seller Actually Nets on a $425,000 Lebanon Home

Let's run a realistic example:

Line Item	Estimated Cost
Agent commission (5.5%)	$23,375
Tennessee Documentary Transfer Tax	$1,572
Owner's title insurance (0.55%)	$2,338
Prorated property taxes (6 months)	$950
Recording and miscellaneous fees	$200
Seller concession (if offered)	$5,000
Estimated total closing costs	$33,435
Estimated net proceeds	~$391,565

That's about a 7.9% reduction from your sale price — which falls right in the middle of the typical Tennessee range.

Your actual number will shift based on your commission agreement, whether you offer concessions, your specific tax assessment, and any repairs or credits negotiated during the inspection period. This is exactly the kind of thing I walk through with every seller before we agree on a list price — and why a net sheet is the first document I produce, before we even talk strategy.

What Doesn't Come Out of Seller Proceeds

A few things sellers often ask about:

Capital gains tax: Tennessee has no state income tax, so there's no state-level capital gains tax on your home sale. At the federal level, most homeowners qualify for the $250,000 exclusion (single filer) or $500,000 exclusion (married filing jointly) on the gain from selling a primary residence — as long as you've owned and lived in the home for at least two of the last five years. If your gain is significant and you have questions about your specific situation, a quick conversation with a tax advisor is worth it. But for most sellers in the Lebanon to Nashville price range, capital gains tax isn't a factor.

Mortgage payoff: Your outstanding mortgage balance is paid off at closing from your proceeds, before you receive anything. If you owe $280,000 and your net proceeds are $391,565, you'll walk away with approximately $111,565. Your title company will obtain an exact payoff quote from your lender during the transaction — this is part of the standard process.

Frequently Asked Questions

Who pays closing costs in Tennessee — the buyer or the seller?

In Tennessee, both parties pay closing costs, but they cover different items. Sellers typically pay agent commissions, the Tennessee Documentary Transfer Tax, and owner's title insurance — totaling 7–9% of the sale price. Buyers pay their lender's title insurance, origination fees, appraisal, and prepaid escrow items, which typically runs 2–4% of the purchase price.

Does the seller in Tennessee have to pay the buyer's agent commission?

Not by law, but it's still common practice. Following the 2024 national commission changes, buyer's agent compensation is negotiated separately — but most sellers in the Nashville metro continue to offer some buyer's agent commission to attract qualified buyers. Your listing agent can help you decide the right strategy for your specific market and price range.

Can the seller negotiate who pays for title insurance in Tennessee?

Yes — while it's customary in Tennessee for the seller to pay for owner's title insurance, this is negotiable and can vary by transaction. In a competitive seller's market, buyers sometimes agree to cover it. In a slower market where sellers are offering concessions, the seller almost always pays it.

How does the Tennessee Documentary Transfer Tax work?

The Tennessee Documentary Transfer Tax is a state-level tax on the sale of real property, charged at $0.37 per $100 of the sale price. It's the seller's legal responsibility and is typically collected by the title company at closing. On a $450,000 sale, the tax runs approximately $1,665.

What is a seller net sheet?

A seller net sheet is a detailed estimate of your expected proceeds after all closing costs, mortgage payoff, commissions, and other fees are accounted for. It's the only way to know what your home sale will actually put in your pocket — and it should be one of the first documents your agent produces. If you're thinking about selling in Lebanon or anywhere in the Greater Nashville area, reach out and I'll run yours for free.

Knowing the typical range is a starting point. Knowing your actual number — based on your specific home, your mortgage balance, your timeline, and what the Wilson County market is doing right now — is where the real planning begins.

If you're thinking about selling in Lebanon, Mt. Juliet, or anywhere in the Greater Nashville area, I'm happy to walk you through the numbers. Reach out anytime and we'll run your net sheet together.

About Khristian Schlemmer, Khristian is a top-producing Middle Tennessee Realtor and founder of First Class Real Estate, serving buyers, sellers, and investors throughout the Greater Nashville area. With over $60 million in career sales and 200+ homes sold, he is known for creative marketing, strong negotiation, and delivering a true first-class client experience. Born into a family passionate about real estate investing and home building, Khristian combines local market expertise with modern marketing strategies to help clients confidently achieve their real estate goals.