Seller closing costs in Tennessee: the full line-item list
Tennessee is a comparatively cheap state to sell in. There is no state income tax on the sale and the transfer tax is modest — but the line items still add up, and one of them surprises almost every seller.
Outside of commission, a Tennessee seller typically pays 1% to 3% of the sale price in closing costs. The pieces are the state transfer tax at $0.37 per $100 of consideration (about $1,295 on a $350,000 sale), a prorated share of county property taxes, the mortgage payoff and any release fees, closing or settlement fees split by contract, and whatever repairs or buyer concessions were negotiated.
State realty transfer tax on the consideration — about $1,295 on a $350,000 sale.
Tennessee has no state income tax. Federal capital gains rules still apply.
Excluding commission and loan payoff. Concessions can push it higher.
Line by line, what comes out of a Tennessee sale
These are the items that show up on a seller's settlement statement in East Tennessee. Some are fixed by statute, some are negotiated in the purchase contract, and some depend entirely on your loan.
- State realty transfer tax — $0.37 per $100 of consideration, customarily the seller's cost
- Prorated county property taxes through the closing date
- Loan payoff, plus any prepayment or reconveyance/release recording fee
- Closing or settlement fee — split per contract; commonly shared in this market
- Owner's title policy where the seller has agreed to provide it, plus deed preparation
- Recording fees for the deed and any release documents
- Negotiated repairs from the inspection, and any buyer closing-cost concession
- HOA transfer or estoppel fee where an association exists
- Real estate commission as agreed in the listing agreement
- Septic, well, or termite letters where the property or loan program requires one
A worked example on a $350,000 East Tennessee sale
Assume $350,000 sale price, a $180,000 loan payoff, 5.5% total commission, and a $3,000 buyer concession. Transfer tax runs about $1,295. Settlement fee, deed prep, and recording land in the $600–$900 range on a typical file. Prorated taxes depend on your closing month and county rate. Commission at 5.5% is $19,250.
That puts total seller costs around $24,500 to $25,500 before payoff, leaving roughly $145,000 in proceeds on a $180,000 payoff. Your file will differ — a well or septic letter, an HOA, or a repair credit can each move it by four figures.
Want your actual number, not a national average?
Our valuation is built from recorded closed sales across the four Tennessee MLS feeds we belong to, then reviewed by a local listing agent. No listing agreement, no obligation.
Get my home value rangeThe item that surprises sellers
It is rarely the transfer tax. It is the inspection round. A buyer's inspection on a 1970s East Tennessee house routinely turns up crawlspace moisture, an aging HVAC system, a roof at the end of its life, or an electrical panel a lender will not accept. Those get negotiated as repairs or credits after you are already under contract and emotionally past the sale.
The way to control it is to know about them before the buyer does. On listings where the age or condition suggests it, we talk through a pre-listing walkthrough and whether it is worth handling anything up front versus pricing for it openly.
Federal capital gains, briefly
Tennessee does not tax the income, but the federal exclusion still governs. Broadly, the IRS allows a single filer to exclude up to $250,000 of gain on a primary residence and married filers up to $500,000, subject to ownership and use tests. Investment property, land, and second homes follow different rules, and a 1031 exchange may apply. This is a summary, not tax advice — confirm your specific situation with a CPA before you close.
Common questions
What is the transfer tax when selling a house in Tennessee?
Tennessee charges a state realty transfer tax of $0.37 per $100 of consideration, which is customarily paid by the seller. On a $350,000 sale that is about $1,295.
How much are seller closing costs in Tennessee?
Excluding commission and loan payoff, most Tennessee sellers pay 1% to 3% of the sale price. Negotiated repairs and buyer concessions can push the figure higher.
Does Tennessee tax the profit on selling my home?
Tennessee has no state income tax, so the gain is not taxed at the state level. Federal capital gains rules still apply, including the primary-residence exclusion. Confirm your situation with a CPA.
Who pays the closing fee in Tennessee?
It is negotiated in the purchase contract. In East Tennessee the settlement fee is commonly split between buyer and seller, but the contract controls.
Keep going
This page is general information about selling residential property in Tennessee and is not legal, tax, or accounting advice. Figures are typical ranges observed in East Tennessee and will differ on your transaction. Spring Mountain Realty PLLC is licensed in Tennessee and does not list or sell property in Virginia. Commission rates are negotiable and are not set by any board, association, or government agency. Spring Mountain Realty PLLC fully supports the Fair Housing Act and the Equal Opportunity Act.