Sticker shock from closing costs is real. In Nashville, your down payment is only part of the cash you need to close. If you are buying or selling in Green Hills or anywhere in Davidson County, understanding who pays what and when can help you plan with confidence. In this guide, you will learn typical ranges, line-by-line items, timing, and smart ways to reduce surprises. Let’s dive in.
What closing costs cover
Closing costs are the one-time fees and prepaids due when ownership transfers. They include lender and title charges, government recording fees, and prorations for items like taxes and HOA dues. Buyers and sellers pay different items, and some costs are negotiable in Tennessee. Your final numbers will be set by your loan program, contract terms, and the title company handling your closing.
How much to budget in Nashville
- Buyers typically spend 2% to 5% of the purchase price in closing costs, not including the down payment.
- Sellers typically spend 6% to 10% of the sale price in closing costs, with agent commission often the largest line.
- Green Hills and nearby neighborhoods have higher price points, so the dollar amounts can be larger even when the percentages are typical.
Exact totals vary based on your lender, title company, loan type, and any negotiated credits.
Buyer closing costs line by line
Buyer costs usually fall into these buckets. Amounts vary by lender, property, and timing.
Lender fees and points
- Loan origination or processing: often 0.5% to 1.5% of the loan amount or a flat fee.
- Discount points to buy down your interest rate: optional, priced as a percentage of the loan (1 point equals 1%).
- Underwriting, credit report, and admin fees: small flat fees that vary.
Appraisal and related checks
- Appraisal: often $450 to $800 or more, depending on home size and complexity.
- Other lender checks like flood certification or verification services: typically modest fees.
Title insurance and settlement
- Lender’s title insurance: required by the lender and based on your loan amount.
- Owner’s title insurance: optional but commonly recommended to protect your ownership; who pays is negotiable in Tennessee and can vary by submarket.
- Title search and closing or settlement fee: typically a flat fee set by the title company.
Recording and transfer items
- Recording fees with the Davidson County Register of Deeds: usually in the low hundreds of dollars, based on page count and instruments recorded. Confirm the current fee schedule with your title company.
- Transfer or conveyance taxes: who pays can be negotiable and may follow local custom. Your title agent will confirm the current Tennessee rules and how your contract allocates these.
Prepaids and escrows
- Property taxes: you may prepay a portion and fund an escrow account. Any taxes already paid by the seller are prorated to the closing date.
- Homeowner’s insurance: your first-year premium is often paid at closing.
- Mortgage insurance, if applicable: initial premium or reserves may be due.
- HOA dues: prorated based on the closing date.
Inspections and survey
- Home inspection: often $300 to $600 or more, depending on size and scope.
- Pest or termite inspection: common in Tennessee and typically buyer-paid unless negotiated.
- Survey: sometimes required by the lender, priced by lot size and complexity.
Prepaid interest
- Interest from funding to your first payment date. The amount depends on your closing date within the month.
Seller closing costs line by line
Sellers typically pay several items that reduce net proceeds.
Commission
- Commission is negotiable, and in many markets it commonly ranges from 5% to 6% of the sale price. The agreement you sign with your listing agent governs the final rate and terms.
Payoffs and liens
- Existing mortgages, HELOCs, judgments, or liens must be paid at closing. Payoffs include per-day interest through the closing date.
Title, transfer, and settlement
- Owner’s title insurance: who pays is negotiable and varies by market custom. Clarify early in the contract.
- Settlement or closing fees: may be split or allocated per local practice.
- Transfer or conveyance taxes: payment is often negotiable and follows Tennessee rules and local custom.
Prorations, concessions, and other items
- Property taxes, HOA dues, and utilities are prorated to the closing date per the contract.
- Repairs or credits agreed during negotiations reduce proceeds.
- Miscellaneous costs like courier fees for payoff documents may apply.
Sample math for a Green Hills price point
Here is an illustrative example for a $600,000 purchase or sale. Your numbers will vary by lender, title company, and contract terms.
Buyer at $600,000 with 20% down
- Loan amount: $480,000
- Origination or points at 0.5% to 1.5% of loan: about $2,400 to $7,200
- Appraisal: about $500 to $800
- Lender and title admin fees: about $1,000 to $3,000
- Owner’s title policy if buyer pays: roughly 0.2% to 0.6% of price, about $1,200 to $3,600
- Recording fees: about $100 to $500
- Prepaids and escrows: about $2,000 to $6,000
- Estimated buyer closing costs: roughly $7,200 to $20,100, which is about 1.2% to 3.4% of price. The range depends on whether you pay for owner’s title and how you structure points.
Seller at $600,000
- Commission example at 6%: $36,000
- Title, settlement, and transfer items: commonly in the $1,000 to $5,000 range depending on allocation and fees
- Prorations and routine adjustments: variable, for example $1,500
- Repairs or concessions: negotiable, for example $2,500
- Estimated seller closing costs excluding any mortgage payoff: about $40,000 to $45,000, or roughly 6.7% to 7.5% of price. Net proceeds are the sale price minus your payoff and closing costs.
Timing and disclosures you can expect
- After you apply for a mortgage, the lender must send a Loan Estimate within 3 business days. This outlines your projected closing costs.
- At least 3 business days before you sign, your lender must provide a Closing Disclosure with final numbers. Review it carefully and ask questions early.
- Earnest money is typically held in escrow and applied to your down payment or closing costs at settlement.
- Seller credits agreed in the contract appear on the settlement statement and reduce the buyer’s cash to close, subject to loan program limits.
Who handles closings in Tennessee
In Tennessee, title companies or settlement agents coordinate the closing, prepare the settlement statement, collect funds, and guide recording. After funds are disbursed, the deed and mortgage are recorded with Davidson County. Your title team will confirm any county requirements and the recording sequence for your file.
Prorations in Davidson County
Property taxes, HOA dues, and similar items are prorated based on the closing date per your contract. The method, such as whether the seller pays through the day of closing, follows local practice and the written terms. Because Davidson County bills on a set schedule, your title company will calculate prorations from county records to the exact date.
Ways to reduce or manage closing costs
- Get quotes from multiple lenders and compare Loan Estimates line by line, not just the interest rate.
- Ask for seller credits during offer negotiations. Credits can reduce cash to close, subject to loan limits.
- Clarify who pays for the owner’s title policy before you sign the contract. This is negotiable.
- Review your Loan Estimate and Closing Disclosure with your lender and title agent. Ask to explain any line you do not recognize.
- Ask about timing strategies. Closing earlier in the month often reduces prepaid interest.
- If allowed, compare title or settlement fees among established local providers.
- For sellers, discuss commission structure and any additional fees, and confirm what marketing services are included.
Common pitfalls to avoid
- Not budgeting for prepaids and escrows, which can be a meaningful part of buyer costs.
- Assuming local custom on who pays for owner’s title insurance without confirming it in the contract.
- Waiting until the last minute to wire funds. Always verify wiring instructions by phone with the title company to avoid fraud.
- Overlooking prorations for taxes and HOA dues, which can impact your bottom line.
Buying or selling in Green Hills, Sylvan Park, 12 South, or anywhere in Nashville works best with a clear plan for closing costs. If you want a calm, concierge process with transparent numbers and a savvy strategy for credits and timing, connect with Sarah Butler. Schedule Your Complimentary Concierge Consultation and get a tailored estimate for your specific purchase or sale.
FAQs
How much are buyer closing costs in Nashville?
- Buyers typically budget 2% to 5% of the purchase price for closing costs, excluding the down payment, with the final amount driven by loan type, title choices, and prepaids.
How much are seller closing costs in Davidson County?
- Sellers commonly budget 6% to 10% of the sale price, with commission often the largest line, plus any payoffs, prorations, and negotiated credits.
Who usually pays for owner’s title insurance in Nashville?
- Payment for the owner’s title policy is negotiable and can vary by submarket and contract terms, so clarify responsibility early with your agent and title company.
When will I see my final closing numbers in Tennessee?
- For financed deals, your lender must provide a Closing Disclosure at least 3 business days before closing, which shows your final numbers and cash to close.
Can I roll closing costs into my mortgage?
- Some loan programs allow certain costs to be financed or offset with seller credits, subject to limits and your loan-to-value; ask your lender for specifics.
How are property taxes prorated at a Nashville closing?
- Taxes are prorated to the closing date per the contract, with the seller paying through that date and the buyer responsible for the balance, based on county records and timing.
