Nashville Closing Costs, Explained

Confused by all the fees that show up at closing? You are not alone. Whether you are buying your first home or selling in order to move up, understanding Nashville closing costs helps you plan with confidence and avoid surprises on signing day. In this guide, you will learn who typically pays what in Davidson County, how credits and concessions work, what timeline to expect, and simple ways to estimate your bottom line. Let’s dive in.

Closing costs 101 in Nashville

Closing costs are the one-time expenses to finalize a home sale. They include lender charges, title services, insurance, recording fees, and prorations for items like property taxes. In Metro Nashville and Davidson County, some costs are customary for buyers, others for sellers, and many are negotiable.

You will see estimates early in the process on your Loan Estimate if you are financing, then final numbers on your Closing Disclosure at least 3 business days before closing. Review both carefully and ask questions if anything looks different than expected.

Buyer costs: what to expect

While exact amounts vary by price, loan type, and date of closing, these line items are common for Nashville buyers:

• Earnest money deposit (EMD)

  • Good-faith money applied to your down payment or closing costs.
  • Often 1% of the purchase price or a flat amount such as $1,000 to $10,000 or more.

• Loan origination and lender fees

  • Lender’s charge to process and underwrite your loan.
  • Commonly 0.5% to 1.0% of the loan amount, or a flat fee depending on lender.

• Appraisal

  • Independent valuation required for most loans.
  • Typical range is about $400 to $800 for a single-family home.

• Credit report, flood determination, and admin fees

  • Smaller line items such as $25 to $75 for credit reports and $10 to $20 for flood checks.

• Lender’s title insurance policy

  • Protects the lender when you have a mortgage.
  • Buyer typically pays this policy in Tennessee.

• Escrow, closing, or settlement fee

  • Fee charged by the title or settlement company for handling the closing.
  • Often $300 to $900. Who pays can be negotiated and may be split.

• Recording fees for the deed of trust or mortgage

  • County charges to record your loan and the deed.
  • Usually paid by the buyer for the mortgage documents. Exact amounts depend on Davidson County’s schedule.

• Prepaid items and escrow deposits

  • First year of homeowners insurance, prorated property taxes, prepaid mortgage interest, and initial escrow account deposits.
  • Insurance is commonly $600 to $2,000 or more depending on coverage. Initial escrow deposits vary.

• HOA-related fees (if applicable)

  • Transfer or setup fees, capital contributions, and estoppel certificates.
  • Often $100 to $500 or more. Responsibility varies by association rules and your contract.

Seller costs: what to expect

Nashville sellers typically see these costs deducted from proceeds at closing:

• Real estate brokerage commissions

  • Paid by the seller and split among the brokers per the listing agreement.
  • In many markets including Nashville, a combined 5% to 6% of the sales price is common, though rates vary.

• Owner’s title insurance policy

  • Customarily paid by the seller in Tennessee to protect the buyer’s ownership.
  • Often a small percentage of the price, commonly around 0.5% to 1% based on rate schedules.

• Settlement or closing fee (seller share)

  • Sellers often pay a portion of the title or settlement fee.
  • Budget $300 to $1,000 or more.

• Payoffs, prorations, and agreed repairs

  • Existing mortgages, liens, and judgments are paid off from proceeds.
  • Property taxes are prorated to the closing date. Any negotiated repairs or credits are settled on the final statement.

• Transfer and recording charges

  • Tennessee and Davidson County have specific recording and documentation charges. Confirm the current county schedule with your title company.

Who pays for title insurance in Tennessee

In many Tennessee transactions, the seller pays for the owner’s title insurance policy and the buyer pays for the lender’s title policy when there is a mortgage. This is a common local custom, not a law. Your purchase agreement decides who pays what, so make sure the contract clearly states the responsibility for both owner’s and lender’s policies.

How seller credits and concessions work

Seller concessions, also called seller credits, are amounts the seller agrees to contribute toward buyer costs. You will see them listed as a credit on the Closing Disclosure. They can reduce your cash needed to close and can be applied to closing costs, prepaid items, or a mortgage rate buydown.

• Common uses

  • Offset closing costs or prepaids to lower your out-of-pocket.
  • Fund a temporary or permanent interest rate buydown.
  • Provide a credit for repairs instead of completing work before closing.

• Program limits to keep in mind

  • Loan programs cap how much a seller can contribute. As examples, FHA has historically allowed up to 6% of the sales price for concessions, while VA and USDA allow seller-paid items with program-specific limits. Conventional loans set caps that vary by occupancy and down payment. Always confirm current limits with your lender before you negotiate credits.

• Practical tips

  • A higher purchase price in exchange for seller-paid costs can make sense if it keeps your cash to close manageable and the appraisal supports the price.
  • In competitive situations, smaller or no concessions are often more attractive to a seller.
  • Your earnest money deposit is applied as a credit at closing, which also reduces cash needed.

Timeline from contract to closing

Most financed purchases in Nashville close in about 30 to 45 days. Cash deals can close in 2 to 3 weeks if all parties move quickly. Here is the typical flow:

• Day 0: Contract is ratified. Your agent sends the contract to your lender and the title or closing company.
• Days 0 to 7: You complete loan application and upload documents. Your lender issues a Loan Estimate within 3 business days of application.
• Days 0 to 14: Title company orders the title search and issues a commitment with any exceptions.
• Days 3 to 14: You conduct inspections and negotiate repairs or credits.
• Days 7 to 21: Lender orders the appraisal. Turnaround is often 1 to 3 weeks.
• Days 10 to 30: Underwriting reviews your file and issues conditions to clear.
• 1 to 3 days before closing: You complete a final walk-through.
• At least 3 business days before closing: You receive the Closing Disclosure. Review each fee and confirm credits.
• Closing day: Sign documents and wire funds or bring a cashier’s check. The title company submits recording after funding.

Tip: Build in extra time for condos with association document requests, new construction, or if any party is signing from out of state.

Estimate your cash to close

Before you start touring, create a quick budget so you know your target.

• Step-by-step method

  1. Start with your target purchase price.
  2. Estimate buyer closing costs at 2% to 5% of the price if you are financing. Cash buyers usually see lower totals.
  3. Add prepaids and escrow deposits such as 1 year of homeowners insurance, property tax prorations, and prepaid interest.
  4. Subtract your earnest money deposit since it will be credited at closing.
  5. Subtract any seller concession you plan to request, making sure it is within your loan program’s limit.
  6. Add your down payment if you are getting a mortgage.

• Example A: conventional loan, $400,000 price, 20% down

  • Down payment: $80,000
  • Buyer closing costs: $8,000 to $16,000 (2% to 4%)
  • Prepaids and escrows: $2,000 to $5,000
  • Earnest money credit: $5,000
  • Estimated cash to close range: about $85,000 to $96,000

• Example B: conventional loan, $400,000 price, 3% down

  • Down payment: $12,000
  • Buyer closing costs: $8,000 to $20,000 (2% to 5%)
  • Prepaids and escrows: $2,000 to $5,000
  • Seller credit toward costs: $8,000 (confirm allowed)
  • Earnest money credit: $5,000
  • Estimated cash to close: about $12,500, showing how credits can ease out-of-pocket needs

These are planning numbers. Your lender and title company will provide exact figures tailored to your loan, closing date, and property.

Estimating seller net proceeds

If you are selling, sketch your bottom line before you list so you can price and plan with confidence.

• Start with the expected sales price.
• Subtract brokerage commissions. A combined 5% to 6% is common in many markets, though rates vary by agreement.
• Subtract the cost of the owner’s title policy, any buyer concessions you agree to, and your portion of settlement fees.
• Subtract your mortgage payoff(s), prorated property taxes, HOA or assessments due, and any repairs or credits.
• The result is an estimate of your net proceeds before any personal tax considerations.

Local budgeting tips in Davidson County

• Confirm who will pay the owner’s title policy in your contract. In Tennessee, sellers commonly pay this, but it is negotiable.
• Ask your lender for a Loan Estimate early so you can compare programs and closing cost structures.
• Request a fee quote from your title company that reflects current Davidson County recording charges and your property type.
• If the property has an HOA, verify transfer or capital contribution fees and who pays them.
• If you plan to use seller credits, confirm your loan’s concession limit before you write the offer.

Wire safety at closing

Wire fraud is a real risk. Always call your title company using a known, verified phone number to confirm wire instructions. Never rely only on email for changes to wiring details, and avoid sending sensitive information over unsecured networks.

Ready to plan your move

If you want clear numbers for your situation, ask for a customized estimate that reflects your price point, loan type, and timing. We can coordinate with your lender and closing team so your Closing Disclosure matches what you expect. When you are ready, we will help you build a winning offer and negotiate credits or terms that fit your goals.

Let’s talk about your next move with Zeitlin Sotheby’s International Realty.

FAQs

What are typical buyer closing costs in Nashville?

• Buyers who finance often budget 2% to 5% of the purchase price for closing costs, plus prepaids like insurance and escrow deposits.

Who pays the owner’s title insurance policy in Tennessee?

• It is common for the seller to pay the owner’s title policy in Tennessee, but the purchase contract ultimately decides who pays.

How do seller credits reduce my cash to close?

• Seller credits appear on your Closing Disclosure as a credit that pays eligible costs, which lowers the amount you need to bring to closing by the same amount.

How are property taxes handled at Nashville closings?

• Property taxes are prorated between buyer and seller based on the closing date using Davidson County’s tax records and billing schedule.

How long does it take to close in Davidson County?

• Many financed purchases close in 30 to 45 days, while cash transactions can sometimes close in 14 to 21 days.

What is earnest money and what happens to it?

• Earnest money is a good-faith deposit applied to your down payment or closing costs at closing, reducing your final cash to close.

What if I want a rate buydown funded by the seller?

• It is allowed in many cases, but your loan program sets limits on concessions, so confirm the maximum with your lender before negotiating.