Largest Closing Costs Typically Paid by Sellers in Tennessee
In Tennessee, closing costs typically range from 2% to 6% of the property’s sale price. These costs encompass various expenses associated with finalizing the sale, including transfer taxes, title insurance, recording fees, and attorney fees.
1. Transfer Tax: The transfer tax, also known as the documentary stamp tax, is a fee imposed by the state of Tennessee on the transfer of real estate ownership. The tax rate varies by county and ranges from 0.15% to 1.00% of the sale price. For instance, if you sell your land for $200,000 in a county with a 0.75% transfer tax rate, you would pay a transfer tax of $1,500.
2. Title Insurance: Title insurance safeguards both the buyer and the seller from financial losses arising from title defects. These defects include errors or issues with the property’s legal ownership, such as forged documents, undisclosed heirs, or unrecorded liens. Title insurance for sellers in Tennessee typically costs between $300 and $400.
3. Recording Fees: Recording fees are paid to the county clerk’s office for recording documents related to the sale of the property, such as the deed transfer. Recording fees for sellers in Tennessee typically range from $20 to $35.
4. Attorney Fees (if using an attorney): While not mandatory, consulting with a real estate attorney is highly recommended for complex transactions involving mortgages, title issues, or multiple owners. Attorney fees for sellers in Tennessee typically range from $500 to $1,000.
Please note that these are just averages, and your actual closing costs may vary depending on several factors. It is best to consult with an experienced real estate attorney or title company to get a more accurate estimate of your closing costs.