Hey! Here is a conversation I have constantly, and almost never early enough.
A seller looks at their list price, subtracts what they owe, and decides that difference is what they are walking away with. Then the closing statement shows up and the number is smaller, and nobody warned them why.
So let’s walk through what actually comes out between the sale price and the wire that hits your account. Not to scare you, just so there are no surprises in week six.
First, the honest disclaimer
I am a REALTOR®, not a title agent, a closing attorney, or a CPA. I can build you a seller net sheet, which is an estimate, and a good one. I cannot give you the binding figures, because those come from the closing company and they depend on things only they can see.
What I can do is tell you what the categories are, which ones are negotiable, and which ones surprise people. Then your closing agent fills in the exact dollars.
What comes out of your proceeds
Your mortgage payoff. This is the big one, and it is almost never the number on your last statement. A payoff includes interest accrued up to the day of closing, so it climbs a little every day. If you have a second mortgage, a home equity line, or a lien you forgot about, those come out too.
The real estate commission. This is negotiated between you and your brokerage, it is written into your listing agreement before your home goes on the market, and there is no standard or required rate. Anyone who tells you the rate is set by law, by the MLS, or by any association is wrong. Whatever we agree to is what you will see on the statement, and you will know it before you sign anything.
The Tennessee transfer tax. The state charges $0.37 per $100 of the purchase price. On a $400,000 sale that is $1,480. Customarily the seller pays this in our market, though like most things at closing it can be negotiated in the contract.
Property taxes, prorated. Tennessee property taxes are paid in arrears, so at closing you settle up for the portion of the year you owned the home. Close in November and you are covering most of the year. Close in February and you are covering very little. Your closing agent calculates this to the day.
Title and closing fees. Closing fee, document prep, recording, wire fees, and in some transactions an owner’s title policy. These vary by company, which is exactly why I am not going to quote you a figure. The closing company will, in writing, and you can ask for that early.
Anything you agreed to in the contract. Repair credits, a home warranty, closing cost help for the buyer. These get negotiated during the inspection period and they come straight off your side.
HOA items, if you have one. Dues prorated, and often a transfer or document fee. Worth asking about early, because some associations are slow to produce paperwork and it can hold up a closing.
The three that surprise people most
Per diem interest. Sellers budget for their loan balance and forget that interest keeps running until the day the loan is actually paid off. It is not huge, but it is always more than the statement showed.
Solar leases and financed systems. If there is a leased solar system, a water softener on contract, or anything similar attached to the house, it has to be transferred or paid off, and that is a real line on your statement. Flag it to me on day one, not week five.
Repair credits. Most sellers mentally budget for the commission and the payoff and nothing else. The inspection period is where the number actually moves, and the best protection against it is handling the obvious things before you list rather than negotiating them after.
What is not automatically a cost
Professional photography, the listing on the MLS and the portals, the marketing, the open houses. When you work with me those are mine to cover, not line items on your statement. Ask any agent you interview to be specific about what they pay for and what they bill back, because that genuinely varies.
The tax question, which is not mine to answer
Whether you owe anything on the gain is a CPA question, not a REALTOR® question. There is a federal exclusion for a primary residence that a lot of sellers qualify for, and the rules around it have real conditions about how long you lived there and when you last used it.
Tennessee has no state income tax on wages, which people often assume settles it. It does not settle the federal question. Talk to your accountant before you list, not in April.
How to get a real number
Two steps, and you can do both before you ever commit to selling.
Ask me for a net sheet. Give me your address and roughly what you owe, and I will put together an estimate based on a realistic price range for your home. That is normal agent work and it costs you nothing.
Ask a closing company for a quote. They will tell you their actual fees. If you do not have one you like, I am happy to give you a few names to call.
Between those two you will have a number you can plan around, well before you make a decision.
Common questions
What do sellers pay at closing in Tennessee?
The largest items are the mortgage payoff, the negotiated real estate commission, the state transfer tax of $0.37 per $100 of purchase price, prorated property taxes, and title and closing fees. Repair credits and HOA items come up in many transactions. Exact amounts come from your closing agent.
Is the real estate commission a set percentage?
No. It is negotiated between you and the brokerage you hire, and it is written into your listing agreement before your home goes on the market. There is no standard, required, or legally set rate.
Who pays the transfer tax in Tennessee?
The state sets the rate at $0.37 per $100 of purchase price. Which party pays it is customary rather than required, and in our market it typically falls to the seller. It can be negotiated in the contract.
When should I ask for a net sheet?
Before you spend money on repairs. The point of a net sheet is to tell you whether selling makes sense at all, and that is a question worth answering before you replace a roof.
Let’s run your numbers
If you are even casually thinking about selling, a net sheet is the cheapest clarity you can get. It takes me very little time and it answers the question you actually care about, which is what lands in your account.
Text or call me at 865-257-4680, or set up a selling consultation and we will go through it together. If you want a ballpark on value first, the instant home value estimate is a reasonable starting point, though it is a starting point and not a price. I wrote about why those estimates miss if you want the longer version.
This is general information about how a Tennessee closing is structured, not legal, tax, or title advice. Figures other than the published state transfer tax rate vary by transaction and by closing company. Your closing agent provides binding numbers and your CPA advises on tax. Transfer tax rate from the Tennessee Department of Revenue.
Lily Dailey, REALTOR®, ABR, MRP. Dailey Dream Homes with Greater Impact Realty. TN License # 379779. Greater Impact Realty, 420 Bearden Road, Knoxville TN 37919, Firm # 264130. Equal Housing Opportunity. Dailey Dream Homes is the personal marketing brand of Lily Dailey, a licensed real estate agent affiliated with Greater Impact Realty, and is not an independent brokerage.
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