Buying in Franklin and not sure how much cash you’ll need at the closing table? You’re not alone. Whether you’re purchasing your first home or relocating on a tight timeline, closing costs can feel opaque. In this guide, you’ll learn what buyers typically pay in Tennessee, how to estimate your total by price point, and smart ways to reduce cash due at closing. Let’s dive in.
What closing costs cover
Closing costs are the one‑time fees to secure your loan and transfer the property, separate from your down payment and monthly expenses. In many U.S. markets, buyers should plan for roughly 2% to 5% of the purchase price in closing costs. In higher‑priced areas like Franklin, the dollar amount is larger, and you also need to plan for prepaid items like insurance, escrow deposits, and prorated taxes.
A key local note: In Tennessee, it is often customary for the seller to pay for the owner’s title insurance policy. That can reduce your out‑of‑pocket total compared with markets where buyers pay that policy. Customs can vary by transaction and title company, so always confirm up front.
Common buyer‑paid items
Here are typical buyer charges you may see on your Closing Disclosure. Exact amounts come from your lender and title company.
- Loan origination or lender fees: Often 0.5% to 1.0% of the loan amount, or a flat processing fee.
- Discount points (optional): Prepaid interest to lower your rate. Typically 0% to 2% of the loan.
- Appraisal: Usually 400 to 900 dollars, depending on the home.
- Home inspection and specialty inspections: General inspection 300 to 700 dollars; add‑ons like termite or radon can range from 75 to 600 dollars each.
- Credit report: About 25 to 75 dollars.
- Title search and settlement/escrow fees: Several hundred dollars for title work and closing services.
- Lender’s title insurance: Required by most lenders; the premium scales with price.
- Recording and mortgage taxes/fees: County charges to record your mortgage and deed. These are usually modest but should be confirmed for Williamson County.
- Escrow deposits: Initial funding for taxes and insurance, often a few months of taxes and one year of insurance collected at closing.
- Prepaid interest: Interest from your closing date to your first payment date.
- HOA transfer or estoppel fees: If the property is in an HOA, plan for 100 to 400 dollars.
- Survey (if required): Often 300 to 1,000 dollars or more.
- Prorations: Reimbursements for your share of taxes, HOA dues, and utilities from the day after closing.
Items sellers often cover in Tennessee
- Owner’s title insurance policy: Commonly paid by the seller in Tennessee, though it is negotiable and can vary by title company and contract.
- Home warranty: Sometimes offered by the seller, or you can purchase your own. Typical policies run 300 to 700 dollars.
- Deed recording or transfer items: Allocation may depend on local custom and your agreement. Confirm with your title company.
Always verify who pays what during your offer stage so you can budget accurately.
How to estimate your total
Use this simple framework to build a realistic estimate before you write an offer.
Quick rule of thumb
- Start with 2% to 5% of the purchase price for buyer closing costs.
- Add prepaid items: a few thousand dollars for insurance, taxes, and escrow deposits, depending on the property and timing.
- Layer in known flat fees: appraisal, inspection, and credit report.
- Ask your lender for origination and any points, and your title company for title and recording fees.
- Rely on your Loan Estimate and later your Closing Disclosure to dial in the final number. Lenders must provide the Loan Estimate within three business days of application, and the Closing Disclosure at least three business days before closing.
Sample estimates by price point
These examples exclude your down payment and assume the seller is paying the owner’s title policy when customary. Your numbers may vary with loan program, escrow requirements, and concessions.
400,000 dollars purchase price
- Range at 2% to 4%: 8,000 to 16,000 dollars
- Typical fixed items: appraisal about 500 dollars, inspection about 450 dollars, credit report about 50 dollars, lender fees around 0.75% of the loan amount, prepaids and escrow roughly 2,000 to 4,500 dollars
- Practical guidance: budget 10,000 to 16,000 dollars
700,000 dollars purchase price
- Range at 2% to 4%: 14,000 to 28,000 dollars
- Typical fixed items: appraisal 500 to 700 dollars, inspection 400 to 700 dollars, lender fees 0.5% to 1%, prepaids and escrow roughly 3,000 to 8,000 dollars
- Practical guidance: budget 15,000 to 28,000 dollars
1,200,000 dollars purchase price
- Range at 2% to 4%: 24,000 to 48,000 dollars
- Larger homes can have higher appraisal and inspection costs. Title premiums and escrow deposits scale with price and local taxes.
- Practical guidance: budget 25,000 to 50,000 dollars
2,000,000 dollars purchase price
- Range at 2% to 4%: 40,000 to 80,000 dollars
- Expect larger absolute charges for title insurance, escrows, and possible additional surveys or inspections.
- Practical guidance: budget 45,000 to 90,000 dollars
Prepaids and escrows explained
Prepaids are not fees. They are advance funds to start your escrow accounts and align your payments with tax and insurance cycles.
- Property taxes: Lenders often collect 2 to 6 months of taxes at closing, depending on timing.
- Homeowner’s insurance: Plan for one full year of the premium paid at closing.
- Prepaid interest: You pay interest from your closing date to month‑end. A late‑month closing can reduce this line.
These items vary with closing date, local tax calendars, and mortgage servicer policies, so build a cushion in your budget.
Who pays what in Franklin
Local customs play a role in Tennessee. In many Franklin transactions, the seller pays the owner’s title insurance policy, and the buyer pays the lender’s title policy, mortgage recording fees, and most loan‑related costs. Some fees can be bundled or allocated differently by title company or contract. Clarify the split early with your agent and title company so there are no surprises.
Negotiating help with closing costs
You have options to lower your cash due at closing. Each tactic has tradeoffs.
Seller credits
You can request that the seller pay some of your closing costs as a credit at closing. This reduces your cash needed but lowers the seller’s net proceeds. In a competitive situation, consider pairing this request with terms the seller values, like a flexible closing date.
Lender credits
You can accept a slightly higher interest rate in exchange for lender credits that cover some closing costs. This reduces upfront cash but increases your monthly payment. It is best suited when you expect to refinance or sell before the breakeven point.
Raising the purchase price to cover credits
Some buyers increase their offer price and ask for an offsetting seller credit so the seller’s net stays similar. Watch appraisal risk. If the new price does not appraise, your lender will not finance the difference.
Program limits on seller concessions
Loan programs limit how much the seller can contribute toward your costs. Your lender will confirm the current caps and how credits apply.
- Conventional loans
- Down payment under 10%: seller concessions are typically capped around 3% of the price.
- Down payment 10% to 25%: often up to about 6%.
- Down payment over 25%: often up to about 9%.
- FHA loans: seller concessions are typically capped at 6% of the lesser of price or appraised value.
- VA loans: sellers can pay typical closing costs and reasonable incentives, but specific caps and required allocations vary. Confirm with your VA lender.
- USDA loans: seller concessions commonly allowed up to about 6%. Confirm with your lender.
Timing and documents you will see
- Loan Estimate: You receive this within three business days after you apply for a loan. It lays out your estimated interest rate, monthly payment, and closing costs.
- Closing Disclosure: At least three business days before closing, you receive this itemized, final statement of what you will pay and what the seller will pay.
Allow time for HOA documents, title clearance, and any special inspections. These steps can affect both timing and cost.
Practical steps to stay on budget
- Get pre‑approved early and request a written Loan Estimate from your top two lenders.
- Ask a local title company for an itemized quote that includes title premiums and settlement fees.
- Confirm who pays the owner’s title policy in your offer and purchase agreement.
- Time your closing date to manage prepaid interest and escrow deposits, when possible.
- If you need help with cash to close, discuss seller credits and lender credits with your agent and lender before you write the offer.
For relocating executives
If you are moving to Franklin on a corporate timeline, keep your process efficient and private without overspending at closing.
- Request a single point of contact to coordinate inspections, title, and HOA documents.
- Have your lender outline allowable seller credits for your loan program in writing.
- Decide upfront whether rate‑for‑credit tradeoffs make sense for your hold period.
- Build in cushion for HOA transfer fees in gated or amenitized communities and for specialty inspections when buying larger or older homes.
Ready to move in Franklin?
Understanding closing costs gives you leverage. You can budget with confidence, write stronger offers, and decide where credits or lender options make the most sense. If you want a discreet, step‑by‑step plan tailored to your price point and timing, we’re here to help. Request a private consultation with Stutts Miller Properties.
FAQs
What are typical closing costs for a Franklin buyer?
- Most buyers budget 2% to 5% of the purchase price for closing costs, plus prepaids like insurance, escrow deposits, and prorated taxes.
Who usually pays for title insurance in Tennessee?
- It is commonly the seller who pays the owner’s title insurance policy, while the buyer pays the lender’s policy and most loan‑related fees, subject to contract and title company practice.
How can I estimate my total cash to close?
- Add your down payment to a 2% to 5% closing‑cost range, then include prepaids for taxes and insurance and fixed items like appraisal and inspections; verify with your Loan Estimate.
Can the seller pay my closing costs?
- Yes, you can request a seller credit, but loan programs cap concessions and sellers weigh market conditions; your lender will confirm allowable amounts.
Will the closing date affect my costs?
- Yes, prepaid interest depends on the day you close, and escrow deposits vary with tax and insurance cycles, so timing can change your cash to close.
When will I see my final numbers?
- Your lender must deliver a Closing Disclosure at least three business days before closing that lists the final buyer and seller charges in detail.
