💰Costs When Selling A Home In Nashville

Generally, the most costly item associated with selling a home is the commission. We own our brokerage which offers us savings that many agents can’t match without skimping on marketing. We charge a 2% listing fee.

Of course, there are many other fees involved in a traditional sale. Let’s discuss each separately.

Title Insurance 📜

What is title insurance?

It’s an insurance policy that guards lenders and new owners against undisclosed liens that may be found in the future.

Who pays for title insurance?

Like everything in a purchase contract, it’s negotiable. It also varies by area. Let’s focus on Davidson County. The second page of the local purchase agreement is left blank on this matter. When drafting an offer, the buyer’s agent will need to fill in the blank on who pays the cost of the title.

Historically, it’s been commonplace for buyers to ask the seller to cover the cost of title insurance. However, if the listing is brand new to the market or there is a multiple-offer situation, you could see buyers offer to cover the cost of their own policy. It’s also possible to offer to split the cost.

How much is it?

The cost of title insurance is state regulated calculation based on sales price and county, but many factors go into determining it. You can get a basic idea on the Rudy Title website.

Pro Tip: A discount may be available if you have proof of a recent policy.

Attorney & Escrow Closing Fees ✍️

Depending on the amount of work that goes into it, a local title company or attorney will generally charge between $550 and $650 to close on a property. It is not uncommon for the buyer and seller to close at two different venues. Each party is responsible for its own escrow fee.

Property Taxes and Other Prorations 📅

Even if you are already paying your taxes on a monthly installment with your mortgage company, the closing company will go ahead and collect your portion of the tax bill on the closing statement and send it to the city. You will be mailed a refund of the taxes that have already been collected and are now sitting in your escrow account a few weeks after the mortgage is paid off.

HOA dues will also likely be prorated, as will any fuel like propane that needs to be transferred.

Your Final Month of Mortgage Interest 🏦

Many folks fail to realize that when they make a mortgage payment, it is being paid in arrears for the month they were just in the home, unlike rent, typically paid at the beginning of the month for future days. Imagine that it is late April, and your home is on the market. You receive an offer, and the buyer wants to close on June 12th. You will still be responsible for making your May 1st and June 1st regular mortgage payments. On the settlement statement, the closing company will also collect twelve days of interest to be sent along with your mortgage balance as your total loan payoff. So this number will vary depending on the day you close.

Home Warranties 🔧

A one-year home warranty, depending on the type of policy, will generally run from $550-$850. They are third-party policies that can offset the cost of *some* repairs that could arise during the ordinary course of ownership. Some sellers offer warranties as an incentive. Some buyers ask for a warranty in negotiations.

More On Commissions 💼

The seller has historically paid the commission for both the listing and buyer brokers. The amount of commission has always been negotiable, but a common industry practice was 6% of the sales price, usually split equally by the buying and selling companies.

As mentioned above, we charge less than most but more than some. We’ve determined that 2% will cover the costs of the listing portion of our business without sacrificing your best interests. Can you find an agent who charges less? Probably. If you go that route, trust that you may not receive top-notch services, advice, or marketing.

The compensation offered to the buy-side brokerage has become a moving target recently due to a settlement with the National Association of Realtors. You can read more about the commission settlement here.

Additional Fees to Consider 💡

Wire Fee – Your bank may charge an incoming or outgoing wire fee.
Courier Fees – To get the documents to and from attorneys and downtown for recording
Power Of Attorney – If one of your signing parties can’t be present, a POA may be issued. A POA will likely be much cheaper than returning to town if you have already relocated out of the area.
Payoff Fees – Some lenders and loan servicers may charge a fee for issuing payoff info.
Transfer Fees – Many homeowner associations charge transfer fees.

Fees We Don’t Charge 🚫

At Brokers Cooperative, we never charge additional marketing, processing, storage, or brokerage fees beyond our commission.

Buyer Cost Assistance 🎁

The buyer has an entire set of additional fees (see our Buyer Closing Costs post). The buyer is generally responsible for the cost associated with their loan (appraisal, tax service fee, flood certification, underwriting fees, application fees, credit check, etc.)

In addition, they will have to pay for inspections during their due diligence period.

They may also have pre-paid fees that are required to be collected at settlement. This could include a year’s worth of homeowners insurance, HOA set up fees, and several months of tax reserve.

It is possible for the buyer to negotiate for seller gift assistance with these fees. There are no rules or laws forbidding this. However, there are rules forbidding a seller from participating in the funding of a buyer’s downpayment.