What to Expect at Closing as a Tennessee Home Seller
You have accepted an offer, survived the inspection negotiation, and made it through the appraisal. Now comes closing day — the final step where ownership officially transfers from you to the buyer and you receive your proceeds. For many sellers in Tullahoma, Winchester, and Manchester, closing feels like the finish line, but the final stretch has its own set of steps, documents, and potential surprises. This guide walks you through the entire closing process from a seller's perspective so you know exactly what to expect.
The Timeline: What Happens Between Contract and Closing
In Tennessee, the typical time between an accepted offer and closing is 30 to 45 days for a financed purchase (shorter for cash). Here is what happens during that period from your side of the transaction.
Days 1-14: Inspection period. The buyer completes their home inspection, radon test, termite inspection, and any additional assessments. If repair negotiations are needed, they happen during this window. You may need to get contractor estimates, agree to repairs, or negotiate a credit at closing. Once the inspection contingency is resolved, the deal moves forward with significantly less risk of falling through.
Days 7-21: Appraisal. The buyer's lender orders an appraisal. The appraiser visits the property, evaluates condition, takes photos, and compares your home to recent comparable sales. The appraisal must come in at or above the contract price for the loan to move forward. If it comes in low, you and the buyer negotiate — reduce the price, the buyer covers the gap in cash, or some combination. Most appraisals in our market come in at contract price, but gaps do happen, particularly in competitive situations where the buyer offered above asking price.
Days 14-30: Loan processing. The buyer's lender processes the loan — verifying employment, income, assets, and clearing any underwriting conditions. This is largely out of your control, but delays in the buyer's loan processing are the most common reason for closing date extensions. Stay in communication with your agent, who monitors the buyer's lender progress.
Days 25-30: Title work. The title company conducts a title search on your property — confirming clear ownership, identifying any liens or judgments, and ensuring you can legally transfer the deed. If there are title issues (an old mortgage that was not properly released, a judgment lien you forgot about, a boundary dispute), the title company works with you and your agent to resolve them before closing. Title issues are more common on older properties and inherited homes.
Days 28-35: Closing disclosure review. You receive a closing disclosure (also called a settlement statement or HUD-1 equivalent) at least three days before closing. This document shows every dollar — what the buyer pays, what you receive, what goes to fees, commissions, taxes, and payoffs. Review it carefully. I go through every line item with my sellers to confirm accuracy before closing day.
Documents You Will Sign at Closing
As the seller, your document stack is smaller than the buyer's (they sign all the loan documents), but each document you sign carries legal significance.
Warranty deed: This is the document that legally transfers ownership of the property from you to the buyer. A general warranty deed guarantees that you own the property free and clear and have the legal right to sell it. The deed includes the legal description of the property, your name as grantor, the buyer's name as grantee, and any exceptions or easements. This is the most important document you sign at closing.
Closing disclosure / settlement statement: This document itemizes every financial aspect of the transaction — the sale price, your mortgage payoff, prorated property taxes, commission payments, title fees, transfer taxes, and your net proceeds. You sign to confirm the numbers are accurate.
Transfer tax declaration: Tennessee requires a declaration of the sale price for purposes of calculating the realty transfer tax ($0.37 per $100 of the purchase price). This form is filed with the county register of deeds along with the warranty deed.
Affidavit of title: You sign a sworn statement that you are the rightful owner of the property, that there are no undisclosed liens or claims against the property, and that you have not done anything that would affect the title between the title search date and closing.
FIRPTA affidavit: You certify that you are not a foreign person for purposes of the Foreign Investment in Real Property Tax Act. If you are a foreign seller, the buyer is required to withhold 15% of the sale price for the IRS — a situation that requires advance planning.
Payoff authorization: If you have a mortgage on the property, you sign authorization for the title company to pay off your lender directly from the sale proceeds. The title company obtains a payoff statement from your lender before closing and wires the payoff amount on closing day.
Bill of sale: If personal property is included in the sale (appliances, fixtures, or other items not attached to the real property), a bill of sale transfers those items to the buyer.
1099-S authorization: The title company is required to report the sale to the IRS via Form 1099-S. You provide your Social Security number and authorize the reporting.
What You Need to Bring to Closing
Valid photo ID. Driver's license or passport for every person on the title. If two people are on the deed, both must be present or provide a power of attorney.
Keys, garage door openers, and access devices. All keys to the property, garage door remotes, gate codes, security system codes, and any smart home access credentials. Have these organized and ready to hand over.
Any documents required by the contract. Termite bond transfer paperwork, home warranty information (if you are providing one), receipts for completed repairs, and any other items specified in the purchase agreement.
A checkbook (possibly). In most sales, you receive money at closing. But if your payoff amount plus fees exceed the sale price (a short sale or low-equity situation), you may need to bring funds. Your closing disclosure will show whether you owe money or receive proceeds.
Your Closing Costs as a Seller
Here is what Tennessee sellers typically pay at closing on a $300,000 sale in Coffee or Franklin County.
Real estate commissions: Negotiable, typically 5% to 6% total ($15,000 to $18,000 on a $300,000 sale). This is typically the largest seller cost. Since the NAR settlement, commissions are negotiated individually — your listing agent's fee and any buyer agent compensation you agree to offer are separate negotiations.
Owner's title insurance: $300 to $600. Customarily paid by the seller in our market. This policy protects the buyer from title defects that were not discovered during the title search.
Deed preparation: $150 to $250. The attorney or title company drafts the warranty deed.
Prorated property taxes: Variable. You owe property taxes from January 1 through the closing date. If you close on June 15, you owe approximately half a year of property taxes. In Coffee County, that is approximately $600 to $900 on a $300,000 home inside Tullahoma city limits.
HOA fees: If applicable, prorated HOA dues through the closing date. Not common in most Coffee and Franklin County neighborhoods, but applicable in some Tullahoma and Manchester subdivisions.
Recording fees: Minimal — $25 to $50 for recording the satisfaction of your existing mortgage.
Seller concessions: Any credits you agreed to provide the buyer toward their closing costs during negotiation. These come directly off your proceeds.
Mortgage payoff: The remaining balance on your mortgage, including any accrued interest through the payoff date. Your lender provides a payoff statement to the title company.
Sample seller net sheet on a $300,000 sale: Sale price $300,000, minus mortgage payoff ($180,000), minus commissions ($16,500 at 5.5%), minus title insurance ($450), minus deed prep ($200), minus prorated taxes ($750), minus seller concessions ($3,000), minus recording fees ($40). Net proceeds: approximately $99,060.
Common Last-Minute Problems and How to Handle Them
The buyer's loan is delayed. This is the most common closing delay. The buyer's lender needs additional documentation, employment verification hits a snag, or underwriting conditions take longer than expected. When this happens, you have three options: agree to extend the closing date (typically 7 to 14 days), hold firm on the closing date (which may cause the deal to fall through), or negotiate a per diem penalty — a daily fee the buyer pays for each day of delay. I typically recommend a short extension with a per diem of $50 to $100/day to cover your carrying costs.
The title search reveals a lien or judgment. Unpaid contractor liens, tax liens, HOA liens, or court judgments can appear during the title search. These must be resolved before closing — either paid off from your proceeds or disputed if they are invalid. An old mortgage that was paid off but never properly released is surprisingly common, especially on properties that have been refinanced multiple times. The title company can usually obtain a release from the original lender, but it takes time.
The buyer's final walkthrough reveals problems. The buyer does a final walkthrough 24 to 48 hours before closing to confirm the property is in the condition specified in the contract. If you agreed to make repairs and have not completed them, if you removed fixtures that were supposed to stay, or if new damage occurred after the inspection, the buyer can delay closing or demand a credit. Avoid this by completing repairs on time, leaving the home cleaner than expected, and not removing anything that was in the home during showings unless you explicitly excluded it in the contract.
Wire fraud attempt. Real estate wire fraud is a growing threat. Scammers hack email accounts involved in real estate transactions and send fake wire instructions. If anyone sends you wire instructions via email — even if it appears to come from your agent or title company — verify by calling the title company at a number you look up independently (not a number from the email). Never wire funds based on email instructions alone.
After Closing: What Happens Next
Once all documents are signed, the title company records the deed and deed of trust with the county register of deeds. Your mortgage lender receives their payoff. Agent commissions are disbursed. And you receive your net proceeds — typically via wire transfer (same day) or cashier's check.
The title company files the 1099-S with the IRS reporting the sale. Keep your closing documents for tax purposes — you may need them to calculate capital gains exclusion. Under current tax law, single homeowners can exclude up to $250,000 in capital gains ($500,000 for married couples) from the sale of a primary residence if you have owned and lived in the home for at least two of the last five years. Consult your tax professional for your specific situation.
Cancel your homeowner's insurance after closing — not before. Your policy should remain active through the closing date. Also cancel or transfer utilities, forward your mail, and notify your mortgage company if they send any statements after the payoff is recorded.
FAQ
Do I need to attend closing in person?
In Tennessee, you can sign closing documents remotely if necessary. Options include a power of attorney (granting someone authority to sign on your behalf), a mail-away closing (the title company mails documents and you sign before a notary in your location), or remote online notarization (RON) where available. If you have relocated before closing, discuss remote options with the title company early.
When do I get my money after closing?
Wire transfers typically arrive the same business day if closing occurs before the wire cutoff time (usually 2 to 3 PM). If you choose a cashier's check, you receive it at the closing table. I recommend wire transfer for amounts over $10,000 — it is faster and eliminates the risk of losing a check.
Can the buyer back out at closing?
Technically, a buyer can refuse to close, but they risk losing their earnest money and facing legal action for breach of contract. In practice, last-minute cancellations are rare once the loan is approved and the closing disclosure has been issued. The most common cause of last-day issues is lender delays, not buyer cold feet.
What if I still have a mortgage when I sell?
Your mortgage is paid off from the sale proceeds at closing. The title company obtains a payoff statement from your lender, deducts the payoff amount from the sale proceeds, and wires the payment directly. You do not need to pay off your mortgage before selling.
Do I owe taxes on the sale of my home?
If you have lived in the home for at least two of the last five years, you can exclude up to $250,000 in capital gains ($500,000 married filing jointly) from federal income tax. If your gain exceeds that exclusion, you pay capital gains tax on the excess. Tennessee has no state income tax on capital gains. Consult a tax professional for your specific situation.
Close With Confidence
I walk every seller through the closing process step by step — from the initial contract through the final wire transfer. No surprises, no confusion, and no last-minute scrambles. If you are thinking about selling in Coffee or Franklin County, let me show you exactly what the process looks like for your specific situation.
Contact me for a seller consultation →