How much are buyer closing costs in Knoxville, and what will I owe in Knox County property taxes?
Buyer closing costs in Knoxville typically run about 2–5% of the purchase price — roughly $6,500 to $16,250 on a $325,000 home — plus Knox County property taxes, which you’ll prorate at closing and then pay every year after.
Here’s the moment that catches almost every buyer off guard. You’ve saved for the down payment. You’ve been pre-approved. Then, a few days before closing on that house off Northshore or in Halls, the title company sends over your Closing Disclosure — and there’s a second stack of costs sitting on top of the down payment you already planned for. That stack is your closing costs, and if nobody walked you through it early, it stings.
I’m Hilmar Castillo, Realtor®/Broker at Castillo Realty, and I’d rather you see these numbers now — while you’re still planning — than at the closing table. This is the honest, line-by-line breakdown of what buyers actually pay in the Knoxville metro, including the two Tennessee taxes and the Knox County property tax that trip people up.
What are buyer closing costs in Knoxville?
Closing costs are the fees and taxes you pay to finalize the purchase — separate from your down payment. In Tennessee, buyer closing costs commonly land in the 2–5% of the purchase price range, according to mortgage lender JVM Lending. On a $325,000 Knoxville home — a common local price point, though the metro’s median sits closer to $410,000 as of mid-2026 per East Tennessee Realtors MLS data — that’s roughly $6,500 on the low end and around $16,250 on the high end.
That’s a wide range, and it’s wide for a reason: your loan type, your lender’s fees, how much you prepay into escrow, and any credits the seller agrees to all move the number. Treat 2–5% as a planning bracket, not a quote. The only exact figure comes from your Loan Estimate, which your lender must give you within three business days of your application.
The buyer’s line items, one by one
Most of what you’ll pay falls into three buckets: lender fees, title and closing fees, and prepaid items. Here’s what typically shows up for a Knoxville buyer:
- Loan origination fee — usually 0.5% to 1% of the loan, charged by your lender to process the mortgage.
- Appraisal fee — about $500 to $1,000+, paid so the lender can confirm the home is worth what you’re borrowing.
- Home inspection — roughly $250 to $500, paid during your inspection window (money well spent in an older-home market like ours).
- Title search and lender’s title insurance — commonly $500 to $1,000, to confirm clear ownership and protect the lender’s lien.
- Owner’s title insurance — optional but smart, often $300 to $700, protecting you against hidden title claims.
- Escrow / closing fee — the title company’s fee for handling the closing, frequently $300 to $600, often split with the seller.
- Recording fees — charged by the Knox County Register of Deeds per document recorded.
- Prepaid property taxes and homeowners insurance — your escrow account gets funded upfront, often a full year of insurance plus a few months of taxes.
These ranges come from JVM Lending’s Tennessee cost breakdown. Your actual figures will vary by lender and loan type, which is exactly why shopping more than one lender matters — more on that below.
The two Tennessee taxes buyers should know
Tennessee has no state income tax, but it does charge two taxes at the closing table, both collected by the county Register of Deeds when your paperwork is recorded:
- Realty transfer tax — $0.37 per $100 of the purchase price. On a $325,000 home, that’s about $1,203. The buyer is legally responsible for this one, though in practice it’s negotiable and sellers sometimes cover it.
- Mortgage tax (indebtedness tax) — $0.115 per $100 of the mortgage amount, with the first $2,000 of the loan exempt. This one usually lands on the buyer. On a $260,000 loan, that’s roughly $297.
Both figures are confirmed by JVM Lending and match Tennessee’s statewide rates. The good news: compared with a lot of the higher-cost states people relocate to Knoxville from, these are modest.
Knox County property taxes: what you’ll owe
Property tax works differently from a lot of states, so this is worth slowing down on. In Tennessee, your home is assessed at 25% of its appraised value for residential property — you’re not taxed on the full value. The Knox County rate is commonly cited at about $1.5540 per $100 of assessed value, per propertytaxrates.org.
Here’s the math on a $325,000 Knoxville home:
- Appraised value: $325,000
- Assessed value (25%): $81,250
- Annual county tax: $81,250 ÷ 100 × $1.5540 ≈ $1,263 per year
A couple of things to keep in mind. If your home is inside Knoxville city limits, you’ll also pay a separate city property tax on top of the county tax, so budget for both. And at closing, property taxes are prorated — you and the seller split the year’s tax based on who owns the home on which days. After that, it becomes an annual bill, usually folded into your monthly mortgage escrow.
A quick worked example
Say you’re buying a $325,000 Knoxville home with 20% down and a $260,000 loan. Your down payment is $65,000. On top of that, plan for closing costs somewhere in the 2–5% band:
| Item | Rough figure |
|---|---|
| Total estimated closing costs (2–5%) | $6,500 – $16,250 |
| — includes realty transfer tax | ~$1,203 |
| — includes mortgage tax | ~$297 |
| First-year property tax (prorated at closing) | ~$1,263/yr county |
The taxes and prepaid items live inside that 2–5% range, not on top of it. Your Loan Estimate breaks it all out, and I’ll sit down and read it with you line by line so nothing is a surprise on closing day.
How to keep your closing costs down
You have more control here than most buyers realize:
- Shop at least three lenders. Origination, underwriting, and processing fees vary a lot between lenders. Get a Loan Estimate from each and compare page 2 side by side — the current 30-year fixed rate was averaging about 6.8% as of early September 2026, per Freddie Mac, but the fees around that rate are where the real differences hide.
- Ask for seller concessions. Depending on the deal, a seller may agree to credit part of your closing costs — a real lever in the right negotiation.
- Look into assistance programs. Tennessee offers down payment and closing cost help, especially for first-time buyers. It’s worth a conversation before you assume you don’t qualify.
FAQ
How much are closing costs for a buyer in Knoxville?
Most buyers in the Knoxville metro pay about 2–5% of the purchase price in closing costs, or roughly $6,500 to $16,250 on a $325,000 home. Your exact number depends on your loan type, lender fees, and prepaid escrow, and it’s spelled out on your Loan Estimate.
What is the property tax rate in Knox County, TN?
Tennessee assesses residential property at 25% of its appraised value, and Knox County’s rate is commonly cited around $1.5540 per $100 of assessed value. On a $325,000 home, that works out to roughly $1,263 a year in county tax — with a separate city tax if the home is inside Knoxville city limits.
Who pays the transfer tax in Tennessee, the buyer or the seller?
The realty transfer tax of $0.37 per $100 of the purchase price is legally the buyer’s responsibility, though it’s negotiable and sellers sometimes cover it. Buyers also typically pay the mortgage tax of $0.115 per $100 of the loan amount.
Let’s map out your real numbers
The difference between a smooth closing and a stressful one is usually just knowing the numbers early. If you’re buying in Knoxville or anywhere across East Tennessee, I’ll walk you line-by-line through what you’ll actually bring to the closing table — before you’re standing at it.
Call or text Hilmar Castillo, Realtor®/Broker at Castillo Realty, at (865) 437-9539, or visit castillorealtytn.com to set up a buyer consultation. I serve buyers and relocation clients across the Knoxville metro, in English and in Spanish.
Talk soon,
Hilmar