Buyer’s Guide
Every dollar from offer to keys in Clarksville & beyond — earnest money, inspections, Tennessee’s transfer taxes, prepaids, and a full sample cash-to-close breakdown.
Most buyers know they need a down payment. What surprises people is everything around it — the earnest money, inspection, appraisal, lender fees, title work, prepaid taxes and insurance, and Tennessee’s own recording taxes. Add it up and these closing costs typically run about 2% to 5% of the purchase price on top of your down payment.
This guide walks every dollar in the order you’ll spend it — from the day you write an offer in Clarksville and Montgomery County (or across the line in Oak Grove and Christian County, Kentucky) to the day you get the keys. Figures reflect mid-2026; your actual numbers depend on price, loan type, lender, and the property.
Tennessee charges a realty transfer tax of $0.37 per $100 of the price (about 0.37%) plus a mortgage / “indebtedness” tax of $0.115 per $100 of the loan amount (the first $2,000 of the loan is exempt). Kentucky’s deed transfer tax is lower — about $0.50 per $500, or roughly 0.1% — and KY charges no mortgage tax. Who pays what is negotiable in the contract.
These costs come out of pocket during the process — some are credited back to you at closing, and some aren’t.
| Cost | Typical Range | Refundable / Credited? |
|---|---|---|
| Earnest money deposit | 1%–2% of price | Credited toward your costs at closing |
| Home inspection | $350–$600 | No — paid up front, yours to keep |
| Appraisal | $500–$750 | No — paid to the lender’s appraiser |
| Optional inspections (radon, termite, septic) | $100–$500 each | No |
Earnest money is your good-faith deposit that goes into escrow when your offer is accepted. It’s not an extra cost — it’s applied to your down payment and closing costs at the table. The inspection and appraisal are true sunk costs, but they’re the cheapest insurance you’ll buy: they protect you from overpaying or inheriting a hidden problem.
How much you put down depends entirely on your loan. Here’s how the common options stack up in our market:
| Loan Type | Minimum Down | Mortgage Insurance? |
|---|---|---|
| VA (eligible service members & veterans) | $0 | None — no monthly PMI |
| USDA (eligible rural areas) | $0 | Annual guarantee fee |
| FHA | 3.5% | Yes — monthly MIP |
| Conventional | 3%–5%+ | PMI until ~20% equity |
With Fort Campbell next door, the VA loan is one of the most-used programs in our market — $0 down and no monthly mortgage insurance. USDA can also be a powerful $0-down option in much of Christian County, KY and the more rural parts of Montgomery County, TN. We’ll help you see which programs your target neighborhoods qualify for.
Closing costs fall into three buckets: lender fees, third-party services, and government taxes and recording. Here’s what shows up on a typical Closing Disclosure.
| Closing Cost | Who / What It’s For | Typical Amount |
|---|---|---|
| Loan origination & underwriting | Your lender, to process the loan | 0.5%–1% of loan |
| Discount points (optional) | Buy down your interest rate | 1% per point |
| Lender’s title insurance | Protects the lender’s interest | Varies by price |
| Owner’s title insurance | Protects you (often seller-paid in TN) | Varies by price |
| Title / settlement / escrow fees | Closing agent or attorney | $400–$900 |
| TN realty transfer tax | $0.37 per $100 of price | ~0.37% of price |
| TN mortgage (indebtedness) tax | $0.115 per $100 of loan (first $2k exempt) | ~0.115% of loan |
| Recording fees | County Register of Deeds / Clerk | ~$150 |
| VA funding fee (VA loans only) | One-time, often financed; exempt w/ disability | 0%–3.3% of loan |
In many Middle Tennessee residential deals, the seller customarily pays the realty transfer tax and the owner’s title policy, while the buyer covers the mortgage tax and lender-related costs — but everything is negotiable in the contract. In a buyer-friendly market, we often negotiate seller concessions to cover a chunk of your closing costs.
These aren’t really “fees” — they’re costs of ownership you pay slightly early so your escrow account starts funded. Your lender collects them at closing.
| Prepaid Item | What to Expect |
|---|---|
| Homeowners insurance | First year’s premium up front, plus 2–3 months into escrow |
| Property tax proration | Reimburse the seller for taxes / fund escrow. TN effective rate is low (~0.5–0.7%) |
| Prepaid interest | Interest from your closing date to month-end |
| Initial escrow deposit | A cushion the lender holds for future tax & insurance bills |
Here’s a simplified, illustrative example for a $350,000 purchase in Clarksville comparing a VA buyer and a conventional buyer. These are estimates to show the shape of the numbers — your real figures will differ. Rates as of June 2026 have been running in the low-to-mid 6% range for conventional loans and often a bit lower for VA.
| Line Item | VA, $0 down | Conventional, 5% down |
|---|---|---|
| Down payment | $0 | $17,500 |
| Loan amount | $350,000 | $332,500 |
| Earnest money (credited) | applied | applied |
| Lender + third-party fees (est.) | ~$3,500 | ~$3,500 |
| Title & settlement (est.) | ~$1,200 | ~$1,200 |
| TN transfer tax (~0.37%)* | ~$1,295 | ~$1,295 |
| TN mortgage tax (~0.115% of loan) | ~$402 | ~$382 |
| Recording fees | ~$150 | ~$150 |
| Prepaids & escrow (est.) | ~$3,500 | ~$3,500 |
| VA funding fee (2.15%, financeable) | ~$7,525 | n/a |
| Est. cash to close (excl. financed fee) | ~$10,000–$11,000 | ~$27,500–$28,500 |
*Transfer tax is often a seller cost by local custom; shown here for completeness. The VA funding fee can be rolled into the loan rather than paid in cash, and a disability-exempt buyer pays $0. Seller concessions, lender credits, and your specific lender’s fees will all move these numbers.
Plan for your down payment plus roughly 2%–5% of the price in closing costs and prepaids — then look for every legitimate way to reduce the cash you bring: a $0-down loan, seller concessions, lender credits, and funding-fee exemptions. That’s where having the right agent and lender in your corner turns into real dollars saved.
Every home and every buyer is different. I’ll connect you with a trusted local lender for a personalized estimate, then build a buying strategy that minimizes your cash to close — whether you’re using a VA loan near Fort Campbell, going conventional in Clarksville, or looking at USDA-eligible areas in Christian County. No pressure, no obligation — just clear numbers.
Search Homes for SaleOr call or text Casey directly: 270-498-2232This guide is provided for general educational purposes and reflects market conditions, tax rates, and loan-program figures as of June 2026. It is not legal, tax, financial, or lending advice. Real estate taxes, closing costs, loan terms, and rates change frequently and vary by property, lender, and individual circumstances. Confirm all figures with your lender, closing attorney or title company, and a qualified tax professional before making decisions. Casey Brown is a licensed real estate broker in Tennessee and Kentucky with Keller Williams Realty. Each Keller Williams office is independently owned and operated. Equal Housing Opportunity.