Senate Bill 394 amends Tennessee law regarding real property transactions by establishing the exclusive right of purchasers or borrowers to select their settlement agent, subject to approval by mortgage lenders, brokers, or servicers. The bill defines key terms such as "mortgage lender," "mortgage loan broker," and "mortgage loan servicer," and outlines the responsibilities of the selected settlement agent, which include providing escrow or closing services, acting as the issuing title insurance agency, and ensuring the necessary documentation to clear title is produced. Additionally, the bill prohibits sellers from requiring the use of a specific settlement agent or conditioning contract performance on such requirements.

Furthermore, the bill allows sellers to retain an attorney to represent their interests in the transaction, specifically for legal advice related to escrow or closing services. However, the settlement agent cannot collect fees from the seller without the written consent of the seller's attorney. The provisions outlined in the bill cannot be waived or modified by any party involved in the transaction. This act is set to take effect on July 1, 2025.