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" as per existing law. It 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 according to the underwriting rules of the title insurance company.

Additionally, the bill prohibits sellers from requiring the use of a specific settlement agent or conditioning contract performance on such a requirement. These provisions cannot be waived or modified by any party involved in the transaction. However, sellers are allowed to retain an attorney to represent their interests in the transaction, with specific limitations on the attorney's role. Notably, the settlement agent cannot collect fees from a represented seller without the attorney's written consent. The act is set to take effect on July 1, 2025.