Buying Your First Home in Tennessee? Here’s Everything You Need to Know
Steps in Your Tennessee Homebuying Process
Introduction
Looking to buy your first home in Tennessee?
Congratulations on the milestone achievement. Tennessee is among the fastest-growing cities in the country, surrounded by scenic Knoxville and historic Memphis.
From modern amenities to a welcoming community and a budding real estate market, the state has plenty of opportunities for homebuyers. What’s more? The no-income tax aspect of living in Tennessee is another reason that it has become the go-to option for individuals around the area.
Our guide takes a closer look at the different aspects of home ownership in the area. So, continue reading as we learn more about the process in this Tennessee first-time homebuyer guide.
The Tennessee Homebuying Process In Detail
Before buying a house in Tennessee, you need to get equipped with the correct details, funds, and several other information to get started. Here’s a detailed step-by-step guide to help you find the perfect home.
» Step 1: Save for A Down Payment
Your down payment is the initial portion of your home’s purchase price that you will pay at closing. Your mortgage lender will pay the outstanding debt.
A down payment might be up to 20% of the home’s total price. If you put less money down, your mortgage lender will usually need you to obtain private mortgage insurance (PMI) for the loan. This may save you money up front, but it may increase your monthly mortgage payment and overall interest payments throughout the loan’s term.
However, if you cannot afford to put that much down at closing or want to save more money for other home-buying expenditures, specific government-backed lenders provide lower down payment mortgage choices.
» Step 2: Compare Down Payment Assistance Programs
If you are experiencing difficulty purchasing a house, there are many DPA (Down Payment Assistance) programs available to simplify the first-time home buyer process throughout Tennessee. These programs provide qualifying homeowners a grant or second mortgage to aid with closing expenses or down payments.
- Federal Housing Administration (FHA) loan: Offers 3.5% and 10% down payment alternatives, depending on whether you match FHA mortgage application standards.
- VA loan: Only qualified U.S. veterans and active-duty military service members are eligible for VA loans. These loans require zero down payment or private mortgage insurance.
» Step 3: Find A Trusted Real Agent
Whether you’re actively looking for a home or just getting started, it’s never too early to locate a top realtor in Tennessee to help you along the way. When purchasing a home, a skilled realtor can assist you in navigating a challenging local market, exploring your financial choices, and negotiating the best possible offer.
In addition to discovering and showing you houses, your real estate agent will assist you with making offers, negotiating contracts, and navigating the closing process. In addition, they can recommend additional service providers (such as title firms and inspectors) to buy your home in Tennessee.
Quick Tips to Select the Ideal Real Estate Agent
When selecting a realtor, consider their local expertise and closeness to the locations you’re interested in. You might begin your search by looking up a brokerage or real estate, but don’t stop there. Take the time to study and interview numerous real estate agents, paying special attention to:
- Years of experience (average of 8 years)
- Online reviews and complaints.
- Number of house purchasers aided in the previous year.
- Licensing and certification in the specific area.
- Expertise in your chosen location and within your preferred pricing range.
» Step 4: Get Pre-approved for A Mortgage
Mortgage pre-approval is the stage where your lender is ready to lend you the money to purchase a property.
Most sellers in Tennessee will need a mortgage pre-approval letter before showing you their house. It demonstrates your financial ability to make an offer and may give you an advantage over other buyers when purchasing Nashville homes for sale.
Pre-approval is a more in-depth financial study than pre-qualification and represents a lender’s formal commitment. It may be as simple as a 40-minute phone conversation with your mortgage broker or lender, a credit check, and providing evidence of funds. When you place an offer on a home in Tennessee, you will begin the initial mortgage application.
» Step 5: Start House Hunting in the Area
Searching for houses in Tennessee is the most enjoyable aspect of the home-buying process! You’ll be able to browse a range of available properties and choose what you want in a property. However, before you begin house hunting, it is essential to decide the perfect time to purchase your dream house in Tennessee, depending on your preferences.
When searching for a property in Tennessee, consider the entire cost of ownership, not just the monthly mortgage payment. Other potential expenses of owning a house include upkeep and repairs, HOA fees, property taxes, and homeowners’ insurance.
Once you’ve determined what you’re looking for, your agent will search for houses on your local Multiple Listing Service (MLS), present you with top choices, and book viewings and tours.
» Step 6: Make an Offer for the Property
When you locate a home in Tennessee that you adore, it’s time to submit an offer. Your real estate agent will assist you in creating a compelling offer that will maximize your chances of influencing the homeowner to sell.
Your offer may include an earnest money deposit, which typically ranges from 1% to 2% of the purchase price. It serves as an incentive for sellers to remove the house from the market until the closing date. If the transaction goes through, the earnest money will be used as your down payment, so you will not have to pay any further fees.
The pace at which you make your offer is frequently determined by how quickly the home for sale in nashville market moves and how many properties are currently available.
» Step 7: Inspections, Appraisals, and Financing
Once the seller accepts your initial offer, you must conduct due diligence before legally acquiring the property. Buyers request home inspections to thoroughly assess the house’s condition, while lenders use appraisals to estimate value and the final loan amount.
The pace at which you make your offer is frequently determined by how quickly the buy home in Nashville market moves and how many properties are currently available.
» Step 8: Close On Your New Home!
Final walk-through
Before closing on your new house, you and your real estate agent will have a final walk-through to check that the property is still in the expected condition. You should check to ensure:
- The appliances are in functioning order.
- A no-objection certificate to authenticate that there were no damages when the seller moved out.
- The vendor completed any agreed-upon repairs.
Closing Day
On the closing day, you will meet with the title firm to go over all of the relevant documentation. You will have to read and sign various documents, including:
- The final loan application.
- Various disclosures.
- The deed transfer
Before signing anything, ask your agent or closing attorney any questions you may have to ensure that you understand each agreement properly.
Conclusion
Having professionals by your side can simplify the process of buying your first home in Tennessee. It helps you eliminate the hassle of doing everything alone and allows you to invest in the best properties first.
Ready to buy your first home? Connect with our best real estate agents in nashville tn.
