Buying · Middle Tennessee
Buying your first home in Middle Tennessee
Nobody is born knowing how this works, and the parts that cost people money are almost never the parts they were worried about. This is the whole process in order, with the places it usually goes wrong.
Start with the lender, not the houses
It is more fun to look at houses and it is the wrong order. A pre-approval tells you what you are actually working with, and in a market where good listings move quickly, an offer without one is usually not taken seriously.
Talk to more than one lender. Rates and fees are not identical between them, and the difference over thirty years is not small. I am not a lender and I will not tell you what you can afford, but I will tell you what to ask them.
- What is the interest rate, and what is the annual percentage rate, which includes the fees
- What are your lender fees, itemized, in writing
- What loan types am I eligible for, and what does each require as a down payment
- Is this pre-approval underwritten, or is it a pre-qualification based on what I told you
- How long does it take you to close, in practice, not in theory
The costs nobody mentions until they arrive
The down payment is the number everyone plans for. It is rarely the number that catches people out.
Budget separately for the earnest money deposit, which goes in when your offer is accepted, the home inspection, an appraisal if your lender requires one, and closing costs. On top of that you will prepay some property taxes and homeowners insurance into an escrow account. And if you buy in a neighborhood with an association, there are dues and often a transfer fee.
None of these are hidden, exactly. They just tend to be explained one at a time, right before each one is due.
The inspection is where I earn my keep
This is the part of the process where having built and renovated actually changes the outcome for you. An inspection report is a long list of findings with no sense of scale, and a first-time buyer reads it and panics about the wrong things.
What matters is the age and condition of the systems, the roof, the heating and cooling, the water heater, and any evidence of water where water should not be. Cosmetic items are negotiating material at best. I have seen what gets covered up because it was faster and cheaper to cover it than fix it, and I know where to look.
Down payment assistance is worth asking about
Tennessee runs down payment assistance programs through the Tennessee Housing Development Agency, and there are other programs tied to particular professions and to certain areas. Eligibility rules change and I am not going to publish figures here that will be stale by the time you read them.
What I will do is tell you these exist and that they are worth asking your lender about directly, because a lot of buyers never do and never find out they qualified.
Common questions
How much do I need for a down payment?
It depends entirely on the loan type, and I am not the right person to answer it, which is the honest answer. Different loan programs have very different requirements, and there are assistance programs on top of that. A lender can tell you in an afternoon what you actually qualify for. Talk to two of them, and then we go look at houses.
Does it cost me anything to work with you as a buyer?
That is a conversation worth having plainly and early, and the rules around how buyer agents are paid have changed, so anything you read from a few years ago may be wrong. We put it in writing before we start looking so there are no surprises, and everything about it is negotiable.
What if the inspection turns up problems?
Most inspections turn up problems, because most houses have some. The question is which ones are structural or expensive and which ones are noise, and that is exactly what I am reading the report for. Then we decide whether to ask for repairs, ask for a credit, or walk. All three are legitimate outcomes.
How long does the whole thing take?
From an accepted offer to closing is typically a few weeks and it depends heavily on your lender, which is one of the reasons I tell you to ask them how fast they actually close. Finding the right house takes as long as it takes, and I would rather that part run long than have you buy something to be finished.
The bottom line
You do not need to understand all of this before you start. You need somebody who does, and who will slow down and explain it rather than making you feel behind.