Are you ready to embark on the exciting journey of the Home Buying Process in Tennessee? Whether you’re a first-time buyer or a seasoned homeowner, understanding the home buying process is crucial. In this guide, we’ll walk you through the key steps to make your Home Buying Process in Tennessee experience smooth and successful. You can also Download a full version in more detail.
Step 1 - Find The Right Agent
Buying a home is one of the most significant purchases in a lifetime. It is essential to have an experienced agent in your corner, always looking out for your best interest. A buyer agent’s fiduciary responsibility is to represent the buyer and to ensure that they are protected.
After all, a seller has someone in their corner. A listing agent has an allegiance to the seller. Their goal is to get the seller top dollar for their home. There is incredible value in having someone working for YOUR BEST INTERESTS when buying a home.
Step 2 - Prepare Financing
Mortgage lenders recommend you do not buy a home that is more than 3 to 5 times your annual household income. If you are not purchasing a home with cash, you will need a mortgage pre-approval provided by your mortgage lender. A lender will work with you to get a loan that meets your needs. Some buyers are concerned with keeping their monthly payments as low as possible, others want to make sure that their monthly payments never increase.
Check Your Credit
A mortgage requires a good credit score. You can improve your score by:
- Paying down credit card balances
- Continuing to make payments on time
- Avoid applying for a new credit card or car loan until you have been approved
- Avoid making big purchases until you have been approved
- If possible, avoid job changes until you have been approved
Down Payment & Other Expenses
In order to make your dream of buying a home a reality, you will need to save cash for your down payment, earnest money, closing costs & home inspector.
- A Down Payment is typically between 3.5% & 20% of the purchase price
- Earnest Money is money you put down to show you’re serious about purchasing a home. It’s also known as a good faith deposit.
- Closing Costs for the buyer run between 2% & 5% of the loan amount
- A Home Inspection costs $300 to $500
Step 3 - Get Pre-Approved
Being pre-approved, unlike being pre-qualified, means you’ve actually been approved by a lender for a specific loan amount. You will need to provide documented financial information (income, statements, assets, debt & credit reports, etc.) to be reviewed & verified by the lender.
Step 4 - Start Your Home Search
Time to start shopping! We will take notes on all the homes we visit. It can be hard to remember all the details of each home, so take pictures or videos to help you remember each home, and review the notes you have written. Once we have found THE house for you, we will present an appropriate offer based on recent sales and current buyer activity in the area, as well as the value of the property in its current condition. Negotiations may take place after the offer is presented.
Step 5 - Make An Offer
So you have found THE house! Congrats! In today’s market when the demand is higher than the amount of homes available it is important to act fast!
How Much To Offer?
We will sit down and look at recent sales and current buyer activity in the area, as well as the value of the property in its present condition. Putting all this information together, we will determine the price that you would like to offer.
Step 6 - Order An Inspection
During the inspection period, we will schedule an inspection with a reputable home inspector to do a thorough investigation of the home. Once this is complete, the inspector will provide us with a list of their findings. You can take the issues as-is or request the seller to address some or all of the findings. We will be mindful and reasonable on smaller items while being very cautious and vigilant of potentially significant issues.
Step 7 - Negotiate Final Offer / Repairs
Issues typically arise after the home inspection, and those issues tend to result in another round of negotiations for credits, fixes / repairs and if all else fails evern a lower price.
Repair Credits
Ask for credit for the work that needs to be done.
Likely, the last thing the seller wants to do is repair work.
Don't Loose Focus
Think “big picture” and don’t sweat the small stuff.
A tile that needs some caulking or a leaky faucet can easily be fixed. Repairs are still up for negotiation and perhaps a small credit would help with closing costs.
Poker Face
Keep your poker face.
Remember somethings could come back to haunt you in further discussions or negotiations.
Step 8 - Appraisal Ordered
Your lender will arrange for a third party appraiser to provide an independent estimate of the value of the house you are buying. The appraisal lets all parties involved know that the price is fair. The loan file then moves on to the mortgage underwriter.
If approved you will receive your final commitment letter that includes the final loan terms & percentage rates.
Property Title Search
This ensures that the seller truly owns the property and that all existing liens, loans or judgments are disclosed.
Home Owners Insurance
You’ll need insurance for the new home before closing. This will protect against things like fire, storms, and flooding
Step 9 - Scheduling Your Move
Scheduling your move can be a daunting task and should start shortly after you have an accepted offer in a phased approach:
- Declutter! Sort through every drawer, closet, cupboard & shelf, removing items you no longer need or like. Donate or sell items that are in good condition
- Get copies of medical records and store them with your other important documents
- Create an inventory of anything valuable that you plan to move
- Get estimates from moving companies
4 Weeks To Move
- Give 30 days notice if you are currently renting
- Schedule movers/moving truck
- Buy/find packing materials
- START PACKING
3 Weeks To Move
- Arrange Appraisal
- Complete title search (Title company will do this)
2 Weeks To Move
- Secure Home Warranty
- Get quotes for home insurance
- Schedule time for closing
- Contact utility companies (water, electric, cable)
- Change address: mailing, subscriptions, etc.
- Minimize grocery shopping
- Keep on packing
1 Weeks To Move
- Obtain certified checks for closing
- Schedule and attend a final walkthrough
- Finish packing
- Clean
- Pack essentials for a few nights in new home
- Confirm delivery date with the moving company. Write directions to the new home, along with your cell phone number
Step 10 - Closing Day
Closing is when you sign ownership and insurance paperwork and you receive your new home’s keys! Typically, closing takes four to six weeks. During this time, purchase funds are held in escrow, where your money is held safe until the transaction is complete.
Closing Disclosures:
Lenders are required to provide you with a closing disclosure, at least three days before closing. This will show you what your final loan terms and closing costs will be. You will have three days to review the statement. This is done to ensure that there are no surprises at the closing table. If there is a significant discrepancy between the loan estimate and the closing disclosure, we must notify your lender and title company immediately.
Closing Table:
The closing typically happens at the title company. You will be signing lots of paperwork so get your writing hand warmed up! Some of the papers you will be signing include: the deed of trust, promissory note, and other documents
Who will be there? “Typically”:
- Your agent
- A title company representative or real estate attorneys involved in the transaction
- Your loan officer
Closing Cost:
Closing costs can vary depending on your home’s purchase price and where you are located. You can generally expect your closing costs to be around 3% to 4% of the home’s sales price. These closing costs can sometimes be shared with the seller.
Bring To Closing:
- Government-issued photo ID
- Copy of the sales contract
- Homeowner’s insurance certificate
- Funds to cover the remainder of the costs
Congratulations
It was a lot of hard work but you are now Officially Homeowners!! Time to throw a party and get to know your new neighbors!
