Buying a house is a major purchase. Before making this important decision, take the time to determine what you can afford, your ideal neighborhood, and what features you want in a home. And understand the legal issues involved in residential real estate transactions, such as seller disclosures, purchase contracts, potential title defects, and zoning issues. With proper preparation, careful choice of a real estate agent and other qualified professionals, buying a home in Tennessee can be a positive experience.
Before buying a house, condo, or other home in Tennessee, contact a real estate agent who can help you find your home and handle all the complex procedures involved with the purchase. Some of the benefits of working with an agent include the following:
Your agent should be able to help you every step of the way, from drafting your written offer and negotiating with the seller on price and other key terms to coordinating the escrow process and house closing. Your real estate agent should also help you locate other professionals to assist you in the homebuying process, including mortgage brokers and home inspectors.
And the good news is that working with a real estate agent won’t cost you anything. The seller usually pays the entire real estate commission (typically 5% to 6% of the house sale price, split between the seller’s agent and yours).
The best way to select a real estate agent is usually through personal referrals. You’ll also want to do your own research. To find licensed Tennessee real estate agents, check the Tennessee Department of Commerce and Insurance’s Licensee Info Search. Other useful resources include real estate websites such as Zillow and Trulia which have customer reviews of real estate agents.
State law in Tennessee (Tennessee Code Sections 66-5-202 and 66-5-210) requires that sellers provide buyers a disclosure form (unless you waive this and agree to purchase the property “as is”). To assist sellers in meeting their disclosure responsibilities, the Tennessee Association of Realtors offers a disclosure form, which includes details on the property, including:
In addition to state-required disclosures, sellers of houses built before 1978 must comply with federal Title X disclosures regarding lead-based paint and hazards. See the lead disclosure section of the EPA’s website, for details.
Seller disclosures are important for you as a buyer, since just looking at a property may not be enough to tell you what problems its owner encountered with it while living there.
You should not rely only on the seller's disclosures. Most savvy buyers hire an independent home inspector to verify the information from the seller's disclosure. And you will probably want to make your offer contingent upon a satisfactory inspection report to be sure no material defects exist and to identify the following:
See Reasons to Get a Pre-Closing Home Inspection for more details.
A purchase agreement is a legal document that contains the material terms and conditions of your real estate transaction. It must be in writing and signed by the parties (buyers and sellers) to the contract, and include an offer to sell or purchase, an acceptance of the offer, the sale price, and an adequate description of the property. See the Tennessee Association of Realtors Purchase and Sale Agreement for a sample.
A buyer should always obtain a title search from a title company before purchasing a home. The title company searches public records and other sources for any liens, easements (such as the utility company’s right to access part of the property), or other encumbrances or title restrictions that may affect the property. If the title search locates problems, the buyer should require the seller to correct those problems as a condition to closing.
You should also consider purchasing a title insurance policy to protect the title to the property against adverse claims by third parties, or any clouds on the title missed by the title search. Mortgage companies usually require buyers to purchase a title insurance policy in connection with obtaining a mortgage.
For more details on title insurance, escrow, and closing, see Sandy Gadow’s website, Buying, Selling, and Closing Simplified, which includes a state-by-state guide to closing practices.
Unlike some states, Tennessee does not require that buyers involve a lawyer in the house-buying transaction. Even if it’s not required, you may decide to engage a lawyer at some point in the process—for example, if you are buying property in a planned unit development with extensive CC&Rs or you are purchasing a house in foreclosure. Or, you may want a lawyer’s help if problems show up during escrow or the house closing.
Check out Nolo’s Lawyer Directory, to find an experienced real estate attorney in Tennessee.
The Buying a House section on Nolo.com includes a variety of useful articles on all aspects of the house buying process, including advice on getting a mortgage, figuring out what price, contingencies, and other terms to offer, arranging home inspections, and closing the deal.
For detailed information on every phase of buying a home, from figuring out your needs and what you can afford to doing the final walkthrough and attending the closing, see Nolo’s Essential Guide to Buying Your First Home, by Ilona Bray, Alayna Schroeder, and Marcia Stewart.
