Home Buying 101

You read the headlines and see the news. It’s everywhere.

And studies have shown why mainstream media outlets focus on negative stories. Surprise, surprise: it’s all about ratings.

Fear can be a powerful tool used to erode people’s trust. As city planners and local governments try to accommodate affordable housing needs, the barrier to entry for renters and first-time home buyers can feel insurmountable.

Before we dig into the history of discrimination tactics and antitrust violations used to exclude certain individuals from participating in real estate (a post for another day), the truth is that the gap between median household income and average home prices has continued to grow at an alarming rate.

While we can’t rewrite the past, we can improve the future. And the good news is that buying a home in 2022 is a completely different ballgame than 50 years ago. We finally have a level playing field for everyone.

Here are some best practices for buying a home in 2022.

Find a REALTOR®

Selecting a trusted professional that guides you through the home buying process will help ensure that your most important financial decision is secure. Complex clauses, detailed disclosures and negotiating repairs during the inspection period are all par for the course. We know the ins and outs of contracts and can help you navigate various contingencies so that deadlines are met and you are protected.

Not all real estate agents are REALTORS®. REALTORS® are licensed real estate professionals that are required to adhere to a code of ethics and are bound to strict fiduciary responsibilities. The Tennessee Real Estate Commission (TREC) is responsible for ensuring valid licensure for agents and brokerages. They also offer consumer protection to the public in real estate transactions.

Beware of iBuyer and guaranteed accepted offer programs. If it sounds too good to be true…

Research Your Market

Today, prospective home buyers have access to online databases filled with property information at their fingertips. Whether you are casually browsing Zillow while watching HGTV or have multiple MLS alerts setup in your target neighborhoods, having a list of wants and needs is great – but don’t miss the forest for the trees. It is important to have an accurate and realistic understanding about your preferred areas. 

Consider your lifestyle, hobbies, goals and dreams. Pay close attention to the exterior appearance of other homes throughout the neighborhood. Are they well maintained? Is there enough parking? How is the street traffic? Are there sidewalks? What about light and noise pollution? How far are the nearest parks, schools or emergency services? What about public transportation? These are questions you may not think of simply looking at photos of online listings.

Your agent will also be able to provide you with data and statistics that help you stay informed about what has recently sold and for how much. We may even have information on off-market / pocket sales!

Verify Financial Documentation

There are many ways to finance the purchase of a new home. Whether you are paying all cash or financing any portion of the transaction, you need to understand exactly what you can afford on a down payment and your monthly mortgage payments. 

Understanding your financing options can help you make the right decision. Begin gathering financial documents that a lender will need to pre-approve your loan amount.

• W2s

• Tax Returns

• Credit Score

• Bank Statements 

• Other Investments (Real Estate, Art, Retirement Accounts, Cryptocurrency)

Consider working with a local financial institution over large corporate entities. A mortgage loan officer will pull your credit report to confirm your net worth. It’s nice to have a face and a name of someone you can call when you have questions.

Regardless of your financing source, many contracts today will require submitted offers to have an accompanying letter of pre-approval or proof of funds. This has become standard practice in the middle Tennessee market.

Viewing Properties & Submitting Offers

Now the fun really begins. Take everything you have learned up to this point and put it into practice. You have earned every right to be here!

• Don’t Overlook Functional Details – window casings, door frames, hinges, hardware, fixtures, plumbing, etc.

• Do Overlook Cosmetic Design – paint color, furniture, decorating, clutter, poor landscaping, etc.

• Don’t Assume Everything Conveys – understand the difference between fixtures and personal property

• Do Trust the Inspection / Repairs Process – leave the structural details to a professional

Use the special stipulations section of the contract to spell out any uncertainties not covered in the public/private remarks for items you wish to convey. Create a paper trail of any previous correspondence to keep records of any changes to the MLS listing and be sure to get a home appraisal.

Closing Time

With most of the hard work complete, you are almost ready to move into your new home. Your REALTOR® will be the point of contact between you and the rest of the individuals working behind the scenes.

Our job is to make sure you close on time and that there are no surprises. Your lender will arrange for a title company to coordinate the final paperwork (including loan documents) to sign on closing day. Don’t schedule a closing date for Mondays or Fridays and beware of bank holidays that may affect your timeline. 

Once the seller has received a check, the keys are all yours. Congratulations!