Are you ready to buy a home in Nashville? Home shopping can be a lot of fun and it should be. For some, it means relocating to a new city and the start of a new chapter in life or maybe you’ve just outgrown your current home. Whatever your reasons, if you’re thinking about buying a home in Nashville, there are a few things you should know that will help limit surprises along the way.
1. Nashville is Hotter than Prince’s Chicken
If you don’t know what Prince’s Hot Chicken is, then stop reading this and go visit the place that made Nashville known for this spicy delicacy. What could possibly be hotter? Nashville’s real estate market.
In a recent report by Auction.com, Nashville was rated as the #3 real estate market in the entire country. Only Denver and San Antonio were rated higher. This is due to a strong housing recovery, surging local economy and population growth. In fact, Nashville is growing at a rate more than double the national average. The suburbs aren’t too shabby either. The nearby town of Franklin, TN was just voted as America’s Best Small Town by Garden & Gun Magazine. Being popular is a great thing, but with more people looking to buy a home in Nashville, home prices are affected as well. This brings us to our next point.
2. This is a Seller’s Market
Due to its popularity, Nashville is currently experiencing what housing experts call a “seller’s market.” This means that it is typically more advantageous for home sellers than buyers because there is more demand for homes than there is inventory. During this period, homeowners can expect their homes to sell for more than they would during a buyer’s market.
In fact, in our latest market report, we saw the median home value rise over $25,000 from this time last year. If you are looking to buy a home in Nashville, most experts are predicting that home prices will continue to rise for the next few years and that the city will grow by 1 million more people in the next 20 years. With this in mind, if you are waiting for prices to come down before purchasing, you could be waiting quite some time and by that point, there’s a good chance interest rates will have risen.
3. If You’re Not First, You’re Last
So now that you know that there is limited housing inventory in Nashville, what can you do to ensure your chances of securing your next dream home? The first thing we do with all of our clients is set them up to receive email property alerts directly from the MLS. While websites like Zillow and Trulia are easy to navigate, many times there can be lag time for new properties to show up on their sites. In a hot market like Nashville, you want to be fast and hopefully first tforo view a property and this is exactly what the alerts from the MLS offer. Our clients receive home alerts as soon as properties are listed that meet their criteria, allowing them to move a little quicker if they see a home they like.
The other part to being able to react quickly is already having your finances in place. This means you will want to make sure you are pre-qualified before you begin your home search. With time being of the essence, you don’t want to have to wait for lender paperwork to submit your offer.
4. Multiple Offers
One of the reasons you want to be pre-qualified, is that there is a chance at some point in your home search that you could be involved in a multiple offer situation. Whenever you have a seller’s market, where there is limited inventory, the likelihood of this happening increases. Usually at this point the seller will ask for all the buyers involved to submit their highest and best offer within a certain timeframe. In these circumstances, we help guide our clients to creating the most appealing offer, whether it be removing special stipulations, not asking for closing costs or creatively wording the offer to maximize the bid. It’s also important to understand that many times the winning offer will be over asking price. If you are not willing to pay asking price or above for a home in a multiple offer situation, it may be best to move on to another property if this scenario presents itself.
5. Cheaper to Own vs Rent in Nashville
Although the shortage of home inventory continues to drive up home prices, we still find that it is cheaper to own than it is to rent in most areas of Nashville. However, you will want to verify HOA dues and property taxes, as these will affect the overall affordability of the home you are interested in. As long as interest rates continue to remain fairly low, home ownership in Nashville should continue to be more attractive than renting. The video below further expands on this argument.
6. School Districts
Great schools is one of the many reasons why the Nashville area is in such high demand. Neighboring Williamson County, which is home to the cities of Brentwood and Franklin, is regarded as having the best schools in the state. In downtown Nashville, there’s also Hume Fogg Magnet High School, which is ranked as the #48 high school in the United States according to U.S. News.
Finding a great school for your children is usually at the top of the list during the home buying process. If you’re looking to buy a home in Nashville and this is a priority of yours, you can view homes by school district here. One thing to keep in mind is that school districts can change over time. It’s always wise to call the school directly to confirm that the house you intend to buy is located in that district before submitting an offer.
7. Deals Are Harder to Come By
A few years ago, you could find a foreclosed home on what seemed like every street in the U.S. These days you may still be able to find a few in the Nashville area, but they are quickly becoming scarce, especially in the more desirable neighborhoods like 12 South. This is something to keep in mind if you are moving from a city that still has a high rate of foreclosures, where great deals are easy to come by. If you go into the buying process with the correct expectations that these types of properties are the exception and not the norm, then it will limit your frustrations and allow you to make more informed decisions when buying a home in Nashville.
8. Differences in the Closing Process
If you have closed on a home in a different state, don’t be surprised if some of the closing processes in Tennessee are a little different than what you are used to. When we meet with our clients, we like to provide them with a detailed outline of the closing process and contract verbiage, because not all states do everything the same way.
One very important item we touch on, is that in the state of Tennessee, the Seller does not have to grant the buyer an extension to the closing for any reason. This means that you must close on the date designated in the agreement or you are in breach of contract. Some states have provisions in their contracts that give the buyers the ability to push back the closing if the occasion arises. This is not the case in Tennessee, which is why we monitor our transactions very closely and suggest working with a lender who responds quickly and that has a proven track record of closing on time.
Another difference, although nothing to be concerned about, is that buyers and sellers in Tennessee close at different times. Many states will have both parties close at the same time, in the same room. This can sometimes lead to an unpleasant experience if they did not get along during the closing process. If you buy a home in Nashville, you don’t have to worry about this being an issue.
9. Know Your Environment
No matter where you call home, the environment plays an active role on a home, so it’s important to be aware of certain environmental conditions that are common to that area. In the Nashville area, there’s a few things you can do to make sure you and your family are protected.
One of these is having a radon test performed during the inspection period. Because there is no shortage of rock in Nashville, it is important to have your home tested for radon, which is a radioactive gas emitted from certain rocks. The recommended radon levels is usually no higher than 4.0 pCi/L.
Another important item we suggest, is having a termite inspection performed on the property. If termites are present or there is evidence of past intrusion, you will want to investigate further or ask the seller to remediate the issue.
Also, as is the case with many areas across the country, parts of Nashville are not immune to flooding. With this in mind you will want to check whether a property lies in a flood plain. If this is the case, you will more than likely be required to carry flood insurance on that home.
10. Get a CLUE…..report
Throughout the course of a homes’s life, there are bound to be certain issues that come up. For an added piece of mind, Patrick Crider, CEO of Fieldstone Insurance Group, suggests getting a C.L.U.E. report done, which is basically like a Carfax for homes that shows all of the insurance claims made against that property. He states that “CLUE reports can give indication to ongoing problems with a house. For example, multiple water damage claims could mean that there are persistent problems with the plumbing system.” He went on to say that “most CLUE reports will show 5 to 7 years of claim history.” While you’re not guaranteed to catch every issue a home may have, this added layer of due diligence can help prevent some surprises in the future.
As one of the hottest real estate markets in the country, you’ve made a great choice to buy a home in Nashville. The growth of the city and surrounding areas should continue to outpace the national average, only strengthening our local economy and housing market. By keeping the above pointers in mind, you should be more prepared for the home buying process and hopefully eliminate most surprises that come your way.
Ready to Start the Process?
Feel free to reach out to us if you’re ready to start the home buying process or if you have any questions about the Nashville area.