Summary

The thrill of buying a home in Tennessee is just as exciting, whether you’re a first-time buyer or on the hunt for your next dream home.

Tennessee offers a low-priced housing market, with prices ranging around $316,335. There is no state income tax, and there are booming job opportunities. Thus, it is the go-to place for modern investors and traditional homeowners.

What’s more? The state also offers welcoming, picturesque, smoky mountains that perfectly combine natural beauty, culture, and economic growth, making it one of the best places to buy a home.

This guide will walk you through every step, from setting a budget and securing a mortgage to finding the right neighborhood and closing deals for tennessee franklin homes for sale.

Whether you are attracted to Tennessee by its low cost of living, strong communities, or growing industries, this guide will equip you with the knowledge and confidence to purchase a smart home.

8 Steps to Buying A House in Tennessee

Step 1: Assess Your Financial Readiness

Before buying a home, it’s crucial to evaluate your financial health. This step ensures you’re financially prepared and minimizes surprises.

Check Your Credit Score

Your credit score is central to your mortgage approval. The higher the score you obtain, the better interest rates you will get, and for lesser scores, you may end up paying more or getting rejected. So check your scores early, pay off those debts, and make regular payments if necessary.

Set a Budget

Knowing what you can afford prevents financial strain. Consider:

• Monthly mortgage payments – Ensure they fit within your income.

• Property taxes – Vary by location, so research local rates.

• Homeowners insurance – A necessary expense that adds to your costs.

• Other expenses – Utilities, maintenance, and possible HOA fees.

Save for a Down Payment

The typical down payment in Tennessee varies, but many lenders expect 5% to 20% of the home’s price. Government-backed loans, like FHA or VA loans, may allow lower down payments.

Consider Closing Costs

These fees cover loan processing, inspections, and legal paperwork. In Tennessee, closing costs usually range between 2% and 5% of the home price. Budget for these to avoid last-minute surprises.

Step 2: Get Pre-Approved for a Mortgage

Buying a home is exciting, but getting pre-approved for a mortgage is crucial before you start touring houses. It strengthens your position as a buyer, helps you make yourself competitive, and streamlines the process when you find the perfect home.

Why Pre-Approval Matters?

• Shows Sellers You’re Serious: Sellers prefer buyers with pre-approvals since it proves they can afford the home.

• Clarifies Your Budget: You’ll know how much you can borrow, preventing wasted time on homes outside your price range.

• Speeds Up Closing: With lender approval already in place, the final loan process moves faster.

Types of Mortgage Loans

• Conventional Loans – Ideal for buyers with strong credit and stable income.

• USDA Loans – Designed for rural homebuyers with low-to-moderate income.

• FHA Loans – Government-backed option requiring lower down payments, outstanding for first-time property buyers.

• VA Loans – Exclusive to military members and veterans, offering zero down payment.

Choosing a Lender & Comparing Rates

• Research multiple lenders, including banks, credit unions, and mortgage brokers.

• Compare interest rates, fees, and loan terms.

• Check customer reviews and responsiveness—having a reliable lender makes the process smoother.

Step 3: Find the Right Location

The right place in Tennessee is just as important as the right home. The state has diverse locales, from cosmopolitan cities to quaint small towns and beautiful countryside. Here’s what you need to know before choosing your ideal spot:

Popular Cities and Regions

Cities / Regions

Why?

Nashville

Known for its booming job market, country music scene, and growing economy

Memphis

Cultural hub with a lower cost of living, strong healthcare and logistics industries, and a rich musical history.

Knoxville

It is known for its tech growth, scenic beauty, and affordable housing compared to larger cities.

Key Factors to Consider

• School Districts – If you have kids, research school ratings and educational opportunities in the area.

• Job Opportunities – Look at employment prospects in your industry, as some cities have stronger markets than others.

• Cost of Living – Compare housing prices, utility costs, and general expenses to match your budget.

Step 4: Hire a Real Estate Agent

Finding the right real estate brokers in Nashville, TN can make your home-buying process in Tennessee more successful. Here’s what you need to know:

Why Work with a Tennessee Real Estate Agent?

• Local Market Expertise: A qualified agent understands Tennessee’s housing trends, pricing, and neighborhoods.

• Negotiation Skills: They can help you get the best deal and handle tricky contract terms.

How to Find the Right Agent?

• Ask for Referrals: Friends, family, or colleagues who recently bought or sold a home can recommend trustworthy agents.

• Check Online Reviews: Websites like Zillow, Realtor.com, and Google Reviews can give insight into an agent’s reputation.

• Verify Credentials: Ensure they are licensed with the Tennessee Real Estate Commission.

Step 5: Start House Hunting

House hunting is exciting, but without a plan, it can be very overwhelming. It can make the process smoother by keeping what’s most important while being updated about Tennessee’s real estate market.

Begin by listing must-haves, such as the number of bedrooms or location, versus nice-to-haves, such as a big backyard or home office. By clearly defining your priorities, you’ll be more confident in your decisions.

The real estate market in Tennessee is different by city. Cities like Nashville and Chattanooga are very competitive, whereas smaller towns tend to be less expensive. Study local trends, such as average home prices and inventory, to stay profitable before buying Brentwood Nashville houses for sale.

Step 6: Make an Offer and Negotiate

Research comparable condos for sale in the Gulch Nashville, TN, before making an offer to ensure your price is within market value. Think about location, condition, and recent sales. Adjust your offer if repairs are needed.

Earnest money, usually 1-3% of the home’s price, is a good-faith deposit held in escrow. It demonstrates seriousness and can be applied to the down payment or closing costs. If you back out for a valid reason, you may get it back.

Negotiation is key. You can negotiate on price, closing costs, or repairs. Contingencies like home inspection or financing approval protect you if issues arise.

Step 7: Home Inspection and Appraisal

A home inspection gives you a clear picture of the property’s condition before finalizing the purchase. A licensed inspector will examine the home’s structure, electrical system, plumbing, roof, and more. This step ensures you’re not buying a home with hidden defects that could lead to costly repairs.

Tennessee homebuyers will likely encounter foundational issues from soil shifting, mold-related high humidity, and outmoded electrical or plumbing designs in older homes. A thorough inspection would help discover such issues and permit repairs or price adjustments.

Unlike an inspection, an appraisal determines the home’s market value. It’s essential to determine whether or not you’ll get financing. If the appraisal comes in lower than the agreed-upon price, you may need to renegotiate or cover the difference yourself. It ensures both you and the lender avoid overpaying for the property.

Step 8: Close the Deal

You’ll sign the final documents at closing, including the deed and loan papers. Your lender will process the remaining balance, and you’ll settle any outstanding fees. You can expect a few forms confirming your purchase, loan details, and legal transfer.

Closing Costs: Include inspection fees, title insurance, taxes, and more. They typically range between 2% and 5% of the purchase price, so be prepared for these additional expenses.

Final Walk-Through and Keys: Before signing off, do a last walk-through to ensure everything is in order. Once all’s confirmed, you’ll receive the keys to your new home!