Making an Offer and Getting Under Contract in Tennessee

You found a home you like. In Part 3 I explain what happens next: how an offer is built, what the contract timeline looks like and where the inspection, appraisal and your loan fit in.

Start with how agency works

Before you sign anything, you should understand who an agent is working for. Early in our work together I will explain, in plain language and in writing, what role I play and what role the other side's agent plays. Please ask questions about it until it makes sense to you. You can also confirm any agent's license at verify.tn.gov, which the Tennessee Department of Commerce and Insurance recommends before you work with someone.

What goes into an offer

An offer is a written proposal that becomes a binding contract if the seller accepts it. Here are the pieces we will talk through:

• Price. I'll pull recent sales of similar homes so we can look at the numbers together.
• Earnest money. This is a good-faith deposit you make after signing a purchase contract. It is usually applied toward your costs at closing, and the contract spells out when it is returned and when it is not. Read that section closely before you sign.
• Closing date and possession. When you will close and when you get the keys.
• What stays with the home. Appliances, window coverings and similar items should be named in the contract.
• Contingencies. Conditions that let you step away if something is not right, such as the inspection, the appraisal or your financing.
• Repairs or credits. Whether you are asking the seller to handle anything.

Your contract sets each of these terms and the deadlines that go with them, so I read each date with you.

Negotiation

The seller may accept, decline or counter. I'll help you weigh each response against your budget and your priorities. Staying calm and clear about what matters most to you makes the back and forth easier.

The inspection and resolution period

A home inspection checks the home's condition. The CFPB advises scheduling it as soon as possible after choosing a home so you have time to resolve problems and complete any additional inspections. If your purchase contract is contingent on a satisfactory inspection, the CFPB says you can cancel without penalty if you are not satisfied with the results. In a Tennessee contract, the inspection period and the time that follows for the parties to work out repairs are set by the contract itself, so the exact timing depends on what you and the seller agree to. I will keep track of those dates with you, and anything you want to change or request is put in writing.

The appraisal

Your lender usually requires an appraisal, which estimates the home's value. It is not the same as an inspection. If the appraised value comes in below the sale price, the CFPB says it can support asking the seller to lower the price, and that buying a home for more than its appraised value is very risky. The CFPB also notes that your lender must give you a copy of the appraisal. If the seller will not adjust, the CFPB suggests speaking with an attorney about your options, since canceling may carry costs depending on your contract.

The financing contingency

A financing contingency is a contract term that ties the deal to your loan approval. Ask me how it works in your contract, how long it lasts and what has to happen before it ends. Stay in close contact with your lender, respond quickly to requests for documents and avoid new debt.

Your checklist for this stage

1. Review the agency disclosure and ask questions.
2. Confirm your price range with your lender.
3. Decide on contingencies and review each deadline.
4. Schedule the inspection promptly after the contract is signed.
5. Confirm the appraisal timing with your lender.

This guide is general information, not legal, tax or lending advice.

Questions about your situation? Call me at (865) 672-9009 or send a message.