It’s no secret — Nashville has one of the hottest real estate markets in the country. In fact, the city came in at the coveted #1 spot in PricewaterhouseCoopers’ list of the Top Real Estate Markets for its strong economic growth, investment and development opportunities, increasing population, and other factors. Nashville experienced some record-breaking months at the start of 2022, with median sales prices reaching a high of $428,000, homes on the market for an average of just 14 days, and inventory at an all-time low.
In such a cut-throat real estate environment, it’s important to do everything you can to remain competitive, making your offer stand out amongst eager buyers, some of whom are offering cash. Not to mention, there are several steps to take beforehand to ensure you are as prepared as possible for the home buying process, in relation to your finances and other factors. Plus, amidst all of the chaos, it’s important to make wise decisions when it comes to the inspection process — making sure you’re not cutting corners in order to please a seller, which can end up costing you in the long run.
From the initial home search to closing day, here are a few ways to remain competitive in Nashville’s unique and fast-paced real estate market!
Work With a Trusted Agent
First and foremost, you want to ensure you are working with a trusted real estate agent. Your agent will function as your advocate throughout the entire process, making sure you do everything you can to stand out from the pack. Their knowledge and expertise may just be what gives you an advantage, as they will be able to help you make a competitive offer, negotiate with the selling agent, and handle any other details that might come up.
If you need help finding a trusted agent in the Nashville area, we have several we can recommend! After several years of working side by side with local Realtors, we have curated a roster of professionals who can get the job done.
You may be eager to hit the ground running, but there are several “homework” items you can do beforehand to set the foundation for a successful buying journey. Take time to get familiar with the Nashville market by going to open houses, checking out the current inventory, and researching what area(s) you may want to live in. Plus, you may want to familiarize yourself with the home buying process, so you know what to expect along the way. When it comes to the home inspection, check out our FAQ page and the Magnolia blog to learn more about the process.
Determine Wants vs. Needs
In a competitive market, you may have to make a few compromises in order to secure a home. That’s why it’s important to differentiate between your wants and needs. For example, you may need at least three bedrooms to fit your family, while you maywant an updated kitchen. So when you find a home that has three bedrooms with a slightly outdated kitchen, you will know it’s time to make a move — understanding you can always update the kitchen down the road! Things like paint color, fixtures and other cosmetic details can always be changed. But location, square footage or layout? Those things are a bit more difficult (and sometimes impossible) to change.
Get Your Finances in Order + Get Pre-Approved
At the end of the day, cash is king in a hot market. So the more strategic you can be from a financial perspective, the better. Work closely with a financial advisor to better understand your financial situation, including how much you can put towards your down payment and how much home you can even afford to begin with. This is a good time to pull out any relevant documents you will need during the pre-approval process, such as income verification, debt information, bank statements, etc.
It is wise to get pre-approved in order to prove your financial standing to the seller. Pre-qualification is a quick and easy process that involves a quick look at your finances, while pre-approval is a much more in-depth examination of your financial status, almost like a credit check, providing the exact loan amount that you are approved to receive. Pre-approval is crucial in Nashville’s ultra-competitive market!
Don’t Waive Inspections
As a home inspection company, we have seen it all over the last few years — including waived inspections that end up costing the buyer thousands of dollars after the sale is complete. The truth of the matter is: you don’t have to waive inspections in order to stay competitive! In fact, we highly recommend going through with inspections, no matter the circumstances. Trust us — you don’t want to find out about a cracked foundation or a leaky roof after the deal is already done.
What if it’s a new construction home, you ask? Surprisingly, it’s often more crucial to inspect a new construction home! We have found that a new home’s inspection report is typically much longer and more comprehensive than the report for a home that has been lived in for 5-10 years.
New construction or not, you can reserve a home inspection slot and include that scheduled date in the contract.
Limit Your Liability With a Pass or Fail Inspection
As mentioned, you should never waive an inspection. However, you can choose to waive an inspection contingency, which means you will overlook any minor repairs, such as a faulty toilet or a doorknob that doesn’t turn just right. You could include wording in your offer that mentions that the seller will not be responsible to correct all repairs under $500, while any significant repairs (estimated over $500), such as radon, mold, or a faulty foundation, will let you off the hook. This essentially means the inspection is either pass or fail, which limits your liability in the long run. Rather than adding a laundry list of minor repairs for your seller to complete, it allows you to know what work you may need to do after the sale, as well as make you aware of any deal-breaking problems before it’s too late.
“I never recommend buying a house without a home inspection. You don’t know what is in the attic, you don’t know what is in the crawlspace, if there are structural issues…”
“In a competitive real estate market, we still purchase the house ‘as is’, but make sure we know what we are getting into before finalizing the deal. A real estate professional is able to secure the opportunity to perform a home inspection even in the midst of difficult negotiations. Magnolia Home Inspections is the best in my opinion at being available to get in and get out without disruption in difficult circumstances.”
Make Yourself Stand Out
At the end of the day, we are all humans with emotions. So you can appeal to the seller by making a personal connection, in hopes of standing out amongst the crowd of offers. You might consider writing a letter to convey your favorite things about their house and how you envision yourself living in it. After all, we all love compliments, especially if they’ve spent a lot of time, money and energy updating and maintaining a house over the years. A home is personal — it’s where you spend the most time, raising your kids, enjoying meals, and relaxing in the backyard — so the real estate transaction should be personal, too.
Not to mention, your offer can certainly stand out with financial incentives, such as a larger down payment, a larger earnest deposit, taking on the seller’s closing costs, and of course going over the asking price. But you can also throw in some other desirable terms, like flexibility with the closing date or other conditions. You might have your agent reach out to the seller’s agent to understand why they are selling (for example, moving to another state, which might translate to a longer closing period) and just what might make them happy in the long run!
Be Ready to Act Quickly
Speed is the name of the game in a hot real estate market, as homes can sometimes go under contract just hours after listing. That’s why you need to be prepared to move quickly, staying in contact with your agent every step of the way. Your agent will do a lot of the heavy lifting of sifting through potential homes — you just have to be ready to make a quick decision and make an offer when the time comes. Keep in mind that sometimes the first offer is the one that stands out to the seller!
Remain Flexible + Patient
Above all, it’s important to remain flexible throughout the process. There may be a couple of instances where you’ll have to make a compromise in order to appeal to the seller and their unique requests, such as a longer closing or inspection period. Or perhaps they want to take their appliances with them or avoid repainting the interior — all things that should not be “deal breakers” and can be remedied after closing. Your willingness to accommodate and compromise can go a long way in the seller’s eyes!
In this market, it’s also likely you won’t get the first home in which you put in an offer, so it’s important to remain patient. Keep in mind that the right home will come along exactly when it’s supposed to — and just think about how exciting that day will be. So in the meantime, don’t lose hope!
With a combined 40+ years of experience in the industry, Magnolia Home Inspections knows a thing or two about the real estate process. We are focused on protecting home buyers by preparing them for successful purchase negotiations and educating them for successful long-term home ownership.
Give us a call if you have any questions about the home inspection process — or schedule your inspection today! We promise you peace of mind or your money back.