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If you own a home in Tennessee, chances are you can find someone who wants to buy it. The state welcomed more than 55,000 new residents between July 2020 and July 2021, according to data from the U.S. Census Bureau. As more people flock to the Volunteer State, they’re willing to spend plenty of cash to plant permanent roots. According to a Tennessee Realtors report, the median sale price in the state hit $357,000 in May 2022, a 23 percent increase over the same time last year. However, there are also signals of a slowdown in the housing market: Redfin data indicates that the number of listings with price drops is on the rise.
So, is it time for you to cash in on your home’s value? Or, if the market really is cooling off, would it be better to wait it out? Read on for a complete guide to selling a house in Tennessee.
Are you ready to sell?
Just because your home is worth more than you bought it for doesn’t mean you have to rush to list it. If you’re buying another house while you’re selling your current one, you’ll need to think about timing. If your current home sells before you’ve found a new one, are you OK with paying for a short-term rental? If you’re moving to a new city, have you done the math to figure out how the cost of living compares to your current town’s? And finally, what do your finances look like? Mortgage rates have been surging. If you need to borrow a lot of money for your next home, what will your monthly payments be? Once your bank account is ready to move forward with a sale, it’s time to get your property prepared, too.
Preparing to sell
First impressions are important in real estate. Before you think about putting a “for sale” sign in front of your house, consider these three questions to make sure it’s ready for prime time viewing.
1. Is it worth upgrading your home before you sell?
It’s tempting to think that a major renovation — a new kitchen, for example — will dramatically increase the sale price of your home. But the reality is that most big projects don’t recoup their full costs at resale. So, instead of investing tens of thousands of dollars for a remodel that may or may not pay off, consider these cheaper ways to boost your property value.
2. What should you repair before selling your home?
To fix or not to fix? That is the question that so many homeowners have as they get ready to list properties for sale. While visible issues, like water damage from a leak, should be addressed, there are plenty of repairs that you don’t need to bother making for your sale. It’s smart to ask a real estate agent for a professional opinion on what can stay as-is, and what might turn off prospective buyers.
3. Should you stage your home?
Professional staging brings star power to your property. Think of it the same way you might think of dressing up for a big date: You want to turn that special someone’s head. Staging your home can do the same for the right buyer. It might be as simple as decluttering and organizing, or it might mean some bigger work, like renting furniture to make the living room come to life. Either way, the result can spell great news for your bottom line: Staged homes sold for around $40,000 more than their list price in 2021, according to the Real Estate Staging Association.
When is the best time to sell a house in Tennessee?
You want to list your house when it will spend the shortest amount of time on the market — the best time to sell is whenever it will sell the fastest. With that in mind, Redfin data shows that the best time to sell a house in Tennessee is usually late spring/early summer, specifically between May and July. Buying activity tends to dry up in the winter months, so it’s wise to list when the weather is good.
Find a local Tennessee real estate agent
While statewide data trends are helpful for Tennessee homeowners, the reality is that real estate is a localized industry. Individual cities and towns can differ wildly. For example, buying activity in Nashville, where the median sale price for single-family homes is $490,000 (as of July 2022), is going to look different than in Memphis, where the median is less than half of that at $233,250. Be sure to find a real estate agent who specializes in your specific area, with a proven track record of helping clients maximize their profit potential. Ask for referrals from friends and family, and interview several candidates before choosing someone to work with.
Wait, some sellers might say, don’t I have to pay a commission fee for hiring a Realtor? Yes. The fee is typically 3 percent for your agent and 3 percent for the buyer’s agent (the seller covers both fees at closing). That cost usually proves to be well worth the investment, though. Agent-assisted sales tend to close for much more money than sales that are handled by the owner — $58,000 more, in fact, according to the latest data from the National Association of Realtors. So, the saying “it takes money to make money” certainly rings true in real estate.
Price your home competitively
You can take some initial steps on your own to start figuring out what your house is worth, but your agent will be an invaluable resource in helping you determine the right asking price for your home. By helping you review comps of properties that have recently sold, you’ll get a sense of what buyers have been willing to pay for homes with similar characteristics to yours. The ultimate goal in pricing “competitively” is to stir up actual competition. By getting multiple buyers interested in your home, you can put yourself on the path to what every seller wants: a bidding war.
Documents and disclosures in Tennessee
Tennessee law requires home sellers to complete a residential property disclosure form that lists any defects that could impact the value of the property. It’s a standard form, and you simply need to be honest about everything — if you fail to disclose a past leak, for example, and it becomes evident that you were aware of the problem, you could be held liable in court. You’ll complete the form when you list the property, and you’ll also need to update it just before closing to verify that nothing has changed in the interim.
In addition, if your property is part of a homeowners association or a condo with shared spaces, be ready to hand over documentation about the building and the financial health of the association. Prospective buyers will want to know if there are any upcoming special assessments, too.
Need to sell your home fast?
Selling a house can take a long time. In some cases, closings might take around 50 days to complete. If you don’t have that kind of time, here are some ways to sell your home faster.
- Find an iBuyer: Depending on where in Tennessee you live, you might be able to get an offer in less than 24 hours from an iBuyer. Offerpad buys properties in Nashville, for example, and Opendoor buys homes in the Chattanooga, Nashville and Knoxville-Morristown markets. Be aware that you’ll pay for the convenience of speed, though: iBuyers typically offer below-market-value prices.
- Sell for cash: If your home is in need of costly repairs, you might see that as a negative. For companies that buy houses for cash, though, repairs are opportunities. Finding a company to buy a house in disrepair is pretty easy — finding a good offer is hard, though. These companies are looking for deals where they can make quick fixes and turn a handsome profit.
- List as-is: Another option is to list your house on the open market, but with an “as-is” disclaimer to speed up the sale process. As-is listings indicate that the seller isn’t going to negotiate with a buyer: no concessions, no paying to fix issues. You still have to be honest in your property disclosure, but this eliminates the back-and-forth bargaining that often slows down real estate transactions.
When it’s finally time to close, you won’t have to do much as the seller. The buyer will conduct a final walk-through, so make sure the property is in great condition beforehand. You can go to the closing if you want, but you can also hand over the power to your attorney to deal with the final details and hand over the keys. All you need to do is budget for the closing costs.
Cost of selling a home in Tennessee
The biggest line item for sellers is real estate commissions. Unless you manage to negotiate a lower fee, you’ll likely hand over about 3 percent to your agent and another 3 percent to the buyer’s agent. While 6 percent of your purchase price can feel like a tough pill to swallow, there’s good news: You won’t have many other closing costs.
Sellers’ closing costs
In 2021, the average closing costs in Tennessee added up to $3,911, according to ClosingCorp. However, the buyer is responsible for a large portion of that money. In the Volunteer State, buyers cover real estate transfer taxes and mortgage taxes. Here’s a rundown of some of the closing costs sellers may pay:
- Title insurance: There isn’t a set standard for which party covers the cost of title insurance in Tennessee, although some title companies indicate that sellers in the southern part of the state often cover the cost. Title insurance can be costly — more than $2,500 on a $500,000 property — so have your agent try to negotiate for the buyer to cover the cost, or split it with you.
- Attorney fees: Speaking of attorneys, it’s wise to hire one to represent your interests in the deal. You’ll need to pay for their time, but the peace of mind you’ll get knowing that the contract is buttoned up is priceless.
- Seller concessions: If the buyer’s home inspection unearths any problems with the property, they may ask you to help cover part of their closing costs. It’s up to you whether to agree with the concessions, but this is not unusual.
Don’t forget to set aside funds for the cost of hiring movers. If you’re staying in the area, the fee shouldn’t be too high — likely around $1,600. If you’re moving far away from Tennessee, though, you should be ready to hand over a sizable chunk of cash for the long-distance relocation.
Take the first step
There are quite a few steps to selling a house in Tennessee, but the first one is easy: Set up some interviews with different local real estate agents. Ask plenty of questions to get a sense of how they will approach your business and your personal situation. Be sure to ask their thoughts on dual agency, too: It’s legal for the same agent to represent the buyer and the seller in Tennessee, but it’s up to you whether you approve the arrangement.
You’ll pay for real estate commission fees when you sell your home in Tennessee, which typically add up to around 6 percent of the purchase price. The average closing costs in Tennessee added up to $3,911 in 2021, but much of that amount is covered by the buyer: For example, the buyer often pays for title insurance and recordation taxes.
You will need to complete a five-page disclosure form that includes all of your knowledge about potential defects with the property. Does it require flood insurance? Are there any past zoning violations? Is the air conditioning functioning properly? These are examples of the kinds of information you need to share. Just before closing, you’ll need to update the form with any changes or certify that the condition is the same.