Are you ready to buy a house in Memphis and just starting your home search? Maybe you’re a first time homeowner or you’ve just outgrown your current place. Whatever your reasons, once you’ve decided to buy a home in Memphis, there’s a few things you should know before you go any further. With this quick guide, you’ll be more informed about the local real estate market and be able to make more informed decisions on your real estate purchase.
1. Things Are Heating Up
Once a struggling real estate market, the city is finally starting to rebound and many people are taking notice. In fact, Forbes.com listed Memphis as one of the top markets for 2016. Their research showed that when people searched Realtor.com, Memphis was receiving 60% more listing page views than the national average. The home inventory was also moving 2 weeks faster than the average market. This is a good sign for homeowners that values are on an upward trend and a strong signal for buyers that they should jump in if they have been on the fence.
2. Still A Buyer’s Market
Speaking of home buyers, while the Memphis real estate market is heating up, it still has a ways to go because of the sheer amount of available inventory compared to demand. Thus creating a Buyer’s market in most areas of the city. This means that there are more deals to be had than if it were a Seller’s market. Another benefit to a Buyer’s market is that you don’t run into near as many multiple offer situations that pits you against other buyers. Many cities like Nashville are currently experiencing this, which can lead to a frustrating home buying experience. Luckily for now, you won’t run into this scenario too often in Memphis.
3. Smart Investment
If you’re thinking about purchasing property for investment purposes, then it would be hard to find a city that offered better cash flow on rental properties. In fact, Memphis was ranked #1 in 2015 for cities with the highest rent-to-value ratios. While there are still plenty of deals out there, they will probably become less abundant as the city becomes more popular for homeowners.
4. Perfect for First Time Homebuyers
Because home prices are still very favorable in Memphis, the city was just recently ranked as the 3rd best city for first time home buyers. For Millennials who looking to purchase a home, this news is very exciting because Memphis was also listed as one of the Top 10 Cities for Millennial Job Seekers. Talk about a 1-2 punch.
5. School Districts
Living in a good school district is one of the major criteria for many of our clients. Not only that, but it has been shown that homebuyers are willing to pay up to $50 more per square foot for homes located in top-rated school districts. Areas to consider in Memphis that are known for quality schools include Collierville, Germantown and Arlington. Just make sure you confirm with the school that the house is actually located in that school district before you buy, because districts do change over time.
6. Walkable Communities
Another major feature many people seek out in a home is the walkability of the community. This can also increase the value of a property because of the convenient lifestyle that it provides. If this is important to you and your family, you may want to check out our list of the Most Walkable Neighborhoods in Memphis.
7. Consider Property Taxes
Depending on which area of Memphis you choose to live, property taxes can vary greatly, which will affect how much you can borrow. A $250,000 home in Arlington, TN, which has the lowest property taxes in the metro area, will cost you less than a $250,000 home located in the city of Memphis, which has the highest property taxes. Of course, Arlington is about 40 minutes outside of Memphis, so you will want to keep travel costs in mind if you will have to commute to downtown on a daily basis. To get a clear picture of tax rates for the different areas, check out this quick guide.
8. Know Your Environment
During the flood of 2011, some of the homes located in Harbor Town had Mississippi River floodwaters reach their front door. While living near a major river obviously increases your chances of experiencing a flood, this a great reminder that you always want check whether a property is located in a flood plain before you put a contract on a house. If so, your insurance company will more than likely require that you carry flood insurance, which will of course add to your monthly costs.
Another important item to look out for is termites, which are more prevalent in the Southern region. A quick inspection will reveal if termites are present on a property or if there has been past intrusion. If that is the case, you will want to investigate further or ask the seller to remediate the issue.
9. Not All Contracts Are the Same
Real estate contracts in Tennessee may vary from what you are used to if you have bought a home in a different state. One of the most important differences that we like to point out is that in the state of Tennessee, the Seller is not required to grant a closing extension to the Buyer for any reason. Some states offer this as protection for the Buyer in case any unforeseen issues arise. However, this is not the case here. This is why we monitor our clients contracts very closely and work only with lenders who have a proven track record of closing on time to help prevent any loss of earnest money.
10. Do You Have A Clue?
Every home has it’s story. But how can you tell if a home has ever had insurance claims filed against it? Luckily there’s an easy way to do this. Patrick Crider, CEO of Fieldstone Insurance Group, suggests ordering a C.L.U.E. report for a property, which is like getting a Carfax for a home. The report will show all of the insurance claims made against that property. Crider stated 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 also advised that “most CLUE reports will show 5 to 7 years of claim history.” While nothing is ever 100%, this additional inspection will give you a better piece of mind before moving forward with your purchase.
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