Being an educated buyer will go a long way towards making the buying process an enjoyable one. Drew is a big proponent of client education. If you have a question and can't find the answer here or would like more information regarding any of the questions below, contact Drew!

Buyer Frequently Asked Questions


Q: Who pays for my Realtor’s commission when I buy a house?

A: The seller pays the buyer’s agent’s commission. Translation: the buyer doesn’t pay their Realtor’s commission. The only exception for this would be if the seller was unrepresented (aka for sale by owner), but even then, it could be negotiated to have the seller pay for it.

Q: How much money do I need to buy a house?

DISCLAIMER: this estimate is for informational/budget planning purposes ONLY and is not a quote. Your lender will be able to tell you exactly what these costs will be for your particular home.

A: It depends on the price of the home, but generally speaking, you’ll need the following:

  • Down payment: You will likely need a minimum of 3.5% to 5% of the purchase price for the down payment, depending on the type of mortgage you are getting. For more info on mortgage types and products, ask Drew for some recommendations of lenders who can provide more information. There are many great customer-centric lenders to talk with.
  • Money for the home inspection: Home inspection prices vary depending on the square footage and type of home, but for budgeting purposes, expect to pay $350 - $450 for a house under 2,500 sq/ft and $450 - $600 for a bigger home. It is also recommended that you have the house tested for Radon (more info below) for around $100 as well as termites, which will cost around $35.
  • Appraisal: The appraisal is generally considered a closing cost, but we will mention it here because some lenders will require the buyer to pay for the appraisal upfront before the actual closing. You should typically budget $400-$500 for an appraisal.
  • Buyer’s closing costs & pre-paids: In middle TN, a buyer’s closing costs and pre-paids can be estimated at about 1.5% to 3% of the purchase price, depending on the price of the house. The higher the price of the house, the lower the closing costs and pre-paids are as a percent of the purchase price. Feel free to ask Drew for more specifics about this. This estimate is assuming the buyer is getting a mortgage for the property and not paying cash. If the buyer is paying cash, the closing costs will be significantly lower.

Q: I’ve heard something about a Radon test. What is that?

A: Radon is a naturally occurring gas which comes from the ground that is suspected of causing lung cancer. It is recommended that you have a Radon test performed (cost of about $100) when purchasing a home. There are effective ways of mitigating Radon, so even if high levels are discovered in a house, it can be mitigated. If there are high levels in the house, the goal is to discover this during the inspection period so it can be mitigated by the seller before closing. For more info, check out the EPA’s informational site -

Q: What are closing costs?

A: Closing costs are the expenses, over and above the price of the property that buyers and sellers normally incur to complete a real estate transaction. Costs incurred include loan origination fees, discount points, appraisal fees, title searches, title insurance, surveys, taxes, deed-recording fees and credit report charges.

Q: What advice does Drew have for potential home-buyers?

A: Recognize that a home is a living, breathing structure that requires maintenance and upkeep. Make sure you have some kind of “emergency fund” to pay for expenses that come with owning a home. Depending on the type/age/size of home you are purchasing, you’ll have a good idea of what these costs will be and when they’ll occur (e.g. knowing the age of the water heater before purchasing the house) but it’s always good to plan for the unexpected so it’s not stressful when something does come up.

Q: How long does it take to buy a house?

A: From the time an offer is accepted by a seller (and assuming the buyer is getting a mortgage as opposed to paying cash), it generally takes about 21 to 44 days to close (i.e. finalize the sale). Closing dates don’t always have to happen in that timeframe, but that is typically the timeframe needed in order to apply for the mortgage and perform home inspections. The closing date is negotiated as part of the offer, so buyers and sellers will always know what date the closing is scheduled for when entering into a contract. Sometimes, it will work out best for both the buyer's and seller's schedules to close several months after a contract is agreed upon.

Q: Can I buy a foreclosure or short sale?

A: Sure! That said, depending on what your motivation is for buying one, keep in mind that the word foreclosure and/or short sale are not always synonymous with a good deal. Your Realtor will need to perform a market analysis on any house you want to make an offer on (even non-distressed properties) to see how good of a deal it may be. Reach out to Drew for more information on distressed properties and see what’s available in the area.

Q: How much home can I afford?

A: This is a simple question with a complex answer. Your mortgage lender will give you a maximum amount that you are approved to purchase a home with. However, that amount may be above what you can comfortably afford while maintaining your desired lifestyle. You'll want to examine your household budget and decide how much you can comfortably afford to spend on a mortgage payment each month. You can use that number to determine what price range you should be looking at when searching for your new home. Drew’s always up to doing some number crunching to ensure you’re not stretching yourself too thin. The last thing you want your monthly mortgage payment to be is stressful.

Q: How does the buying process work?

A: There are several steps involved with purchasing a house, townhouse, land, or any other type of property. All of the steps could fit into one of three categories: "financing, house-hunting, and/or contract-to-close activities." Check out the buying process page for a more detailed overview.

Q: Should I get a home inspection?

A: YES! A licensed home inspector will provide an unbiased assessment of a property, explaining what is working property as well as areas that might need attention. This can potentially save you, the buyer, money by negotiating with the seller to have them correct issues identified by the inspection before you close on the house. Not sure who to hire for an inspection? Drew has a list of several inspectors who have provided exceptional service to past clients. It is strongly advised that buyers get a home inspection when buying a home, even if it’s a brand new house.

Q: What does my monthly mortgage payment go towards?

A: There are four (sometimes five) things rolled up into your monthly mortgage payment. In the industry, these four things are known as PITI.

P - Principal: the original amount of the mortgage that’s due by a certain date (usually 15 to 30 years later)

I - Interest: the amount the lender is charging you to borrow the money (i.e. interest rate)

T - Taxes: property taxes (broken down into monthly increments)

I - Insurance: monthly cost of homeowners insurance

 Mortgage insurance (sometimes) - this only applies if your initial down payment was less than 20% of the purchase price. If your down payment was 20% or more, than this doesn’t affect you. The cost of mortgage insurance is based on many factors including but not limited to the amount of your down payment, the size of your mortgage, your credit score, etc. Your lender can tell you exactly how much mortgage insurance would cost before you purchase a home.

If you’re paying cash for a house, you won’t have a mortgage payment but you’ll still need to pay for taxes and homeowner’s insurance.

Q: What’s an appraisal?

A: An appraisal is the lender’s assessment of the market value of the home you are purchasing. The lender wants to make sure the value of the house is equal to or greater than the purchase price. The appraisal takes place between the day a contract is binding and the closing date.

Q: What happens at the closing?

A: The closing is where you, the buyer, sign mortgage documents (unless you are paying cash) and documents to legally transfer the property to your name. The closing attorney is present to assist with this process.

Q: Who is at the closing?

A: Generally, the buyer(s), their Realtor, the closing attorney, and sometimes the lender attend the closing.

Q: What happens if I can’t be (or make it) there in person for the closing?

A: If you’re an out-of-state buyer who can’t be present to close on your new home in Tennessee, we can coordinate an out-of-office closing. The closing company will overnight all of the documents (with specific signing instructions) to you the day before the house closes. Once you receive the documents in the mail, you will need to sign them in front of a notary (some of the documents must be notarized) and send them back to the closing company in TN. You will return the documents via the self-addressed and stamped overnight envelope that the closing company provides in the original document package.

Q: What is earnest money?

A: Earnest money is the money that a buyer provides to the seller’s real estate company to deposit and hold onto until the closing. At the closing, the earnest money will either be applied toward the buyer’s cost to purchase the home or refunded in part or whole (if the earnest money amount is more than the buyer needs for “cash to close”). A buyer can get the earnest money back if withdrawing from the offer for a contingency laid out in the original offer. There is no mandated amount for a buyer to provide as earnest money, but the general place to start is about 1% of the purchase price of the home.

Q: Do I ever meet the seller?

A: Typically, no. We usually have split closings which means the buyer and seller close their respective sides of the transaction at separate times and locations. That said, there are no rules against the buyer and seller meeting if they both wish to do so.