Real estate challenges in Rutherford County
MURFREESBORO, TN (WSMV) – Rutherford County officials told News4 Monday that the real estate market isn’t what it used to be.
Buying a home in Rutherford County is becoming more of a challenge because of out-of-state real estate investment companies, according to the assessor of property for that county.
Rob Mitchell with Rutherford County said that currently, 10 percent of the entire single-family real estate market in Rutherford County is owned by out-of-state corporations. Realtors in Rutherford County say this trend impacts first-time home buyers the most.
“One of the largest is Progress Residential that operates in this market,” said Rob Mitchell, Assessor of Property for Rutherford County. “We have people moving into the middle Tennessee area that will be looking for a home. These large multi-million dollar corporations come in, and they pay cash and close in a week,” he added.
“So the more homes we looked at, we were losing out on offers. We ended up having to rent for a period of time here,” said Adam Robb, who Just bought a home in Rutherford County.
Robb just closed on his house in February. And he knows the difficulty of the market, which also includes competing with out-of-state real estate investment companies.
“Even we were offering you know appraisal contingency or appraisal gap and also just pass-fail inspections. But it seemed like we were getting beat so by price $25, $50,000,” said Robb.
“On most houses that we see listed where there are multiple offers. We’re seeing many investment companies as a part of those offers. That does create a more competitive environment,” said Chris Garrett, the Principal Broker & Co-Owner of Weichert Realtors The Andrews Group.
Garrett said that the competitive environment had left homebuyers with the option of getting creative to get their bids accepted.
“In many cases, they’re having to go over list price. They have to do what we call appraisal gaps where they agree to bring money if it doesn’t appraise. That’s something that sellers are looking for. They’re actually sometimes they’re foregoing the home inspections. We don’t recommend that they forego a home inspection,” Garrett said. “But if you’re competing, there’s a lot of buyers that would choose to do that or choose to do a pass-fail home inspection and not ask for items to be repaired. So there’s a lot of things that buyers are having to do in order to get only an offer accepted at this point,” he added.
With 10 percent of the entire single-family real estate market in Rutherford county owned by real estate investment companies, News 4′s Tosin Fakile asked if 10 percent is a lot for the county.
“That’s roughly 14,000 parcels. So 14-thousand homes are not available to purchase because they have been removed from the market. And Rutherford county is busting at the seams with new people moving into the community. So we’re growing by 20 to 30 people every month not having those available properties for people to purchase to create a home,” Mitchell said.
“I love the movie It’s a Wonderful Life, and it tends to turn middle Tennessee into a Potterville. You have large corporations owning all the property; families are being robbed of generational wealth because they cannot create that wealth through property ownership, and that’s a real problem,” Mitchell added.
Experts say this is adding to a market that already has limited inventory.
“Anytime, you know someone buys a home that’s not a homeowner, that restricts the inventory for the homeowners that are in the market,” said Garrett. “Where we see the most problems for getting offers accepted are the government-backed loans, the FHA very little money down or the even the VA. So our veterans are being affected by this really restriction of inventory,”
But all hope isn’t lost. Garrett said home buyers could do things to get the edge over the investment companies.
“Most of the investment companies are going to have a structure they have to adhere to. They’re going to have a certain type of inspection; they’re going to have a certain amount of days to close. There are certain things they can’t really vary from because they make so many offers in so many markets. They have to have a kind of a rigid structure,” Garrett said. “A lot of times, they can’t offer occupancy agreements. I would say be very clean with their offers and maybe offer occupancy and certain things like that that will give them an advantage over the investment companies,” he added.
News 4′s Tosin Fakile asked if there is anything the county or cities in Rutherford County can do to help home buyers.
“That is the perfect question. Counties are constricted by statute and state law with what they can do. Cities have much greater leeway in what they can do through zoning regulations and through the permitting process of rental properties,” Mitchell with Rutherford County said.
Robb, who just bought a home, had this encouragement for those still trying to buy a home while competing with real estate investment companies.
“You just have to keep going. You just have to be determined to find a house and realize that the house that you find may not be the perfect house. I think you have to kind of give and take here and there. But definitely, at the same time, be happy and make sure it is going to be overall a right home,” Robb said.
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