7 biggest mistakes Farragut first-time buyers make

Buying your first home in Farragut is one of those decisions that looks simple from the outside and gets very layered the moment you sit down with a contract. I have walked first-time buyers through this town for the better part of two decades, and the mistakes I see are remarkably consistent — and remarkably fixable when you catch them early. Here are the seven that cost my clients the most when nobody flagged them in time, and exactly how I help them work around each one.

Before we start, the obligatory and important note: I am a REALTOR®, not a mortgage professional, CPA, tax attorney, or home inspector. Every number in this post is illustrative. The figures and rules cited move every year, and your situation is yours. Treat what follows as a map, not a quote — and put real numbers in front of a lender, a CPA, and a Tennessee attorney before you sign anything.

Mistake 1. Skipping or rushing the pre-approval

This is the most common one, and it's the one with the cleanest fix. A first-time buyer downloads a national lender's app, taps through five screens, and gets back a "pre-qualification" letter for a number that looks generous. They start scheduling showings the next weekend. Two weeks later they fall in love with a house on a Saturday, write an offer Sunday morning, and find out Tuesday that the real underwriting math doesn't actually support that number. By then the seller has accepted a stronger offer.

A pre-qualification is a soft read on what you self-reported. A real, underwritten pre-approval is what you want — a lender has actually reviewed your pay stubs, W-2s, tax returns, credit report, and bank statements, and has issued a commitment letter that a Farragut listing agent can rely on. In a competitive bid, that letter is often the tiebreaker.

The fix. Before you tour your first house, sit down with a local lender — not just a national 1-800 lender — and complete a full underwritten pre-approval. Get the letter in writing, ask what the lender will need to update it as the search drags on, and ask exactly what the letter does and does not commit them to. If a Farragut listing agent calls them to verify, you want a lender who will pick up.

Mistake 2. Underestimating Farragut property taxes (and how the town/county split works)

I get a version of this question almost weekly: "What's the Farragut property tax rate?" The answer surprises people, and it surprises them in a good way. The Town of Farragut has no municipal property tax of its own and hasn't since the town was chartered in 1980 — Farragut funds itself largely through sales tax. Residents inside the town limits pay only the Knox County property tax, which is currently $1.5540 per $100 of assessed value for the 2025-2026 tax year. Tennessee then assesses residential property at 25 percent of appraised value, which puts the effective rate against full market value at roughly 0.39 percent. I cover all of that in more detail in my Farragut property taxes explained for newcomers post.

So why is this a "biggest mistake"? Because relocating buyers often write their budget against the wrong number. Someone moving from California assumes Tennessee taxes will be higher than they are. Someone moving from Florida assumes they will be roughly the same. Buyers staying inside Knox County but moving to a town that does levy a municipal tax — Knoxville proper, for example — sometimes don't realize that line will appear on their bill on top of the county rate. And reappraisal years can move the bill in either direction.

The fix. Ask your agent and lender to estimate the actual annual tax bill on the specific homes you're considering, not a citywide average. If you are deciding between an address in unincorporated Knox County and an address with a municipal layer, get both bills modeled. Then run the all-in monthly housing payment — principal, interest, taxes, insurance, any HOA — and decide whether it fits your life. The Knox County Trustee posts current rates publicly; your lender should be able to plug them in for you.

Mistake 3. Ignoring HOA quirks (Fox Den, Village Green, Andover, Berkeley Park, McFee)

Farragut is not one homogenous HOA market — it's a patchwork. Established neighborhoods like Fox Den have an active HOA with mature amenities (tennis, pool, country-club access for members) and dues that reflect that. Village Green runs a similarly engaged HOA. Andover is newer and tends toward lighter HOA dues and a thinner amenity package. Berkeley Park sits at the luxury end, with strict architectural covenants and a higher dues line. The McFee Manor area is genuinely mixed — some sections are HOA, others are not, sometimes within a block of each other.

Here's where first-time buyers get hurt. They fall for the curb appeal, they get the keys, and then they discover the rules. The wrong storage shed, the wrong fence height, the wrong shade of front door, an RV parked overnight, a basketball goal in the driveway, a backyard chicken coop that seemed perfectly normal in their last neighborhood — any of these can trigger a notice and a fine. Worse, some buyers don't realize until escrow that there is a transfer fee, a capital contribution, or a working capital assessment due at closing.

The fix. Before you write an offer in any Farragut subdivision, request the HOA documents — the covenants, conditions, and restrictions ("CC&Rs"), the current budget, the most recent meeting minutes, and a copy of any special assessment history. Read the architectural rules in particular. If you have a boat, an RV, a home-based business, or any lifestyle question mark, look for the answer in the documents before you commit. I'm a REALTOR®, not a Tennessee attorney — any HOA document you actually sign should be looked at by one.

Mistake 4. Being blindsided by closing costs

First-time buyers spend nine months planning their down payment and a weekend planning their closing costs. Then they get their first loan estimate and the number startles them. In Tennessee, closing costs for a buyer typically land somewhere in the rough range of 2 to 4 percent of the purchase price, depending on loan type, inspections elected, title-company fees, and whether the seller agrees to contribute anything. On a $500,000 Farragut home, that range is roughly $10,000 to $20,000 — and that's on top of the down payment, not part of it.

What goes in that bucket? Lender fees, title search and title insurance, the survey if you order one, recording fees, transfer taxes, prepaid items (a chunk of property taxes, a year of homeowner's insurance, often a few months in escrow), the appraisal, and any inspections you elect. Some of those are negotiable. Many are not.

The fix. Two things. First, ask your lender for the loan estimate early in the process and read every line. Second, ask your agent how seller-paid closing costs typically work in the price band you're shopping. In some Farragut price points and market conditions, asking the seller to contribute toward closing costs is standard practice. In others, it is the move that kills your offer. Your agent should know the difference.

Illustrative only — confirm with your lender and a CPA.

Mistake 5. Waiving the inspection to win a bid

This one is bigger than people realize. In a competitive Farragut market, a first-time buyer hears that a stronger offer in a multiple-bid situation often means waiving the inspection contingency. The instinct, especially on a house you love, is to do whatever it takes. The instinct is usually wrong.

The home inspection is the buyer's single most valuable protection during the contract period. A good Farragut inspector finds things you cannot — an HVAC system that's reaching the end of its life, water staining in a crawl space, an aging architectural shingle roof, a deck whose ledger isn't flashed, a water heater installed without a permit, a previous addition done without one. Any of those can be a four- or five-figure problem after closing. The cost of the inspection is a few hundred dollars. The cost of skipping it can be tens of thousands.

The fix. Almost never waive the inspection outright. There are middle-ground moves that make your offer more competitive without giving up the protection: a shortened inspection window (say five business days instead of ten), an inspection limited to a dollar threshold (you'll only ask for remedies above $X), or an "information-only" inspection that lets you walk based on findings but not negotiate repairs. Talk through the options with your agent before you write the offer, not after.

Mistake 6. Ignoring the PMI and insurance math

If you're putting less than 20 percent down on a conventional loan, you'll almost certainly be paying private mortgage insurance — PMI — until you reach an equity threshold (the rules vary by loan, and the federal Homeowners Protection Act sets specific cancellation triggers worth asking your lender about). PMI can add anywhere from roughly $50 to several hundred dollars to your monthly payment, depending on credit score, loan-to-value ratio, and loan type. It is a real number and it deserves a real seat at your budgeting table.

Homeowner's insurance is the other line item first-time buyers tend to underbudget. Insurance carriers have been re-rating East Tennessee policies in recent years. Roof age matters. Distance to a fire hydrant matters. Whether the home has aluminum wiring, a fuel-oil tank, a wood-burning stove, an in-ground pool, or a trampoline matters. The quote you get on a tidy, recently re-roofed 2010 build in Andover and the quote you get on a 1985 home in Fox Den can be meaningfully different even at similar price points.

The fix. Ask your lender, in writing, how much PMI will add to your monthly payment at your exact down payment and credit profile, and when it can be removed. Get an actual insurance quote from at least two local agents on each property you make an offer on — before the inspection contingency expires, not after. I'm a REALTOR®, not an insurance agent. Use real quotes, not averages.

Mistake 7. Choosing the wrong loan product for your situation

"30-year fixed" is the right answer for many first-time buyers in Farragut. It is not the right answer for everyone. There are FHA loans (lower down payment, more flexible credit, but with mortgage insurance that often doesn't drop off the way conventional PMI does). There are VA loans for eligible veterans (no down payment, no PMI, very competitive rates). There are USDA loans in qualifying rural-designated parts of Knox County. There are conventional loans at varying down-payment levels. There are physician loans. There are state-program first-time buyer loans through THDA. And there are increasingly creative seller-paid rate buy-downs you can ask the seller to fund — I get into those in my post on Farragut rate buy-downs.

The "best" loan depends on your down payment, your credit score, your career stage, how long you expect to stay in the home, and whether you have other tax-advantaged uses for the cash you'd put down. The mistake first-time buyers make is picking the first loan their first lender suggests, without comparing alternatives.

The fix. Get quotes from at least two lenders. Ask each one to lay out two or three loan structures for your situation — a 30-year fixed, an FHA option if applicable, and one of the lower-down-payment conventional products — with the all-in monthly payment for each. Compare. Then ask your agent which structure other recent first-time buyers in your price point have used successfully. I'm a REALTOR® and not a mortgage professional. The lender's loan estimate is the document that decides, and a CPA is who tells you the long-run tax math.

None of these seven mistakes are about being foolish. They are about being new to a process that has dozens of moving parts, in a town with its own particular quirks, with a contract clock running. The first-time buyers I work with who avoid all seven do it the same way every time — they slow down on the front end, they ask the boring financial questions early, and they have someone in their corner who has seen these specific Farragut subdivisions and these specific lender conversations play out a hundred times before.

Frequently Asked

Frequently asked about Farragut first-time buyers

• Do I really need a pre-approval before I start looking at homes in Farragut?

  Yes — and you want a full underwritten pre-approval, not a five-minute online pre-qualification. A real pre-approval means a lender has reviewed your pay stubs, W-2s, tax returns, and credit, and has issued a commitment letter you can attach to an offer. In a tight Farragut market, that is the difference between a seller picking your offer and picking the buyer next to you. Hilary is a REALTOR® — not a mortgage professional, CPA, or attorney. The figures and timelines mentioned here are illustrative only. Confirm anything you plan to act on with a licensed lender.

• Does the Town of Farragut have its own property tax on top of the Knox County tax?

  No. The Town of Farragut has no municipal property tax and has not levied one since the town was chartered in 1980. Farragut residents pay only the Knox County property tax, currently $1.5540 per $100 of assessed value for the 2025-2026 tax year. Tennessee assesses residential property at 25 percent of appraised value. Hilary is a REALTOR® — not a CPA, tax attorney, or financial advisor. Confirm any number you plan to act on with a CPA or the Knox County Trustee.

• Are all Farragut neighborhoods part of an HOA?

  No. HOA coverage varies dramatically across Farragut. Established neighborhoods like Fox Den and Village Green have active HOAs with amenities and dues. Newer subdivisions like Andover often have lighter HOAs. Luxury enclaves like Berkeley Park can have strict covenants and higher dues. The McFee Manor area is mixed — some sections have an HOA, others do not. Always read the covenants, conditions, and restrictions document for the specific address before you write an offer. Hilary is a REALTOR® — not an attorney. Any HOA document you sign should be reviewed by a Tennessee attorney.

• How much should a first-time buyer budget for closing costs in Tennessee?

  A reasonable planning range for closing costs in Tennessee is roughly 2 to 4 percent of the purchase price for a buyer, depending on loan type, inspections elected, and whether the seller agrees to contribute. On a $500,000 Farragut home that is roughly $10,000 to $20,000 separate from the down payment. The figure varies materially by loan program and individual situation. Hilary is a REALTOR® — not a mortgage professional, CPA, or attorney. The figures here are illustrative only. Your lender's loan estimate is the document that controls.

• Should a first-time buyer ever waive the home inspection to win a bid in Farragut?

  Almost never. The inspection is the buyer's single best protection against discovering an expensive surprise after closing — a failing HVAC, a wet crawl space, an aging roof, an unpermitted addition. There are middle-ground options that keep the offer competitive without giving up that protection, like a shortened inspection window or an information-only inspection. Talk through the trade-offs with your agent before waiving anything. Hilary is a REALTOR® and is not a home inspector or attorney.