Heard the term due diligence and wondered what it really looks like when you buy a home in Franklin? You are not alone. This short window between contract and closing is where you confirm that the property, title, budget, and plans all line up. In this guide, you’ll learn what due diligence means in Tennessee, the key steps to take in Franklin and Williamson County, timelines that work, and how to protect your interests from offer to close. Let’s dive in.
What due diligence means in Franklin, TN
In Tennessee, due diligence is the period after a seller accepts your offer when you complete inspections, review documents, verify financing, and decide whether to move forward. Contracts here often include a defined Due Diligence Period and sometimes a Due Diligence Fee in exchange for your right to terminate during that time. Both items are negotiable and should be spelled out in your purchase agreement.
It helps to distinguish the due diligence fee from earnest money. The due diligence fee, when used, is typically paid to the seller and is usually nonrefundable if you walk away during the due diligence period. Earnest money is held in escrow and follows different dispute and refund rules based on the contract. Read these clauses carefully and ask your agent and an attorney to explain any terms you do not recognize.
Key steps during due diligence
Inspections and property condition
Start with a general home inspection that covers structure, roof, electrical, plumbing, HVAC, and major systems. In Franklin, you should also plan for a termite and wood-destroying insect inspection, radon test, and a sewer camera scope if the home is on city sewer. For properties on private systems in outlying parts of Williamson County, schedule a septic inspection and well water testing as needed. Book the longest-lead items early, keep all reports, and use them to guide repair requests or price negotiations.
Title, survey, easements, and encroachments
A title company or closing attorney will run a title search to uncover liens, easements, restrictive covenants, or judgments. Title insurance can protect you from covered title defects that surface later. Consider a survey if you want clarity on boundaries, setbacks, and potential encroachments. In Williamson County, recorded plats and easements are on file with the county’s recording office, and a survey helps you understand how those records affect day-to-day property use.
Seller disclosures and legal documents
Tennessee requires most sellers to provide a Residential Property Condition Disclosure that notes known defects and past repairs. For homes built before 1978, federal law requires a lead-based paint disclosure. Review the seller’s disclosure, permits and repair documentation, and any warranties on systems or recent work. If the property is within a historic district, confirm whether exterior changes need review by Franklin’s historic zoning authorities.
HOA rules, assessments, and budgets
If the property is in an HOA, request the full document set as soon as you go under contract. Ask for bylaws, rules, architectural guidelines, budgets, reserve studies, current dues, and any pending or recent special assessments. Review how design approvals work and note any transfer or move-in fees. Clarify whether a management company handles day-to-day operations, how violations are enforced, and the typical timeline for architectural approvals.
Zoning, permits, and permitted uses
Confirm zoning with the City of Franklin if the home sits within city limits, or with Williamson County if it is outside. Verify allowed uses, setbacks, accessory structures, and permit needs for planned projects like pools, decks, or additions. In historic areas, expect exterior changes to require design review. Understanding zoning up front helps you avoid surprises after closing.
Environmental and hazard risks
Check flood risk, especially near the Harpeth River and its tributaries. Lenders require flood insurance if a home is in a designated flood zone, but risk can exist outside mapped areas. The EPA recommends radon testing in all homes, and mitigation systems are common and effective. Depending on property age and location, you may also evaluate moisture or mold, potential wetlands, older materials, or rare underground tanks.
Financing, appraisal, and timeline coordination
Your lender’s milestones must align with your due diligence dates. Plan for appraisal scheduling and the loan commitment deadline. If the appraisal comes in below the contract price, you and the seller may renegotiate or you may need to bring additional cash to close. In competitive Franklin markets, due diligence periods can be short, so set realistic deadlines and keep inspectors, the title team, and the lender moving in sync.
Closing costs, prorations, and taxes
Expect to pay lender fees, the appraisal, and other buyer-side costs per your loan estimate and contract. Local custom can vary on who pays for the owner’s title insurance policy, so confirm that in your agreement. Property taxes are prorated at closing, and you can verify assessed values and due dates with the county offices. Review recording fees and any state or county transfer costs early to avoid last-minute surprises.
Local checkpoints for Franklin and Williamson County
- City of Franklin Planning and Historic Zoning: confirm zoning, permits, and historic district rules.
- Williamson County Planning, Codes, and Building Inspections: verify county zoning and permits outside city limits.
- Williamson County Health Department: guidance on septic permits and well testing for rural and semi-rural properties.
- Williamson County Register/Recorder: recorded plats, easements, covenants, and restrictions.
- County Assessor and Trustee: assessed values, tax status, and payment schedules.
- Local title companies and closing attorneys: title searches, title insurance, and closing coordination.
These agencies help you verify the facts you need to make a confident decision.
Your due diligence timeline and checklist
Every contract and property is unique, but this sequence works well for many Franklin buyers.
Day 0–2: Immediate actions
- Confirm your due diligence period, due diligence fee, and all deadlines in the signed contract.
- Deposit earnest money and any due diligence fee as required by the agreement.
- Order the general home inspection and priority specialists: sewer scope or septic, well water testing, and any other obvious needs.
- Request HOA documents, the seller’s disclosures, and confirmation of utility providers and whether the home is on city services or private systems.
- Ask for permits, repair records, and transferable warranties.
Day 3–10: Early inspections and tests
- Complete the home inspection and specialist inspections.
- Run a radon test, which typically requires about 48 hours.
- Obtain septic or well results and complete a sewer scope where applicable.
- If issues arise, discuss repair requests, credits, or termination options with your agent and, if needed, an attorney. Follow notice rules and deadlines exactly.
Parallel: Title, survey, and document review
- Have the title company begin the search and issue a title commitment for your review.
- Decide whether to order a survey to confirm boundaries, easements, and potential encroachments.
- Review deed restrictions, easements, HOA rules, and any special assessments.
- Confirm the property tax status and whether taxes or HOA dues will be prorated at closing.
Financing and appraisal
- Provide all requested documents to your lender and stay in close contact on appraisal timing.
- If the appraisal is low, explore options with your lender and negotiate with the seller as allowed by your contract.
Final steps before closing
- Complete a final walkthrough to confirm the home’s condition and that agreed repairs were done.
- Secure your homeowner’s insurance binder, and add flood coverage if required by your lender.
- Confirm all prorations, utility transfers, and settlement figures before signing.
Common timing in Franklin includes a 7 to 21 day inspection period, with shorter windows in competitive situations and longer periods for complex properties. Appraisal and loan commitments often take 2 to 4 weeks depending on lender capacity and property type.
Negotiation insights and risk management
- Know your terms. Understand the meaning of due diligence fee, earnest money, and how termination works in your contract.
- Prioritize long-lead inspections early, especially septic, sewer scopes, and well testing in outlying areas.
- Put everything in writing. Use clear, deadline-driven requests and deliver notices the way the contract requires.
- Consider a survey if there are additions, fences, outbuildings, or questions about setbacks and easements.
- Weigh speed against risk in hot markets. Shortening the due diligence period or waiving contingencies can make your offer more competitive, but it raises your exposure if issues surface.
- Keep every report. Inspection findings can support repair credits, pricing changes, or a decision to cancel within your rights.
For sellers: how to support buyer due diligence
- Complete the required disclosures accurately and promptly.
- Gather permits, repair invoices, system service records, and warranties for easy review.
- Provide HOA documents early and outline any transfer fees.
- Offer reasonable access for inspections and re-inspections.
- Consider pre-listing inspections for older systems or unique features to reduce surprises.
Taking these steps builds trust and can keep your timeline on track.
Work with a trusted local team
Buying in Franklin is exciting, but the details can be complex. You deserve experienced guidance that coordinates inspections, explains contract choices, and negotiates repairs with your best interest at heart. If you want a calm, professional process supported by deep Williamson County know-how, reach out to Mary Brown. Our small, senior-led team will help you navigate due diligence with confidence and move you toward a smooth closing.
FAQs
What is the due diligence period in Tennessee home buying?
- It is the negotiated window after contract acceptance when you complete inspections, review documents, arrange financing, and decide to proceed, renegotiate, or terminate under your contract rights.
How is a due diligence fee different from earnest money?
- A due diligence fee, when used, is typically paid to the seller and is usually nonrefundable if you terminate within the due diligence period, while earnest money is held in escrow under different rules set by the contract.
Which inspections are most important in Franklin and Williamson County?
- A general home inspection, termite inspection, radon test, and either a sewer scope or septic inspection depending on the property’s utilities are common priorities, with well testing for private wells.
Do I need flood insurance for a Franklin home?
- Lenders require flood insurance only if the home is in a designated flood zone, but it can be wise to assess flood risk even outside mapped zones and consult an insurance professional.
Who orders the title search and pays for title insurance?
- A title company or closing attorney performs the title search; local custom can vary on who pays for the owner’s policy, so rely on your contract and your agent’s guidance.
How do historic district rules affect my renovation plans?
- Exterior changes in designated historic areas typically need review and approval from local historic zoning authorities, while interior changes usually face fewer restrictions.
