Knoxville Tennessee Real Estate Blog

Should I buy a home in Knoxville, Tennessee now? A question lots of potential buyers are asking themselves now.

So what’s the answer? The answer depends a lot on you and the reasons you’re thinking of buying.

Generally if you plan to live in any home you buy in Knoxville for at least the next 3 years now might be a good time for you to buy for the following three reasons:

1. You may be eligible for a new federal tax credit of up to $8,000 that is only available this year for home purchased and closed before December 1st. After that this credit goes away. You can also collect that credit this year even if you’ve already filed your 2008 return by filing an amended return (form 1040X) or you can wait until next year and collect it on your 2009 return.
   Here’s how that $8,000 tax credit works. First of all it’s a credit and not a deduction like mortgage interest is.

   A tax credit results in a full $8,000 deduction from your taxable income whereas an $8,000 tax deduction would only result in a percentage savings based on what tax bracket you happen to fall into. For example if you’re in the 25% bracket you would only be able to claim 25% of $8,000 or $2,000. And this tax credit is fully refundable which means if your tax liability is less than $8,000 the IRS will refund to you the difference in cash.

   Here’s some information from the IRS website that explains more.

2. Interest rates are at their lowest point ever; you should be able to get a fixed interest rate under 5%. Right now in Knoxville $729 dollars is the average rent for a 2 bedroom apartment. at 4.5% interest, $729 is the principal and interest payment on a $143,800 home mortgage.

1 Bedroom 2 Bedrooms Rental rates for 1 & 2 bedroom Apartments in Knoxville, Tennessee

If you buy a Knox County home for, let’s say $150,000 at 4.75% interest and pay the minimum 3 1/2% down that FHA financing requires, your principal interest payment on your $144,750 loan will be $755.08. If rates were 7% that payment would jump to $963.03 and at 9% be $1,164.69. Most Knoxville area renters now are paying at least $750 or more in monthly rent so why not be working towards owning your own home plus getting $8,000 from the IRS to help you buy it.

3.  There is a huge selection of homes for sale and sellers are motivated to either discount their price, help with your closing costs or in some cases do both. I’ve had buyer clients get some great deals this year and in fact have a closing today where a seller is paying $6,000 towards my buyer’s closing costs. Had a sale last month and a very motivated seller not only cut the sale price $7,000 and paid another $7,000 towards my buyer’s closing costs, they also threw in the very nice living room furniture. Today in Knox County alone there are 2,710 single family homes priced between $50,000 to a maximum of $300,000 and 982 condos that meet the same criteria. That’s over 3600 choices for you in those price ranges and all locations. That’s also a bunch of sellers that want to sell.

KnoxvilleHomeCenter.com is a great source that has all the Realtor listings in the greater Knoxville and surrounding areas.

Here’s just a few of the great buys you can get right now in the Knox County and Knoxville areas.

Affordable Farragut one level with large yard for only $149,900.

East Knox County home is brand spanking new and only $189,900

One of the nicest and most convenient areas of Farragut and only $239,900

Search all of Knoxville’s Realtor listing at KnoxvilleHomeCenter.com and let’s pick you out one soon.