Knoxville Tennessee Real Estate Blog

World class screened porch on this 4 bedroom Gulf Park beauty, move in condition.

Another week has passed in Knoxville, Tennessee and here’s the passed week’s real estate transfer report form the Knox County Register of Deeds for Knoxville area and Farragut real estate sales.

It appears from the statistics below there were 160 Knoxville area real estate transfers recorded, the breakdown remains typical of the year, we’ve averaging around 150 transfers per week to date in 2009.

The vast majority of sales are lower end properties with the higher end very slow to move. The 2 sales over 1 million dollars were the Lanesborough and Derby Run apartment complexes in the town of Farragut so no single family residential sales over a million bucks this week.

Some good news for the Knoxville market for a change, Congress passed an extension of the $8,000 tax credit for qualifying buyers.

The credit was scheduled to expire at the end of November but it is now officially extended until April 30th of 2010 and buyers still have an additional 60 days past that date to get their home purchase closed. With financing and appraisals taking much longer than normal in today’s Knoxville area real estate market you sometimes need every one of those 60 days to get your transaction to the settlement table.

Some additional changes to the tax credit were that it has now been expanded to include current homeowners who sell their existing home and then buy again. They are now eligible for a $6,500 tax credit when buying if they have lived in the home they sell for at least 5 of the past 8 years.

Knoxville Homes For Sale

Knoxville Recently Sold Homes

Some new limits on income (higher) and requirements when filing for the credit, I wrote a recent post about that here.

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This spectacular log home sets amid 6.9 tabletop level acres in a beautiful area of the Cumberland Plateau. $355,000

Congress passed a bill extending the current $8,000 tax credit for persons buying a home who have not owned one in the past three years that was their principal residents. President Obama signed it this past Friday, November 6th, so it’s now official.

But the new bill has an addition for current Knoxville, TN homeowners who want to sell their current home and buy another. If you own your home now, sell it and buy another before April 30th of 2010 you probably qualify for a $6,500 tax credit like the ones buyers have enjoyed this year. ($3250 if you’re married and file separately).

As long as you have a sales contract dated April 30, 2010, you have up to 60 days past that date to get the newly purchased home closed.

The new extension also increased the income limits for all home-buyers. Single buyers can earn up to $125,000 and married couples can earn as much as $225,000.

Before there was no limitation on the cost of your new home; it’s now a maximum sales price of $800,000. I suppose the rationale for this is that the former income limits of $75,000 for a single taxpayer and $150,000 for married buyers was a self limiting mechanism that did not need to be spelled out. Now that selling an existing home enters into the mix with the potential for equity from selling an existing home, I guess Congress felt they needed some sort of purchase price cap.

The income limits were increased in hopes the new higher ceilings will stimulate the purchase of more expensive home. Before the existing tax credit was mostly driving the sales of lower end homes priced at $150,000 and below. With the income limits now increased and current homeowners allowed to participate too that should raise the average sales price of Knoxville and Farragut homes bought with this program.

To cut down on some fraudulent tax returns submitted by taxpayers who did not qualify for the tax credit buyers now have to submit some documentation as proof you actually bought a home and that you qualify for the credit. I believe a copy of your HUD 1 form (closing statement) would qualify as proof but you should check with the IRS or your tax preparer to make sure.

Treasury Inspector General for Tax Administration J. Russell George told a House panel that more than 19,000 people filed 2008 tax returns claiming the credit for homes they had not yet purchased. George said his office had identified another $500 million in claims, by some 74,000 taxpayers, where there were indications of prior home ownership.

He told a House Ways and Means oversight subcommittee that they also found 580 taxpayers under the age of 18 who claimed $4 million in first-time home buyer credit. One was 4 years old.

“Some of our findings, while preliminary, are somewhat disturbing,” George said. Among the most striking instances of fraud include 4-year-olds, non-U.S. citizens and IRS employees inappropriately claiming the benefit, he said.

Below is a chart from the National Association of REALTORS® comparing the new tax credit extension to the current one and spelling out the terms and conditions.

Comparison chart showing the existing bill compared to the new, extended version.

So if you’ve been sitting on the fence waiting to buy or, if you couldn’t qualify because of needing some cash for closing costs, this new law levels the playing field for both new buyers and current homeowners who want to sell and buy.

www.KnoxvilleHomeCenter.com is a great place to get started looking at Knoxville and Farragut TN homes and listings for sale. Updated daily and NO REGISTRATION required to search to your heart’s content.

I would be delighted to help you get your current home sold and then buy another either in the Knoxville area or I can refer you to another top notch REALTOR in the city you’re moving to.

Please call or email with any questions about the tax credit or any buying and selling questions.

Knoxville, TN real estate sales and listings

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