Knoxville, Tennessee home sellers can now qualify for a tax credit when buying.

Posted by Jim Lee, REALTOR® @ 12:41 pm, November 8th, 2009  

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

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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.

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

Knoxville, TN real estate sales and listings

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Knoxville, TN: Chart shows comparison of current and extended tax credit

Posted by Jim Lee, REALTOR® @ 11:34 am, November 7th, 2009  

Sellers will consider lease purchase for this extensively redone home, 5 minutes to downtown Knoxville.

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Below is a chart prepared by the National Association of REALTORS ® comparing the new changes to the Homebuyer Tax Credit.

The biggest change is that current Homeowners are now eligible if they sell their current homes and then buy AFTER the date of enactment of this extension which is November 6th, 2009.

Comparison of existing tax credit to extended and expanded version

Comparison of existing tax credit to extended and expanded version

www.KnoxvilleHomeCenter.com has all of the Knoxville TN area listings to view. Updated daily and NO REGISTRATION required to view home.

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It’s official! Homebuyers tax credit has been extended

Posted by Jim Lee, REALTOR® @ 9:23 am, November 7th, 2009  

Buy this terrific north Knoxville home and get up to $8,000 in tax credits to help.

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It’s now official, President Obama signed an extension of the existing $8,000 homebuyers tax credit into law yesterday (Friday, Nov. 6th).

The new law extends the existing tax credit for Knoxville area buyers who have not owned a home that was their principal residence in the past three years and adds some new criteria and qualifying homebuyers.

The $8,000 credit was scheduled to lapse on December 1st, 2009 but will now be in effect through the end of June. Homebuyers must sign a contract before April 30, 2010 and close by June 30, 2010.

The income limits have been raised; Single buyers can now earn up to $125,000 and still get the full credit while a married couple can earn $225,000.

The bill also made more Knoxville, TN homeowners eligible to claim the credit on their taxes. First-time buyers — those who have not owned a home in the past three years — still qualify for an $8,000 rebate. But now people who want to trade up can also qualify. Those who have owned and occupied a residence for at least five years out of the past eight can claim a $6,500 tax credit if they close on a purchase by the end of June.

Some real estate industry experts weigh in on the extension:

“This bill will shift demand from the second half of 2010 into the first half,” said Pat Newport, a real estate analyst with IHS Global Research. “As a result, home sales and prices will get a boost in the first half of 2010, with payback in the second.”

“That’s not a bad thing, according to Bill Kilmer, vice president of advocacy for the National Association of Home Builders. It’s important to stabilize real estate markets quickly to help bring the economy out of its tailspin.”

The National Association of Realtors’ chief economist has this to say about the extension:

“The industry thought the credit would provide a ripple effect, with sales to first timers triggering as many three additional “move-up” sales.”

That did not happen, according to Lawrence Yun, NAR’s chief economist.

“It did not have the chain reaction impact it was supposed to,” he said. “Instead, many first-timers turned to vacant, foreclosed or other distressed properties the sellers of which were unlikely to be move-up buyers.”

So, the tax credit helped prop up the low end of the market without having much impact on the rest of the spectrum. Expanding the benefit to existing homeowners should boost those segments. That should produce additional benefits, according to Yun.

“Preventing further price decline or even nudging prices up a bit stabilizes housing wealth, which makes homeowners more comfortable in their spending,” said Yun. “They’re more likely to go out to the stores or buy a new car. That provides a boost to the overall economy.”

So let’s get busy Knoxville and Farragut homebuyers, it’s not that long until April 30th. Visit www.KnoxvilleHomeCenter.com today and pick out your favorite Knoxville area homes to go look at.

Call or email me with any questions of comments. (865) 693-3232

Knoxville and Farragut Tennessee homes for sale

Knoxville and Farragut Tennessee homes for sale

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Knoxville, TN: Homebuyers $8K tax credit extension may pass this week.

Posted by Jim Lee, REALTOR® @ 10:38 am, November 5th, 2009  
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This delightful home above has been reduced to $184,900 and will qualify for the $8,000 federal tax credit if you have not owned a home in the past three years. Click the Visual Tour above to see a virtual tour and then call me to schedule a private showing.

** UPDATE** The extension passed the Senate vote today and President Obama said he would sign it on Friday!

It looks like the extension of the $8,000 federal tax credit for Knoxville & Farragut TN area homebuyers is almost done.

RISmedia is reporting today (November 5th) that the Senate voted to cut off debate and bring the measure to the floor for a vote and then pass it on to President Obama for signature by the end of this week.

President Obama has already said he intends to sign the legislation.

The homebuyer tax credit, due to expire at the end of November would be extended through April 30 of next year. First-time buyers who are in the process of making a purchase would not need to worry about qualifying for the $8,000 credit if they close after the November 30 deadline.

For the first time, the legislation that was recently cleared makes move-up buyers as well as first-time buyers eligible for a credit. The $8,000 maximum first-timer credit will continue and will now be available to couples with income up to $225,000, a nearly $55,000 increase above the level in existing law. A new $6,500 maximum credit would also be available to move-up homeowners who have lived in their current residence for five of the prior eight years.

I’ll keep you updated as this bill moves quickly toward becoming law.

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Knox County Real Estate Transfers for the week of November 1st

Posted by Jim Lee, REALTOR® @ 10:40 pm, November 1st, 2009  
7412 Harvest Creek Lane, Powell, TN 37849

7412 Harvest Creek Lane, Powell, TN 37849

It appears the malaise in the Knoxville area real estate market continues this week as it has for the past weeks in 2009.

The Knox County Register of Deeds office reports 170 real estate transfers for the past week, a touch above the average 150 per week we’ve had all year but well below the 200 mark only reached three times in 2009.

Knoxville area real estate transfers for the past week.

Knoxville area real estate transfers for the past week.

John Walsh, the President of Data Quick had this to say about the ‘national’ real estate market: “This market may be closer to normal than it was a a half year ago, but it’s still out of kilter, fueled in large part by incentives and the processing of distressed properties. The sales mix is still lopsided, tilting toward the low end, and lending institutions are only making really safe mortgage loans. For those who can buy, there are some very attractive opportunities. But it still looks like a lot of normal supply-and-demand activity has been put on hold until the economy comes back.”

And Mr. Walsh’s conclusions support what the Knoxville area area has been doing all this year. The majority of sales have been in the $100,000 to $150,000 week in and week out while the higher end ($500,000 and up) has been largely stagnant. Knoxville’s current median price for a 3 bedroom home is $139,900 which is down from $159,900 a couple of years ago.

Based on the most current sales data available from the Knoxville Area Association of Realtors here’s a recap of the local market for the past 5 years.

Year to date Knoxville TN area sales compared to past years

Year to date Knoxville TN area sales compared to past years

I’m going to be very interested to see if that 60 home ‘spike’ this past September continues on into October when those figures come out. Historically the Knoxville real estate market has been in a seasonal decline by now but as the chart shows, 2009 is holding up past the downturn points. I believe most, if not all of this modest strength is due to the $8,000 tax credit buyers that have not owned a home in the past 3 years can qualify for if they buy a new or resale home.

It’s almost a sure thing now that Congress is not only going to extend the $8,000 tax credit for new home buyers who meet the income restrictions but also make it applicable to existing home buyers in some fashion.

The most likely bill to pass calls for the inclusion of a $6,500 credit for current homeowners who sell their existing home they have occupied for at least the past 5 years and then buy a new one. This pending bill is set to expire next April and sales contracts signed by that date would then have an additional 60 days to close. Final action should happen sometime this month. I’ll be following these bills closely as they make their way through Congress and keep you posted.

Buyers should visit www.KnoxvilleHomecenter.com to see all of the Knoxville and Farragut Tennessee area Realtor listings and contact me to see your favorites.

knoxville tn real estate listings

knoxville tn real estate listings

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