Knoxville Tennessee Real Estate Blog

I get inquiries often from buyers who find the cost of buying a home to be a bit overwhelming.

But after we sit down and I lay out the benefits of actually owning a Knoxville home of your own versus continuing to rent one they almost always see the financial and other intangible benefits of buying now.

Here’s how you can do your own analysis.

Currently our average sales price in the Knoxville, Tennessee area is around $165,000 for a typical 3 bedroom, 2 bath home with a 2 car garage. A home like this would typically rent for $800-1,000 a month.

In this market I can usually negotiate seller paid closing costs into a sale so your cash to get into a new home would be $0; that’s right, you can still get $0 down mortgages at affordable rates in Knoxville, Tennessee.

Here are the numbers for a 5 year, buy vs. rent scenario.

When you combine the tax benefits of owning a home, the annual appreciation in value, plus the investment benefits, it almost always makes more sense to buy than continue to rent.

Visit www.KnoxvilleHomeCenter.com to find some great choices in homes to buy then let’s get started buying you a Knoxville home of your own instead of renting and helping your landlord buy the home or apartment you’re in now.

I noticed in today’s Originator Times, a website for mortgage loan originators, that Fannie Mae is loosening up their guidelines for down payment policies by going to a national, single down payment policy to replace the now required higher down payments in markets where home prices are declining. Knoxville, Tennessee BTW is not one of these markets; our home prices increased about 2% over last year’s prices.

However that still does not make them competitive with FHA insured mortgages in the greater Knoxville, TN area because of their “risk based” interest rates and higher mortgage insurance premiums for borrowers getting a mortgage for more than 80% of the value of the home they’re buying.

Current Fannie Mae requires you to accept a higher interest rate for lower credit scores, which translates into higher monthly payments, if your credit score is under 720 which is really a pretty decent score. If your FICO score is below 620 you would be looking at an interest rate over 7% today for a Fannie Mae loan.

In the Knoxville area the new FHA loan limits are up to a $271,000 sales price and you can still qualify with a credit score as low as 580!

If buying a home in the Knoxville or Farragut area is in your future I invite you to call me and let’s talk about how we can make that happen for you.

There is a big selection of homes for sale, interest rates are both attractive and available (contrary to what you hear in the news), and it’s a buyer’s market in Knoxville, Tennessee.

You can view Knoxville, Farragut, Maryville, Oak Ridge, and other area homes for sale on my website, www.KnoxvilleHomeCenter.com.

In honor of National Tourism Week many of Knoxville’s attractions offered free admission on this past Saturday, May 10th.

The majority of these attractions are free every day but some have an admission charge so it was a good day to have a family outing with little expense.

Admission free was:

• Armstrong-Lockett House: Also known as “Crescent Bend” because it sets on a bend in the Tennessee River This mansion, known as the Armstrong-Lockett House, is a magnificent home built in 1834 and positioned as a centerpiece on 600 acres of rolling Tennessee land between the river and the mountains. Painstakingly restored in 1977, the interior is authentic 18th century furniture and artwork. The silver collection dates back to 1640. The Italianate gardens are a combination of terraced levels, classic fountains, and thousands of colorful blooming plants. Closed most weekend afternoons during the spring and summer for weddings so please call ahead to confirm that it is open. Normal admission is $7 for adults, $5 for seniors and students.

• Blount Mansion: Built in 1892 by William Blount, Tennessee’s first governor. This home was also the Governor’s mansion when Knoxville was Tennessee’s capital city. Normal admission is $4.95 for adults, $2.50 for ages 6-17, and free any day for children under 6.

• James White’s Fort: Built in 1796 by James White, the Founder of Knoxville, came here in the early 1780’s from North Carolina. He had fought in the Revolutionary War and was given a land grant of 1,000 acres for his service. James White laid off part of his land in October 1791 to establish a town which would become known as Knoxville, named for Henry Knox, president Washington’s Secretary of War. Sixty-four lots were laid off in 16 blocks, each lot being one half acre in size. The cost was $8.00 per lot and a lottery drawing was held to assign the lots. Much cheaper than today’s prices. Normal admission is $4, children under 12 $2.50, and under 6 free.

• Knoxville Museum of Art: The KMA’s predecessor, the Dulin Gallery of Art, opened in 1961 in a beaux-arts mansion in West Knoxville. By the middle 1980s the Dulin had outgrown its quarters, and a major community effort raised $11 million for a new museum in downtown Knoxville at the site of the 1982 World’s Fair. The Knoxville Museum of Art opened in March 1990 in a state-of-the-art, 53,200 square-foot facility designed by renowned museum architect Edward Larrabee Barnes. Normal admission is $5 with children under 17 free. The museum also is free most Thanksgiving holidays and several days around Christmas.

• Knoxville Zoo: Adults, $16.96, Seniors, $14.95, and $10.95 for children 2-12. A little pricey but it’s a great zoo with birds, mammals and reptiles of all sorts!

• Star of Knoxville Riverboat: Great boat ride along the Tennessee River. You can see parts of Knoxville from the water that you can’t see any other way. Normal rates are $14.25 for adults and $8.95 for children 4-11.

• Women’s Basketball Hall of Fame: Last but certainly not least in the land of UT Coach Pat Summitt and the 8 time national championship UT Lady Vols. Adults normally $7.95, Seniors and children 6-15 $5.95

Knoxville has lots of free stuff especially around holiday times so residents and visitors alike need to do some research and take advantage of what our fair city has to offer.

Knoxville also has lots of great homes for sale; you can research them at www.KnoxvilleHomeCenter.com

If you’re looking to rent a home in the Knoxville or Farragut areas there are some great rentals available, but there is also a fairly new scam being operated to relieve you of your money without putting you in a house.

I communicate daily with lots of Realtors all over the country via several social networking sites and email. One of my Realtor pals from Louisiana told me today that someone had commandeered one of her listings for sale and was advertising it for rent on Craig’s List.

The person advertising this bogus rental claimed to be the wife of an oil company executive that was suddenly transferred to Lagos, Nigeria.

Hmmmm, Nigeria, that should be waving some big red flags. I used to get email all the time from people claiming to be in Nigeria that needed to send their fortune out of the country and wanted to give me a 20-40% cut if they could just stick it in my bank account for a few weeks until they could escape and get over here.

This supposed ‘wife’ had an application for potential renters to fill out and she would then overnight the keys to them so they could go inspect their potential new home.

Of course the ‘application’ wanted some bank references as “proof of your financial capability” including account numbers.

And while you were busy watching for FedEx guy to show up with your keys the scammers were busy emptying your bank accounts.

Yeah, it’s that easy if someone get hold of your bank account numbers.

Here’s what Craig’s List recommends if you’re in the market for a rental home or apartment.

• “DEAL LOCALLY WITH FOLKS YOU CAN MEET IN PERSON. Follow this one simple rule and you will avoid 99% of Internet scams.
• NEVER WIRE FUNDS VIA WESTERN UNION, MONEYGRAM or any other wire service - anyone who asks you to do so is a scammer.
• FAKE CASHIER CHECKS & MONEY ORDERS ARE COMMON, and BANKS WILL CASH THEM AND THEN HOLD YOU RESPONSIBLE when the fake is discovered weeks later.”

It appears Craig’s List is being used for other types of real estate fraud as well. This is about how crooks forge names onto deeds and then “sell” your house to unsuspecting purchasers or refinance it and pocket the loan proceeds leaving you with a new mortgage to deal with.

If you need to find a Knoxville or Farragut house or condo to buy, KnoxvilleHomeCenter.com is a great place to start your search.

And if you need to rent I can recommend some good, LOCAL, rental agencies that will put you in a house without emptying your bank account.

The January 2008 sales figures are out for the greater Knoxville area Realtors.

It appears for the first full month of the year in Knoxville we have about a 23% drop in sales volume over the same time period in 2007.

Total volume was 783 closed units for January 08 versus 1,017 for January 07.

Apparently Knoxville & Farragut sellers are still not jumping out of windows though, the average sales price for a 3 bedroom home the only declined .3% or down to $161,800 versus $162,300 in January 2007.

With interest rates still hovering near a 4 year low it remains a good time to buy a new home. Lots of Knoxville area sellers are willing to negotiate and some good buys are out there.

Visit KnoxvilleMLS.com to take a look at the inventory; call me to go look at your favorites.

And apparently not a minute too late if this recent article featuring Knox County government in the New York Times is any indicator.

“You would understand this desire if you had attended last week’s meeting of the Knox County Commission; that is, if you had the seven hours to spare. But since you probably weren’t there, and be thankful for that, here is a quick primer on local, uncivil civics so that you might appreciate the recent political clamor in this part of eastern Tennessee.”

Sad but unfortunately true, and it’s not recent it has been ongoing for too many years.

On a brighter note today is “Super Tuesday” when a big bunch of states, including Tennessee, hold their primary elections. A record voter turnout is predicted for Knoxville and Knox County. One of the best things our election commission has ever done was institute early voting; my wife and I voted last week with no crowds, no delays, just step up and cast your ballot.

The last paragraph of the NY Times story is especially meaningful. 

“Knox County of 2008 brings to mind the last scene of “Meet John Doe,” Frank Capra’s populist melodrama of 1941. The wiry newspaper editor turns to the just-thwarted political boss and, with great exclamation, says: “There you are, Norton, the people. Try and lick that!””

We’ll know if the people of Knoxville and Knox County spoke on Wednesday morning as well as what they said.

Personally I think we’re going to shout “ENOUGH!” very loudly.

While real estate “doom & gloom” continues to dominate the national news, homes sales in many parts of the country continue rolling along.

Our greater Knoxville, Tennessee is one of those “rolling along” areas.

In 2007 our total number of units sold had a modest decline, “dropping from 17,401 homes sold in 2006 to ‘only’ 15,508 sold in 2007″. However Knoxville’s average sales price jumped 4.4% to $173,700 for a typical 3 bedroom home. Obviously waiting to buy is not a good plan in the greater Knoxville area. Prices of homes continue to increase and waiting can only cost you more money for the same home.

2008 is off to a great start for me. So far in the first 3 weeks of the year I’ve closed on a $340,000 new construction home, had 3 closings from December sales, and have 1 buyer coming in this weekend for a follow up visit to pick out a new home as well as 3 local buyers ready and pre-approved to buy as soon as we find the right home for them.

I also listed a great 5 bedroom home over in Hardin Valley for $289,900; you can see it on my “Featured Homes” section of KnoxvilleMLS.com soon. I’m happy to start 2008 off with such a great listing since all my listings from 2007 are now sold and closed.

2523 Berringer Station Lane, Hardin Valley, $289,900, move in condition, big family areas, 5 bedrooms, and huge kitchen.

I talked with my favorite mortgage banker, Debbie Nieto of CTX Mortgage today about current interest rates and where they might be heading.

Debbie Nieto & Jim Lee

“With the financial markets continuing their upheaval and uncertainly mortgage interest rates have been volatile lately”, Debbie said. For example yesterday the benchmark 30 year fixed rate was at 5.25% at the start of the day. However with a huge flight of stock funds into bonds, that drove up bond prices pulling mortgage rates along with them and they settled at around 5.50% for the day.

Rates fluctuate daily so if you’re ready to buy or even if you’ve just started looking, a smart thing to do would be to call Debbie at (865) 693-6200 or email her at Debbie.Nieto@Ctxmort.com to get the best & latest information and to get pre-approved before we start looking.

The long awaited 2007 sales figures are now online for the greater Knoxville, Tennessee area.

Compiled by the Knoxville Area Association of REALTORS®, these figures present the 2007 sales activity.

It seems the greater Knoxville area continues to escape most of the real estate malaise affecting several parts of the United States. Knoxville’s sales volume posted a modest 10.8% decline, dropping from 17,401 homes sold in 2006 to ‘only’ 15,508 sold in 2007.

The Knoxville area average sales price did increase again from $166,100 in 2006 for a 3 bedroom Knoxville area home to $173,700 in 2007, a 4.4% rise.

Days on market DOM (time to sell) rose slightly from 83 days in 2006 to 92 days in 2007. However the DOM was 84 back in days in 2004 so I don’t see the 9 day increase as statistically significant.
Visit my Knoxville real estate website to find a new home for your and your family in 2008. From cottages to castles, Knoxville, Tennessee continues to be a great place to live, work, play, and buy or sell real estate.

Cute Cape Cod home in Knoxville, Tennessee

Beautiful home located in Farragut, Tennessee, a prominent Knoxville suburb.

There’s good news on the lending front for you. Knoxville, Tennessee mortgage rates continue to be below the 6% mark for the banchmark, 30 year fixed rate loan.

I recommend you call my friend Debbie Nieto to talk about mortgage rates and to get pre-approved before we start your Knoxville home search.

Debbie Nieto, CTX Mortgage Company

Additionally inventory of Knoxville TN area homes & condos for sale continue to be higher than normal so some sellers are willing to make a deal with you in order to get their home sold.

This beautiful home in The Town of Farragut sold for $425,000.

Although all my Knoxville sellers were successful (that’s right, all my 2007 listings are sold & closed) in getting a good price for their homes this year, my buyer clients bought some great homes at great prices in 2007.

I love this delightful Cape Cod styled home; it was bought for only $132,500 with a big, fenced yard & master bedroom on the main level!

So if buying a new home in the greater Knoxville Tennessee is one of your goals for 2008 please give me a call or email and we’ll get started crossing that one off your list as completed.

Visit KnoxvilleMLS.com to find some great home buys.

No, I’m not talking about ‘giveaway’ pricing, but right pricing.

In today’s market my experience with working with lots of buyers is that they look at far more homes than they used to before making a decision.

After looking at several homes and doing lots of research and online searching they become very adapt at recognizing an overpriced listing as well as one priced correctly.

This month I sold a home to some buyers that had put an offer on another home in the same neighborhood but at a price considerably below the list price. The sellers countered back at a figure very close to their original asking price.

The home they did not buy has now been on the market for almost a year and in both my buyers opinion and mine, is about $25,000 overpriced for the current market. Additionally this home is sadly in need of updating to hope to command anywhere near the asking price.

Here’s a photo of the kitchens in both homes.

$25,000 overpriced, dark, drab interior in need of updating.

Priced to sell, “move in” condition, with light & bright interior and decor. Which one would you choose?

The home they bought is same style, a similiar square footage but was priced at current market value, in ‘move in’ condition, AND was about $20,000 lower than the first home we made an offer on. The home they chose and bought was on the market 2 days when we reached an agreement with the sellers for only 2.5% less than asking. The buyers felt good about making an offer that close to the list price because they felt good about that price and saw the value.

Here are some of the pitfalls of overpricing:

• Buyers know what houses should sell for generally. If yours is overpriced they will likely pass it by for something more competitively priced.
• Buyers will look and leave because they’re expecting more in your home than the price dictates.
• You’ll attract fewer offers and offers will come in below your asking price but those offers will be closer to fair market value.
• Buyers will use your home as an example to help them buy other homes that are priced closer to the market.
• And even if you do find a willing buyer at your price you then have to pass the mortgage appraisal hurdle. Appraisers know values very, very well (that’s what they’re paid for) and if you can’t get an appraisal at your asking/selling price then no lender is going to grant a mortgage to your buyer and you can’t sell.

Visit KnoxvilleMLS.com to see some right priced homes; call me to help you pick one out.

Best wishes to all for a Happy New Year!