Buyers ... Stay Informed on the Local Market

It has been said that moving and divorce are the two of the most stressful events a person or family can experience.  Divorce is a subject for another time. Let's consider the event of moving and look at some ways to make your Knoxville Home hunting trip less stressful and more effective.

Location is the first factor to consider when planning a move.  If you have children, or are planning a family, you will want to know about the schools in the area.  How about shopping centers, medical facilities, recreational opportunities and of course how far will you be from your place of employment.

So You're Looking for Knoxville Short Sales

You will likely come across dozens of Knoxville properties in foreclosure with little or no equity, that is, the seller owes at close to or more than the property is worth. In these situations, lenders are sometimes willing to accept less than the full amount due, commonly referred to a “short pay” or “short sale.”

What is an impound account?

An impound account is a trust account established by the lender to hold money to pay for real estate taxes, and mortgage and homeowners insurance premiums as they are received each month.

Where can I learn more about appealing my Knoxville property taxes?

Contact your local Knoxville tax assessor's office to see what procedures to follow to appeal your property tax assessment. You may be able to appeal your assessment informally. Mostly likely, however, you will have to go through a formal tax-appeal processes, which begin with an appeal filed with the appropriate assessment appeals board.

Are Knoxville property taxes deductible?

Property taxes on all Knoxville real estate, including those levied by state and local governments and school districts, are fully deductible against current income taxes.

What tax benefits are there toKnoxville area homeowners?

Homeowners benefit from several generous tax advantages. The most important benefit is the mortgage interest deduction. People may deduct interest paid on mortgage loans totaling up to $1 million used to buy, build or improve a principal residence plus a second home. The IRS calls such loans acquisition debt.
Points paid by the buyer or seller on a new mortgage loan for the purchase or improvement of a principal residence are deductible for the year in which the home was purchased.
Any points paid on a refinance mortgage, a loan to purchase a second home or a mortgage on income property must be spread over the life of the loan, according to Edith Lank and Miriam S. Geisman, authors of "Your Home as a Tax Shelter," Dearborn Financial Publishing, Chicago; 1993.

Are points deductible?

If you are a Knoxville buyer, and you or the seller pays points, they are deductible for the year in which they are paid only. You also can deduct any points you pay when you refinance your Knoxville area home, but you must do so ratably over the life of the loan. Consult your tax or financial advisor.

Can I deduct the loss I suffered when I sold my Knoxville area home?

The Internal Revenue Service currently does not allow deductions for losses on the sale of your own home. In fact there's no way to use a loss on the sale of your principal residence to your advantage on your income tax return.

What are the rules on capital gains when inheriting a house?

When children inherit a home, the Internal Revenue Service determines their basis in the property on the date of the owner's death. The cost basis is not the amount the owner originally paid for the house, but the property's fair-market value on the date of the parent's death.
Cost basis is a tax term for the dollar amount assigned to a property at the time it is acquired, for the purpose of determining gain or loss when it is sold.

How do I save on taxes?

Here are some ways to save money on taxes:
* Mortgage interest on loans up to $1 million is completely deductible for the year in which you pay it to buy, build or improve your principal residence plus a second home.
* Points, or loan origination fees, also are deductible no matter who pays them, the buyer or the seller.

Are taxes on second Knoxville homes deductible?

Mortgage interest and property taxes are deductible on a second home if you itemize. Check with your accountant or tax advisor for specifics.

Who gets the furnishings when a home is sold?

It depends. Fixtures, any kind of personal property that is permanently attached to a house (such as drapery rods, built-in bookcases, tacked-down carpeting or a furnace) automatically stay with the house unless specified otherwise in the sales contract. But anything that is not nailed down is negotiable. This most often involves appliances that are not built in (washer, dryer, refrigerator, for example), although some sellers will be interested in negotiating for other items, such as a piano.

Do sellers have to disclose the terms of other offers?

Sellers are not legally obligated to disclose the terms of other offers to prospective buyers.

What are some pre purchase considerations to think about?

When you buy a resale home, you can find out a lot more about the Knoxville area property and the neighborhood before you buy than when you buy a new home.

Land to support new-home developments usually is located on the outskirts of town. Potential buyers should ask the developer about future access to public transit, entertainment activities, shopping centers, churches and schools. Find out how far it is to the nearest library, for example.

Do Knoxville area builders offer financing?

Builders often include financing programs to help move more buyers into a project early on. If it's a buyer's market in the Knoxville area, you can be sure that developers will offer incentives such as low-down-payment financing.