Buying Basics - What Every Homebuyer in North Alabama Needs To Know Right Now
Regardless of what the news is saying, as a homebuyer in today's market, you need to understand that every market is different. I generally work in two extremely different housing markets (the Shoals and Huntsville), and in order to sell houses in both of those markets, I have to understand the trends and the tripping hazards of each. Every single real estate market in the U.S. has it's own ups and downs, and can be completely independent of the trends of the rest of the country as a whole. After selling real estate for North Alabama for six years, hopefully this blog post can give you some insights on what trends we are seeing in real estate of North Alabama.
We're not out of the housing crisis quite yet, but that doesn't mean buyers need to be going all "Chicken Little" on us by worrying about the sky falling anytime soon. If you're now in a position to responsibly buy a house, you'll be hard pressed to find a better time to buy than now. Home prices have gone down in parts of North Alabama, more so in the Shoals than in the Huntsville market. Interest rates have risen just a tiny bit in the last couple of months, but we're still at less than 5%... which is an amazing rate! What I'm trying to say is that if you have a steady income, good credit, a decent amount of down payment money, and want to buy a house... then buy a house! Don't fall into the fears that the media is feeding you everyday. There is no reason to sit by until prices and interest rates go up.
Having said all of that, here are a few of my personal insights that may help you as you jump head first into today's market in North Alabama:
- Inventories are relatively high, and houses are taking a little longer to sell. Everyone should already know this, but what you may not know is that many sellers aren't quite as desperate to sell as the media has made us to believe. Don't assume that every seller is going to accept your low ball offers. Unless this individual is trying to avoid foreclosure or bankruptcy, they might opt to keep their house on the market a little longer until someone gives them the price they want. Every seller's situation is different, and may be selling for very different reasons.
- Financing is key in today's market. Banks and mortgage companies are being tough on our homebuyers out there, and are turning down lots of people for loans these days. This shouldn't discourage you from trying, but before you go house hunting, talk to a mortgage company or bank first. Sellers know that banks are being tight with their money, and want to know you have access to funds if you're going to bring them an offer. Get a pre-approval letter before you start looking. This will not only solidify your offer, but can also tell you what price range you should be looking in for a home.
- In today's market, it's important to know what kind of seller you're working with. There are basically two different kinds of sellers out there today in North Alabama. Seller #1 is the seller that can afford to sit and wait on the right offer to come along. Seller #2 is the seller that is broke and trying to avoid foreclosure. Seller #3 is a bank trying to get rid of foreclosure inventory. The houses owned by these three different types of sellers are going to look different, the sellers are going to negotiate differently, and it could be more or less difficult to get to the closing table depending on who the seller is. Make sure you have an agent that understands this as well. If not, I'd be glad to help!
- Buying bank-owned foreclosures is great...if you have the money, time, and skills to fix it up! It's enticing to see inexpensive foreclosed homes all over our market in Florence, Muscle Shoals, Huntsville, Madison, Athens, Decatur, and the rest of North Alabama. You should know that just because the price tag is low doesn't mean that it's a great deal. You need to have the expertise necessary to know about structural, mechanical, electrical, and other problems you might be buying along with it. Have you planned on what it's going to take to replace flooring, paint, roofing, appliances, or plumbing fixtures? Unless you're skilled in home repair, or are ready to hire someone who is, most bank-owned, foreclosed homes may not be the right choice for you and your family. You should also note that many of these homes also have a one year right-of-redemption attached to it, which means if the previous owner comes up with enough money to pay his/her debts, plus any necessary improvement costs, they could possibly swipe the home out from under you. This is a rare scenario, but it can and does happen. I've seen it.
Please let me know if you are thinking about buying a home. I'd love to counsel with you as you make this life-altering decision. Many real estate agents are struggling to pay their bills in this tough market, but make sure you choose one that has the foresight and the knowledge necessary to help you make the best decisions. I can guide you through the complicated, yet satisfying process of buying a home in our beautiful North Alabama.
Joshua B. Pettus
Home Grown Real Estate
256-272-1050 - The Shoals
256-541-0491 - Huntsville