Real Estate Information Archive

Shall I sell now or wait to see what happens in the real estate market? That is a decision facing numerous homeowners in this period of economic upheaval and uncertainty. For those who are forced to leave their Montgomery AL home because of a job transfer, a need for a smaller home, and/or a desire for a smaller mortgage payment, the question becomes one of whether to rent or sell their current property. Oh, for a crystal ball…       

There are, however, some valid reasons to sell at the present time. Many in the real estate or financial fields believe that the timing for home sales may not be as opportune for a long period in the future as it is now, and they base their “sell now” advice on the following reasons:

• Would-be buyers in the fourth quarter of the year are historically serious buyers who are very apt to buy during this season. Thus, the seller may have fewer ‘lookers’ but more motivated purchasers.
• Interest rates right now are invitingly low and provide a real incentive for the serious buyer of a Montgomery AL home. These fallen rates can also be an advantage to the seller who wants to buy another home.
• If you do want to purchase another home, especially if you want to “trade up”, this is an optimum time to do so. The prices of more expensive houses have also dropped, sometimes considerably, and bargains are to be had in that market. Remember, too, that because there is a smaller pool of buyers for “high end” properties, those sellers may be more than willing to negotiate and lower their asking price.
• Renting out your Montgomery AL home rather than selling it is not a financially secure consideration. As the economy worsens, renters will be looking to pay lower rents, so your rental income may very well be less than your monthly mortgage payments and expenses, a situation you certainly want to avoid.
• The on-going foreclosure fiasco and the ensuing moratoriums positively support the idea of selling now. Many homes currently in the process of foreclosure are being removed from the market, and serious buyers are rightfully cautious about purchasing any short sale or foreclosed property. Therefore, your home, the one with a clear title and no irregularities, will be part of a new, “safe” inventory, one that will definitely attract buyers.
• Once the moratoriums are removed, many “experts” expect that there will be a glut of distressed properties on the market, a situation that will most likely drive prices down even lower and greatly swell the inventory with which you will have to compete. Add to that the fact that the end of the first quarter traditionally brings a large increase of listings, and your Montgomery AL home could be easily overlooked.

It would appear, then, that there is no time like the present to sell your home. Opportunity is knocking--don’t let it pass you by!

There were 1,381 Montgomery AL foreclosure homes for sale with 129 new foreclosures in January 2011. The average selling price of a Montgomery AL home was $158,604 and the average foreclosure selling price was $71,482 a $87,122 savings, according to RealtyTrac.com.

Foreclosure Activity and 30 Year Interest Rate

Montgomery interest rates averaged 4.76% in January while the number of foreclosed homes increased from 119 in December to 129 in January.

Foreclosure activity is based on the total number of properties that receive foreclosure filings – default notice, foreclosure auction notice or bank repossession – each month. Interest rate is based on the average 30-year fixed rate from Freddie Mac Primary Mortgage Market Survey.

Montgomery AL Foreclosure Geographical Comparison

Montgomery foreclosure activity was 0.07% lower than national statistics. 0.05% higher than
Alabama statistics, and the same as Montgomery County for the month of January.

In our present economic situation, many people are currently facing the loss of their homes. However, because foreclosure is expensive for lenders, mortgage insurers, and investors, the FHA, HUD, Freddie Mac, Fannie Mae, and private companies are being required to work with borrowers who are experiencing money problems. As a result, lenders do have workout options to help you keep your Montgomery AL home. Warning: Do not mistakenly assume that your mortgage situation will correct itself; you must take the steps suggested below to avoid, or at least forestall, foreclosure.

1. ACT NOW! Time is of the essence. Do not ignore letters or calls from your lender. If you do, chances are that action to foreclose will begin quickly.

2. CONTACT YOUR LENDER:  When you reach the lender, you should be prepared to provide him/her with your account number; a brief explanation of your circumstances; income documents or evidence of unemployment, public assistance, or business losses; and a list of your household expenses. Ask about a reduced interest rate, refinancing, lengthening the term of the loan, and a repayment plan for missed payments. In all probability, the lender will mail you a loan workout package. It is important that you complete and return these forms quickly.

3. DO RESEARCH; Reread your loan documents to determine what is said about unpaid mortgage payments. Learn about specific foreclosure laws in your state Get in touch with the government housing office where you live.

4. CONSIDER SELLING: Lenders will most likely suspend foreclosure proceedings while your Montgomery AL home is on the market and possibly even eliminate mortgage payments during this time. Explore a short sale.  If the market value of your house is less than you owe, your lender may consider taking the sale proceeds and forgiving the rest of the debt. Or you might give your deed to the lender in return for the loan balance being cancelled. Check with an attorney or housing counselor before taking these actions.

5. BEWARE OF SCAMS! Avoid “foreclosure prevention” companies who offer to negotiate with your lender, will cost you thousands of dollars, and may even “rescue” your home away from you. Do not sign anything from these firms!

6. SET PRIORITIES: Pay the mortgage on your Montgomery AL home before paying credit card debts, doctor bills, or the like. Can you sell a second car or other assets? Could you take a second job to ease the situation? Your lender needs to know that you are serious about trying to find a solution to your financial problems and are willing to make sacrifices to do so.

7. EXPLORE ALL OPTIONS:

        a. Get legitimate help. Contact a HUD approved housing counselor (1-800-569-3287) or 1-888-995-HOPE) for free or low-cost guidance. Help is also available from the National Foundation of Credit Counselors (1-866-557-2227). Also, check with your local bar association or a neighborhood legal services program for pro bono legal representation.

        b. Look into government benefits such as fuel assistance, food stamps, or property tax abatements to help you through this difficult period.

It is important that you be both aware and proactive in your fight to keep your Montgomery AL home!

Final Estimate of Value

Once the appraiser has applied the three approaches to the appraisal of your Montgomery real estate, he/she must decide which of them is the most reliable and most closely follows the actions of the market. For residential properties, the Sales Comparison Analysis is typically the most reliable. For commercial or industrial properties, all three techniques (or portions of one or more) may be reliable. The appraiser reconciles the various aspects of each technique into what he or she believes produces a credible and supportable opinion of value. The result is the Final Value Estimate, which, depending on the needs of the client, may be expressed as a single number or a range of value.

What If It's Low?

If the appraisal of your Montgomery real estate comes in low, that doesn’t necessarily mean that you can’t complete the transaction. Your options to rectify the situation included the following:

• You can make up the difference in cash.

• The seller can lower the price.

• The seller can carry a second mortgage for the difference.

• You can order a second appraisal

• You can supply a list of comparable sales and ask for a review of the appraisal.

What Does It Include?

Under the Equal Credit Opportunity Act, your lender must furnish you with a copy of the appraisal of your Montgomery real estate if you request one in writing. Appraisals are very detailed reports, but they should include the following:

• Details about the subject property, along with side-by-side comparisons of three similar properties.

• An evaluation of the overall real estate market in the area.

• Statements about issues the appraiser feels are harmful to the property's value, such as poor access to the property.

• An estimate of the average sales time for the property.

• What type of area the home is in (a development, stand alone acreage, etc.).

Do remember that an appraisal of your Montgomery real estate is not a home inspection and cannot be considered a guarantee that the property is in good condition. Appraisers make notes about obvious problems, but they do not perform tasks done by certified home inspectors.

A vital step in the home buying process is a professional appraisal of the Montgomery real estate you wish to purchase. An appraisal is an objective analysis of the property’s market value and is required by lenders to make certain that the property is worth at least as much as the amount of the loan you are requesting. Your personal approval is accomplished early in the loan process, but final commitment usually hinges on a satisfactory appraisal, and the lender will study the completed report carefully before determining whether or not the piece of real estate qualifies to serve as security for your loan.

Appraisers are experienced and knowledgeable professionals whom are licensed by the state to estimate real estate values. They must follow rules set forth in the Uniform Standards of Professional Appraisal Practice (USPAP). Once the appraiser has determined the highest and best use of the Montgomery real estate, i.e., the most profitable utilization of the property, he/she will then go about estimating the home’s market value through the use of three basic approaches.

The Cost Approach

The Cost Approach: a set of procedures through which a value indication is derived by estimating the current cost to construct a reproduction of the existing structure, deducting the accrued depreciation and adding the estimated land value. The principle of substitution is the basis of the cost approach, in that no rational person will pay more for a property than the amount for which he can obtain, by purchase of a site and construction of a building, with undue delay, a property of equal desirability and utility. Appraisers typically make use of published cost figures when calculating the cost to construct a building. These sources of data are available online and in printed form. Land value is determined by a comparison of the subject site with other similar sites that have recently sold.

The Sales Comparison Analysis

While cost and income considerations are important, the Sales Comparison Analysis is regard as the industry standard for residential properties. Appraisers get to know the neighborhoods in which they work. To assure that any effects (positive or negative) of its location will be reflected in the sales comparison analysis, the appraiser should select comparable sales from within the same neighborhood whenever possible. If this is not possible, the appraiser may need to make "neighborhood" or "location" adjustments for any sales that are not subject to this same neighborhood characteristic.

The same is true of other aspects of your Montgomery real estate, such as the size, quality and features of the buildings. Differences that the market reacts to are adjusted in the comparable sales to reflect what is present in the "subject" property that is being appraised. If a sold home features a fireplace and the subject does not have one, but the market considers a fireplace to be important, the appraiser make a downward adjustment to the sale price of the comparable sold home because it did have one and the property being appraised does not. The reverse is true when the home being appraised has a feature that other homes that have sold do not have. The basic question is what features are present in a property that buyers are willing to pay extra to get, or will pay less if it they are not there? When differences exist, the appraiser must determine how much a typical buyer will add or deduct for it.

The Income Approach

This technique is typically used in appraising income-producing properties. It is a technique whereby the gross or net income of an income producing property is capitalized at a rate which provides a return of interest on the money invested and a recapture of the capital investment in the improvement over a reasonable term of the investment. Capitalization is accomplished for simple residential properties such as rented homes or duplexes by the use of a Gross Rent Multiplier. This involves multiplying the total monthly rent of a property times a number (GRM) found by dividing the sale prices of similar properties by their monthly rents. Commercial and industrial properties involve more complex formulas to determine their value in the income approach, such as cash flow analysis.

What's your Montgomery real estate worth?

So you’ve finally found the piece of Montgomery real estate you’ve searched for months! What next? Before you sign a contract, make sure it contains a home inspection contingency, a clause stating that your offer is contingent dependent on the results of a home inspection.

A home inspection is of primary importance because it allows you to obtain an unbiased professional assessment of all the components of the property. It is a step necessary for you to decide if you will stay with your original offer, renegotiate based on documented issues and needed repairs, or back away from the purchase of that piece of Montgomery real estate altogether.

Selecting a qualified inspector is vital. Your Realtor can provide you with the names of reputable firms, or you can go online to research services offered and credentials. Specific information you should know about the inspector and the inspection process included the following:

      1. Credentials and background: Is he/she licensed in your state? Is he affiliated with any respected organizations such as the American Society of Home Inspectors? Membership in these groups requires that inspectors follow strict guidelines about ethics and continuing education. Be sure to inquire about experience and training. A construction-based background is a plus, as is attending a college with an emphasis on construction or attending a home inspection school.

    2. Fees: Although you don’t want to spend money unnecessarily, this is not a place to scrimp. Your house purchase is a very large investment, and you need to know as much as you can about it. Do remember that money spent on a quality inspection now will be returned to you by avoiding unexpected costly repairs in the future.  The price of an average inspection varies depending on the age, size, and condition of the house. Some inspectors base their fees on the list price of the Montgomery real estate. Get estimates from all you contact, but don’t assume that the lowest priced is the best choice for you.

    3. Type of report: Some inspectors use computer generated onsite reporting, some a handwritten checklist, and others a computer generated report you won’t receive for few days. By and large, the last option is in your best interests since it gives the inspector time to review his findings, look up any questions he may have, and send you a detailed, descriptive report. He should also be able to provide you with pictures of the problem areas. Feel free to ask him for a sample report.

    4. The actual inspection: Make sure that you will be allowed to accompany the inspector and ask questions as he checks out the house and grounds. This is a good time for you to become familiar with the home‘s inner workings, locate shut-off valve and breaker panels, and pick up tips on operating and maintaining different systems.

A thorough home inspection of an average home should take between 2 ½ and 4 hours and should cover both internal and external components of the property. Major items examined should include:

            a. Siding, foundation, brickwork, etc.

            b. Insulation

            c. Deck, roof, garage

            d. Attic/basement

            e. Driveway and walkways

            f. Electrical system

            g. Plumbing

            h. Doors and windows

            i. Heater, air conditioner, and hot water heater

            j. Ceilings, walls, and moldings

Having your Montgomery real estate inspected will allow you to make an informed decision about the purchase of a house and will provide you with both essential knowledge and peace of mind.

The 2011 real estate market forecast depends on who you talk to. There are conflicting signs but most experts predict a slow growth in sales nationwide. Real estate guru Barbara Corcoran has this to say about buying a home in 2011:

“Of course people are nervous about buying with so many mixed signals, but my advice would be: Do not wait. If there's one thing I learned about this real estate is that it's very slow to unwind and usually takes years to do it. But once it decides to turn around, those prices move up very quickly, and you'll just be joining every Tom, Dick and Harry bidding on the same house. If you have an inclination to move, you'll get no better time than now, with cheap money, cheap prices and an embarrassment of riches to choose from. Why wouldn't you buy now if you were so inclined?”

The only way to know when you are at the bottom of the market is when you bounce off of it. We bounced in December!

Let’s compare December 2010 to 2009 real estate statistics to see what improvement has taken place in our local market.

Midtown Montgomery real estate sales statistics for December show the average sales price increased by 2% to $142,814 when compared to December 2009.  The number of homes sold decreased by 3% in December.  The median sales prices increased 5% and market times decreased 1% or 1 day.

For the latest Midtown Montgomery real estate market conditions in your area, please call me at 800-HAT-LADY or visit HomesForSaleInMontgomeryAlabama.com.

Information is provided by the Montgomery Area Association of Realtors and is deemed accurate but not guaranteed.

Montgomery Homes for Sale:

7331 Heathermoore Loop, Montgomery AL 36117
MLS# 280858

Mrs. Clean lives here!! And you can, too! If you're tired of grimy, gloomy houses, call today to see this meticulously kept gem of a home. From the dramatic entry with hard tile floor and soaring ceiling to the master bath with its squeaky-clean double vanity and all-glass separate shower to the immaculate kitchen, every surface shines and every room welcomes. Priced to make you smile, too, so make this one-owner house your new home now!

Learn more about 7331 Heathermoore Loop and other Montgomery homes for sale by visiting HatTeam.com. 

Search all Montgomery Real Estate and homes for sale.

There were 1,250 Montgomery foreclosure homes for sale with 119 new foreclosures in December 20100. The average selling price of a Montgomery home was $144,257 and the average foreclosure selling price was $84,812, a $59,445 savings, according to RealtyTrac.com.

Foreclosure Activity and 30 Year Interest Rate

Montgomery interest rates averaged 4.71% in December while the number of foreclosed homes increased from 106 in November to 119 in December.

Foreclosure activity is based on the total number of properties that receive foreclosure filings – default notice, foreclosure auction notice or bank repossession – each month. Interest rate is based on the average 30-year fixed rate from Freddie Mac Primary Mortgage Market Survey.

Montgomery Foreclosure Geographical Comparison

Montgomery foreclosure activity was 0.08% lower than national statistics. 0.03% higher than
Alabama statistics, and 0.01% lower than Montgomery County for the month of December.

Nearly eight out of 10 Americans believe buying a home is a good financial decision, despite ongoing challenges with the economy and housing market. That’s according to the 2010 National Housing Pulse Survey, an annual report released by the National Association of Realtors®.

The survey, which measures how affordable housing issues affect consumers, also found job security concerns to be the highest in eight years of sampling, with 70 percent of Americans saying that job layoffs and unemployment are a big problem in their area; eight in 10 cite these issues as a barrier to homeownership.

Despite economic uncertainty, 68 percent of those surveyed still believe now is a good time to buy a home; while that number is down from last year (75 percent), it’s up from 2008 (66 percent) and 2007 (59 percent). Lower home prices and record-low mortgage interest rates may be attracting buyers to the housing market – more than one-fourth of renters said they are thinking more about buying a home than they were a year ago. Sixty-three percent of renter respondents said that owning a home is a priority in their future, and nearly 40 percent said it was one of their highest priorities.

Lower home prices have improved affordability. Let’s take a look at October home sales and see how improved affordability is affecting our local housing market.

Midtown Montgomery real estate sales statistics for October show the average sales price decreased by 18% to $106,826 while the number of homes sold decreased by 24% from 2009.  Median sales prices dropped 43% and market times increased 14% or 7 days in 2010.

For the latest Midtown Montgomery real estate market conditions in your area, please call me at 800-HAT-LADY or visit HomesForSaleInMontgomeryAlabama.com.

Information is provided by the Montgomery Area Association of Realtors and is deemed accurate but not guaranteed.