Real Estate Markets Are Different From State To State And So Are The Rules
Real Estate Markets Are Different From State To State And So Are The Rules...It’s very true what they say about every real estate market being different. Many states are still dealing with high foreclosures in the market place, short sales and higher unemployment rates. It is my opinion that until the job market comes back the housing market will be slow to recover. This is nothing new, but why is it that some areas fare better than others? Why do some cities or neighborhoods seem to be oblivious to outside conditions in the economy?
I live and work in Madison and Huntsville Alabama area. Many haven’t heard of us and certainly don’t consider this area a hot bed of activity in the housing market. Areas such as; California, Florida, Arizona, Nevada or Illinois have been in the news because of high foreclosures and unemployment. These are also areas where real estate values experienced huge gains prior to the bust. It was unsustainable, it was obvious and yet it continued until it collapsed under its own weight. Madison and Huntsville also saw a rise in home values, but it wasn’t at all near the pace set in other areas in the news.
The market here in Northern Alabama has always been a slow, but steady growth in part due to the huge economic base that revolves around NASA, NASA contractors, the high tech companies supporting them and the Military associated with the Redstone Arsenal. In a way Madison and Huntsville has been insulated from many of the problems faced by the rest of the country in the economic downturn, but it was only a matter of time until the rest of the nations difficulties caught up with us.
Two years ago contingent offers were pretty much non-existent here, but as families moved from other areas where they had a house to sell, contingent offers began to rise and became a relatively new aspect of buying or selling a home. When out of town buyers couldn’t sell their homes, deals fell through and homes didn’t close…both new and existing home sales began to fall off. We lost jobs, business, buyers and sellers when what was happening to the economy finally showed up on our door step. It took a couple of years for those issues to find us, but we are already on the mend because of the overall improvement in the economy and the fact that “slow and steady” prevented for the most part outrageously over inflated home values. That’s not to say that we don’t have our share of underwater properties, but we are back to building; new homes, subdivisions, business and jobs.
The home buying process in Alabama is not that much different than buying property in other states. However, rules, laws and customs vary between states. In no particular order, there are a few items of note:
First, in Alabama, when making an offer on a home although it is suggested that the buyer submit a 1% earnest money check, that rule is rarely followed. I’ve seen buyer’s submit a $500 earnest money check on offers up to $150K and usually a $1000 earnest money check will be accepted for homes up to the range of $200K-$300K. Of course the larger the earnest money check, the more serious you are taken.
Alabama is a buyer beware state. There are no currently mandated seller disclosure forms although we are beginning to see them used by proactive agents and brokerages. Because Alabama is a buyer beware state, It’s very important to get a home inspection. If a client declines a home inspection I’ll ask that they sign a waiver stating in their own words, that against my advice they wave that right…it’s that important.
In some states the results of a home inspection can be used to rescind a contract to purchase if the seller will not agree to a portion or all of a buyers request for repairs. However, in Alabama a home inspection is used to inform the buyer not only of cosmetic or minor defects, but also items regarding; structural (major defects), safety, or hazardous conditions. It is these last more serious conditions that a buyer may back out of a contract if the seller will not address these issues.
An important aspect of purchasing a home in Alabama is the Termite Letter. It is a required condition of purchase contracts that the home be inspected and given a clean bill of health showing no active termite infestation. Until this year the termite letter was the responsibility of the seller, that duty is now transferred to the buyer.
Another item written into Alabama contracts is the provision that the seller leaves the utilities on through the day of closing to prevent an interruption in service to the buyers While there are other differences with buying and selling real estate in Alabama, for the sake of brevity they will be addressed in another post.
If you need a knowledgeable real estate professional in Madison Alabama or Huntsville Alabama area, why don't you let me Google that for you! I also know outstanding agents in all states and Canada should you need help relocating to a new area.