Be Careful! Alabama Isn’t Like Everywhere Else.
South Alabama is an attractive destination for a lot of people from outside Alabama seeking a vacation home or shelter from northern climes. Because our Alabama laws are very different from other states, I thought I should share with you a quick overview of how real estate sales persons in Alabama work.
Alabama is a “Caveat Emptor” (Buyer Beware) state. I’ve written 3 blog posts which cover in depth what this means for you. See Caveat Emptor and Alabama Real Estate , Your Four Choices , What Type of Real Estate Agent Should I Pick for additional information.
In Alabama a real estate sales person can represent you as an Agent or as a Transaction Broker (transaction “facilitator”).
“Real Estate Agent” is a common term applied to real estate sales persons but in its common usage here “Agent” doesn’t mean that the sales person is acting in Agency. And this is important because unless a written Buyer’s Agency agreement is signed, under Alabama Law, the sales person is acting as a Transaction Broker (facilitator).
You need to be represented as a Buyer in Alabama under Agency because a Transaction Broker’s loyalty is by law to the Seller not to you. They can answer your questions but cannot volunteer information or opinions.
Which means if they know something is wrong with a property, by law they can’t say anything unless you ask. I know that doesn’t seem right but their job is to facilitate the transaction not to represent you. Their loyalty is to a piece of paper not to you.
Because “Buyer Beware” is Alabama law, you need someone who’s loyalty is to you looking out for your interests. Tom Ball only represents Buyers in Agency.
DETERMINE YOUR NEEDS – BUYERS CONSULTATION
- Define your Lower Alabama Home Needs:Why Do You Want To Buy? Have you outgrown your current home? Would you like a larger yard? Would you rather live in a different area? Do you want to shorten your commute? Are you looking for Gulf, Mobile Bay or river front for sale? Or maybe you are in search of the peaceful setting of a golf community/. Defining your needs and goals will help you throughout the buying process, and it will assist with the process of finding the perfect home for you.
- Time to Buy:Once you have chosen the Lower Alabama home of your dreams, Tom Ball will assist you with the submission and negotiation of the offer.
PREPARATION FOR BUYING A HOME
- Build your ‘Green File’:A green file contains all your important financial documents. You will need it should you decide to obtain financing for your new home purchase. The typical green file should contain the following financial information:
- Bank accounts
- Credit Card Information
- Auto Loans
- Recent Pay Stubs
- Tax Returns for Two Years
- Review your Credit Rating:Should you require financing for your real estate purchase, your credit score will have an impact on the type of home you can buy, as well as the price. A premium interest rate may mean a lower interest rate on your mortgage. Review your credit rating with a credit reporting agency such as Equifax, Experian, or Trans Union.
- Understand the Numbers:It is important to gain an understanding as to how much you can afford, as well as what that number means to your monthly and annual bottom line.
CHOOSING A REALTOR
- Buying an Home For Sale: It is in your benefit to have a professional expert in your corner when embarking on such a large purchase. Tom Ball can seamlessly guide you through the process, and we can also provide you with access to Property Listings prior to the listing being released to the general market.
- Choosing a Real Estate Agent: Here are a few important factors to consider when choosing your real estate agent:
Look for a full-time agent who has experience completing transactions similar to yours.
- Is the agent knowledgeable in the area you are interested in?
- Ask how much time the agent will have to assist you?
- Ask about their credentials and education: A good agent will continually strive to improve and gain current knowledge of the latest real estate trends.
- Choose an agent who listens attentively to your needs and concerns.
- Choose an agent with whom you feel comfortable communicating with.
- Yep! Tom is not the pretty young agent in the photo. He’s an ugly old guy with years of wisdom and experience. It’s your choice!
SHOPPING FOR LOWER ALABAMA HOME FOR SALE
Once you have completed your preparations, it is now time to find the Lower Alabama home of your dreams.
1. Take a Drive: Get to know the Communities you are interested in. Drive around and get a feel for what it would be like to live in each of the areas. This step will assist you with gaining a better knowledge of the surrounding offerings such as: schools, parks, entertainment opportunities, local commerce, and hospitals.
2. Narrow your Search: Select a few homes that interest you and have your real estate agent request appointments to visit them. Discuss the potential re-sale value of the home you are considering with Tom Ball.
ESCROW, INSPECTIONS, & APPRAISAL
1. Title Company and Escrow Holder: Tom Ball will assist you with selecting a title company which acts as a neutral third party holding all instruments, including the funds and the deed. The title company will research the complete recorded history of the property, to insure that the title is free and clear of encumbrances by the date of closing and that all new encumbrances are properly added to the title. Some properties are subject to restrictions which limit various activities from building to parking restrictions. There may be recorded easements and encroachments, where others have limited rights to use your property.
2. How to Hold Title: You may wish to consult with an attorney or tax advisor on the best way to hold title. Different methods of holding title have different legal, estate and tax implications, especially when selling or upon death of the title holder.
3. Home Inspections: Once your offer is accepted by the seller, you will need to have professional inspectors evaluate your home’s major systems. Tom Ball can recommend other inspections, such as roof, chimney/fireplace, property boundary survey, well, septic, pool/spa, or mold.
4. Appraisal and Lending: Keep in close communication with your lender, who will let you know when additional documents are needed to approve your loan application and fund your loan. The lender will often send an appraiser out to the property and you may pay a fee for this service. Appraisers are specialists in determining the value of properties, based on a combination of square footage measurements, building costs, and recent sales of comparable properties. When you are within two weeks of closing, double check with your lender to be sure the loan will go through smoothly and on time
MOVING INTO YOUR HOME
The most challenging part is behind you, but there are a few more steps before you can move in to your new home.
1. Final Inspection: A few days before you take over the property, there will be one final walk through inspection to make sure everything is in order.
2. Utilities and Services: You will have to change the utilities and services of the house over to your name.
3. Closing Escrow: When your transaction is nearly completed, the title company will provide you with a “closing statement” that details all of the financial details of your home purchase. Tom Ball will go over this with you to ensure its accuracy. At the last step in the buying process, the title company will have you sign the final documents, including loan documents (“deeds of trust”). When everything is complete, the title company will record the transaction for you at the County Assessor’s Office, and you will become the official new owner of a beautiful Lower Alabama home.
Congratulations! You are now the proud owner
of amazing Lower Alabama Real Estate!