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Understanding the Three Types of Home Values

Wednesday, February 26, 2025

by The Hat Team

Whether you are selling a home or buying one, you are going to want to know the value of the home so that you can determine the selling price or if the sale price is appropriate. But what you may not be aware of is that there are 3 different types of home values. It may be confusing to you when trying to determine what the true value of the home is.

Let us break it down for you so that you will understand the 3 types of home values and what they mean.

ASSESSED VALUE

The assessed value is the assigned dollar value of your home used by local tax assessors to determine property taxes. Tax assessors calculate assessed value based on various factors, which may include the appraised value and the fair market value, as well as any home improvements, whether you generate income from the property, and any tax exemptions. The assessor will give you a figure that is commonly a percentage of what they perceive the value to be. Because property taxes are based upon assessed value, ideally, this figure will be lower. It should be close to your actual market value, but frequently it is not.

APPRAISED VALUE

When you are refinancing or purchasing a house, an appraiser will be hired to determine the value of the house in question. They will use the same process that real estate professionals use to determine the fair market value. A licensed appraiser will consider the location, size and condition of the home along with any renovations that have been completed. They will walk through the home and compare it to others with similar amenities and improvements in the area that have sold. Most appraisals will include a construction or replacement cost that is used for insurance purposes.

FAIR MARKET VALUE

Fair market value is what a home is worth based on the current market climate. It encompasses how a home looks to prospective buyers compared to other homes in the area. It takes into consideration the sale prices of homes that are similar (same number of bedrooms, square footage etc.) A real estate agent will start by looking at “comps” to figure out what buyers have been willing to pay for properties comparable to yours. Other things that help determine fair market value are whether it is a seller’s or buyer’s market and how much inventory is available.

Because these different types of values can be subjective, it is vital to make sure you are looking at a comprehensive overview when trying to determine the value of the home you are selling or buying. An experienced Realtor like Sandra Nickel can assist you with this process by providing a comparative market analysis.

If you are in the market to buy or sell a home (or both), let me, Sandra Nickel, and my Hat Team of Professionals assist you with all your real estate needs! Call us today at 334-834-1500 and check out https://www.homesforsaleinmontgomeryalabama.com for more information.

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Don’t Let Home Closing Expenses Catch You Off Guard

Wednesday, February 19, 2025

by The Hat Team

When you make an offer on a home and it gets accepted, you have every reason to be excited. Becoming a homeowner is making an investment in your own future; likely the largest financial investment you will make. However, it is prudent to be aware that there are other costs involved in purchasing a home other than your down payment and monthly mortgage payments.

Closing costs are an expense you may not be aware of if you are a first-time homebuyer. These costs must be paid prior to closing on the home. They include property taxes, homeowner’s insurance, title search fees, and appraisal fees. In addition, the closing costs provide the funds that pay the people who have performed services throughout the loan process, like the appraiser and your real estate agent.

Your closing costs will be itemized for you and provided at your closing. But it is important that you look over them closely and take the time to ask any questions you may have before you sign any documents. If there is something you do not understand, your mortgage banker or Realtor can explain it to you.

The homebuyer can negotiate with the seller to determine who will cover the closing costs, but every loan has different guidelines about how much a seller can pay. Your mortgage banker can provide you with your options.

Whether you end up paying for all or just some of your closing costs, it is crucial for you to include the amount you will have to pay into your budget. You can estimate the cost by calculating 2% to 6% of your purchase price. For example, if your loan is $200,000, your closing costs will range anywhere from $4,000 to $12,000. You will also receive a document from your mortgage banker after you apply for your loan that will list the anticipated closing costs. They may change a little during the process, but it will give you a good idea of what to expect.

So, while saving for a down payment is an obvious necessity, you may want to also set aside some cash each month to go toward other expenses associated with buying a new home.

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Show Yourself Some Love This Valentine’s Day

Wednesday, February 12, 2025

by The Hat Team

It’s almost Valentine’s Day, and let’s face it, not everyone LOVES this holiday. If you’ve recently been through a break-up, or you just haven’t found “the one” yet, observing everyone around you as they celebrate “coupledom” can be, well, slightly depressing. But it doesn’t have to be that way. Sure, Valentine’s Day is a day designated to celebrate love, but it isn’t reserved just for couples. If you are a singleton, by choice or otherwise, you can celebrate YOU on Valentine’s Day…because loving yourself is just as important (and maybe a little more-so) than loving others.

Instead of boycotting Valentine’s Day or spending the day feeling blue and left out, here are some ideas for how you can show yourself some love on this special day:

Give Yourself a Special Treat

Today is the day to pamper yourself. Love flowers? Buy yourself a beautiful bouquet. Pick up those expensive chocolates you adore but wouldn’t normally buy. And if there is an exquisite piece of jewelry you’ve been eyeing - go get it! These may be things you dream of having someone else do for you, but you need to love yourself the way you want others to love you. YOU DESERVE IT!

Host a Party

If you have a bunch of single friends, you can throw an “Anti-Valentine’s Day Party”. One of the best parts of being single is that you can do whatever you want! Celebrate that! Do you enjoy fancy dinner parties? Then tell your guests to dress up and bring their appetites. Prefer something more casual? Have a grown-up sleepover in comfy pajamas with popcorn and candy on the menu.

Get Away From it All

Sometimes simply getting away to a different setting can give you just the boost you need when you are feeling a little down. Plan a road trip with another single friend or book a room on a singles cruise. Even better…go on a solo trip where you can do exactly what you want to do without having to worry about anyone else.

Plan a Date Night with Your Celebrity Crush

Spend your Valentine’s night with your favorite celebrity crush by binge watching every movie/show they are in. Get your favorite take-out food, put on your most comfy pajamas, light a fire in the fireplace and enjoy!

Reach Out to Others

Nothing makes you feel better than doing something nice for someone else. Take this opportunity to reach out and show love to someone who might also be lonely and sad. Arrange to have a “Secret Cupid” with your single friends so that everyone can enjoy receiving a special treat. Visit elderly relatives who might otherwise spend the day alone. Or offer to babysit for your “couple” friends who have kids so that they can enjoy an evening out.

Schedule a Relaxing Spa Treatment

If you’re not one to normally splurge on spa treatments, Valentine’s Day is the perfect time to indulge! Whether it’s a massage, a facial, or a mani/pedi, find time in the day to relax and enjoy!

Remember, every day is what you make of it…so make this Valentine’s Day what you want it to be!

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What Does it Mean When a Home Sale is “Pending”?

Wednesday, February 5, 2025

by The Hat Team

If you have been out house hunting, you may have noticed some for-sale signs with “sale pending” badges on them. What does it mean when a sale is pending?

Here is what you need to know about a pending home sale:

A home sale is pending after a seller has accepted an offer and the contract between the seller and the buyer has been signed.

When the home sale is pending, it’s no longer considered active on the multiple listing service (MLS). The timeframe in which the deal is pending varies depending upon where you live. In some places, it is during the due diligence period when a property is inspected, and its public record is checked to be sure there are not any legal issues. In other areas, the pending phase starts after the due diligence phase. Either way, pending home sales are considered a key indicator of market activity.

Due Diligence: In real estate, the period known as due diligence is an opportunity for you, the buyer-investor, to receive full disclosure of the facts and conditions of a potential asset prior to completing a transaction with the seller.

Once a sale is pending, the buyer needs to start preparing for the closing. The best way for the buyer to do this is to make sure the necessary professionals are on hand, including the mortgage lender, title insurance company, Realtor, and inspector. A real estate attorney is also good to have to help complete all legal documentation prior to closing. In most markets, the due diligence period starts once the contract is signed and lasts about 10 days. During this time, the formal application for the loan is submitted to the lender, and appraiser researches the house and area to determine the property’s market value. The attorney will comb through the home’s public documents to make sure there is nothing that could affect sale of the home. This period is also the right time for the buyer to closely examine the details of the house and the transaction to make sure there are no deal breakers. If both parties are ready to move forward and have agreed to waive the contingencies regarding inspection or appraisal, all that’s left to do is to wait until closing day.

The seller can relax a little more than the buyer while the sale is pending.

After the contract is signed, the seller pretty much just has to wait. The listing agent typically will schedule the inspection, appraisal or any other visits to the property, but the seller might need to be around to allow people in or to be present for the inspection. However, in some cases, the seller may decide not to be present for any of it.

It is important to note that once the contract has been signed, the seller cannot back out of the deal, while the buyer is legally allowed to cancel the contract. But, when negotiation takes place regarding issues found during the due diligence period, the seller can decide what to say yes to. For example, the seller can choose not to make repairs on things that surfaced during the inspection, or they can refuse to accept a lower price if the property appraises for lower than the sale price. The whole deal can fall apart if the negotiation does not go well, so it’s vital to have a Realtor who will help you through the process whether you are buying or selling.

The last step during the pending sale period is for the seller to move out of the home and leave it in good condition. It is a good idea to leave the home as clean as possible. The buyers will do a final walk-through a couple of days prior to closing. If the closing goes smoothly, the seller will finally be able to slap that sold sticker on the “For Sale” sign!

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1877 Hill Hedge Dr: Mid-Century Modern Ranch in Midtown!

Monday, February 3, 2025

by The Hat Team

1877 Hill Hedge Drive, Montgomery, AL 36106

MLS# 568414

3 Bedrooms | 2 Baths | 1 Half Baths | 1,858 Square Feet | Hill Hedge

Check out this mid-century modern ranch conveniently located in Midtown! This home has a nice floor plan with granite and stainless appliances in the kitchen, an open living room/ dining room with stone fireplace, primary bedroom suite, two nice sized bedrooms and the middle room (currently used for dog grooming) would make a great den or playroom. Hard wood floors throughout, built-in bookshelves and original tile in all three baths. The laundry room is located off the kitchen and the half bath is off the laundry room. Good sized fenced in back yard. Perfect for a first-time homebuyer or investor.

Marketed by Montgomery AL Realtor, Lauren Keen, Sandra Nickel Hat Team!

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Hill Hedge