Elevated levels of distressed residential properties, short sales and foreclosed commercial properties are preventing traditional sellers of both commercial and residential properties from finding space in the real estate market. This scenario can be seen in most states of the U.S., including Alabama. According to local realtors, now would be the worst time to sell a home or a commercial building.

According to them, homeowners who are planning to sell their residences are in for some tough competition from bargain-priced foreclosures in Clanton AL and in areas like Mobile and Birmingham. They stated that, unless homeowners are facing foreclosure or have been financially hammered by medical emergencies or a divorce, they should hold on to their properties and refrain from selling at the current market.

They claimed that majority of homebuyers and investors would prefer to buy foreclosures for sale in Alabama rather than an existing non-distressed home or a newly-built residence. They further revealed that, in Mobile, the only homeowners who can sell properties right now without incurring a loss are those who purchased their homes six or ten years earlier and have not undergone any refinancing following Hurricane Katrina. They further added that values of properties right now have gone down to a level that is nearly at par with values seen between 1995 and 2005.

Even these homeowners will find it a great challenge to find a buyer at this point in time, not while distressed houses and foreclosed commercial properties continue to dominate the market. In Mobile County, housing analysts reported that around 120 to 150 foreclosed properties are entering local listings each month, while between 75 and 100 get listed monthly in Baldwin County.

They also claimed that buyers are more likely to find foreclosures to be the dominant force in the housing market until 2012 since the whole country is currently sitting at a foreclosed property supply equivalent to nine months. The fact that majority of distressed properties are priced below $100,000 also hurt the chances of existing home sellers of finding willing buyers. Moreover, foreclosures in the state of Alabama are still rising, with more than 2,300 filings added to the state's supply in March alone.

With foreclosed commercial properties and distressed houses projected to rise further in the coming months, realtors asserted that selling a home right now will be a very unwise move, indeed. They recommend waiting until the market improves, particularly if the seller is not facing any significant financial problem or is not under foreclosure.

Real estate brokers in Alabama were able to post positive numbers in February of this year as housing sales improved slightly in the region when compared with one year ago. According to housing data for the whole state, the biggest gains were recorded in the northern part of the state and the regional market of Mobile.

Among the five major metro areas of the state, three posted a year-over-year decline in housing sales, with fewer people venturing to buy foreclosed homes in Birmingham during the month. Birmingham posted a sales decline of 8.5% in February of this year compared with the same 2010 month. Meanwhile, several other local markets recorded a rise in residential unit sales, with Muscle Shoals posting the biggest sales climb.

February 2011 saw more people coming to the region to buy foreclosed homes in Alabama and other types of residential properties. The Alabama Center for Real Estate revealed that a total of 2,390 residential units were purchased in the region in February, representing a rise of 16.5% compared with January 2011. When compared with February 2010, the total also represented an increase, albeit at a much lower rate. In Mobile, sales were up 16% compared with January 2011 and increased by 2% compared with February of last year.

Real estate brokers in the Decatur-Morgan County region also enjoyed a jump in sales transactions, with housing sales rising by almost 20% from January 2011, while Muscle Shoals recorded a month-over-month sales climb of 37%. Compared with February 2010, sales in Muscle Shoals were up by 28% in February of this year. Meanwhile, Baldwin County posted a sales increase of over 22% in February 2011 compared with the previous month, while year-over-year increase was pegged at 33.5%.

The rise in the number of individual buyers and investors who trekked to the region to buy foreclosed homes and non-foreclosed properties helped propel residential property prices upward. Statewide median prices increased by 6.3% compared with January of this year, while year-over-year price gain was at 2.2%. The median selling price of houses in February 2011 was $120,400. The average selling rate of $143,839 was also up by 8% compared with January, while a 3% gain was recorded from February 2010.

Real estate brokers will have more properties to unload in the coming spring home buying season as inventory jumped by 2.5% year-over-year. As of February, a total of 37,549 housing units are available for sale in Alabama, representing a decline of 4.3% compared with January 2011.

Alabama foreclosure listings offer you the cost effective way to own a residential or commercial property. These properties are foreclosed either by banks or by government due to inability of the homeowner to repay the home equity loans or property tax. They are sold through the process of auction. The basic aim of auction here is to recover the unpaid loan amount or tax with the cost of foreclosure. That is the reason why these properties are cheaper and considered as good real estate investments. In this article we will focus on the process of foreclosure in Alabama and the advantages of buying them.

Power of sale is an integral clause of loan against property approval in Alabama. This clause enables lender or the equal lien holder of the property to foreclose it in case of default and sell it through the process of auction. During the repayment tenure, the title of the property remains with the public trustee. The lender has to convince and give sufficient document to the trustee to prove that he has given time and chance to the borrower for repayment. If satisfied, the trustee issues foreclosure sale notice in all local dailies. All details related to the auction sale are given in the sale notice. The auction takes place in all working days of a week in the presence of Sheriff.

The foreclosure process in Alabama generally takes 60-90 days. The time period depends upon the redemption of the loan amount. However there are several stages where the process of auction can be interrupted. The borrower can repay the default amount and foreclosure cost before the date auction to stop it. In Alabama, post foreclosure redemption right is also legal. It enables the property owner to reclaim the property with in 12 months of auction by repaying the whole amount. These things need to be taken care of while you are making real estate investments in foreclosed properties.

However, there are several advantages of buying properties from Alabama foreclosure listings. They cost around $ 189,539 which is 15% lower compared to market price of fresh properties. With little investment on renovation you can add equity in it and sell it at a higher price. You can also use these properties for renting and second homes. All information related to these properties can be available from real estate websites.

There is no doubt that the returns available from Alabama foreclosures are quite high. This is the only reason why investors from across the nation choose the state for their participation in real estate market. However, the question, which remains in the mind of the first time investors, is that where can you get foreclosed property at the cheapest rate. According to most real estate experts, the most affordable properties are available in government foreclosed auctions.

Why Alabama government is desperate for foreclosure sale?

The reason behind the government auctions is that the government wants to get rid of most of these properties, which they have recovered from tax defaulters. Since the amount, which contributes to the overall taxes, is quite low, they are ready to dispose the property at the best available rate. Again, they also avoid paying the maintenance charges that come along with keeping these properties. The presence of too many foreclosures also affects the overall real estate market of the state, which is what the state officials do not wish for. So, they look forward to clear the market of these foreclosures at the best available rate.

How Government Auctions dispose properties faster?

Sales at government auctions are exposed to a larger volume of the public. This is what helps in disposing of the foreclosed properties faster. The government is able to recover money faster, when the properties are sold quickly. Their auctioneers have the infrastructure to deal with such sales, which banks and other private lenders do not have. This is the reason why they also turn to government auctions for selling off their properties.

Locate and inspect foreclosed homes

Even though the property is available at cheap prices, you should first locate the property before making an investment. Once you have located a property, which is suitable for you, do not just jump at bidding for it. Instead, inspect the condition of the house first and see what extent of repairs you will have to carry out on it and what it is going to cost you. Apart from this, you should find out the market value of the Alabama foreclosures for sale also, so that you know what the upper limit of your bid for them should be.

Tips on Extending Offers

• Banks usually do not entertain letters of intent or interest with regard to a Pell City foreclosures or any similar property. It is advisable to thus approach the bank with a formal letter of offer. This will be in favor of the interested buyer.




• All banks demand letters of pre-approval on loan purchases, including for those not dependent on external financing/loan. Such letters of pre-approval from the lenders must comprise the loan-type and details about pre-approving the buyer, like a credit check, income verification, source of down payment and employment status.




• In case of cash offers for foreclosure, banks need Verification of Funds, including statement of balance from the bank, and the account holder’s history with the bank.




• Be precise and straightforward in making your offer to the bank. Avoid leaving gray areas for that will only lead to delays in responses/procedures. In offering to pay for the buyers’ closing costs, check whether your quoted amount is payable under the buyer’s loan program. More often than not, the buyer will not be obligated to return the difference.




• Banks usually follow standard addendums. It is imperative that you read and correctly follow the terms before agreeing to them.




• It will be in your favor to inspect the property thoroughly before offering the bank a price. Often if the property does not adhere to a certain standard, chances are that a loan for it may be declined.




• It is possible that the bank is already aware of the condition of the property and has quoted a price accordingly. However, you may wish to prepare your own list and share it with the bank, who are in no obligation however to look at it. The bank usually out-sources such services, but it doesn’t hurt to do your own homework.




• A bank usually does not make any warranties on foreclosures or similar properties.




• Unlike a new home buyer, a bank representative has no emotional attachment with any of the numerous properties he may be handling at a time. Given that, it is possible that you will get a response for your offer on Pell City foreclosures for sale within 3-5 business days or sometimes it may take longer.