Uncategorized

Why you ask…they know the most about the property, right? Probably so but that does not mean they will tell you and more importantly, they represent the SELLER. The listing agent will rarely recommend you offer a low price or negotiate hard as they will have to explain that to the SELLER. Buyer’s agents are not trying to get the best deal for the SELLER or trying to walk the fine line between BUYER and SELLER where both MIGHT be happy.

Quick story….I am part of a group that gets together once a week to play ping pong and socialize. We have been doing this for years and rarely discuss business but we do know what each other does for a living. The other night one of the guys said he just purchased 2 lots next door to him and, of course, I ask who he bought it from. He responded that he called the name on the sign and worked with that agent to buy the lots. I asked him why he did not call me and he responded “could you have helped me?” At that point, I realized that I am not doing a very good job of explaining the value of using a Buyer’s Agent when BUYING property.

With very few exceptions, the real estate commissions paid (e.g., let’s use 6% in our example) in a real estate transaction is paid by the SELLER. The commission was negotiated up front between the SELLER and the listing agent. The commission is split between the realtor representing the SELLER and the realtor representing the buyer, or 3% each. The BUYER does not pay any commissions. When an agent represents both the SELLER and the BUYER then the agent receives all (or 6%) of the commissions.

First, what is a Buyer’s Agent? In every real estate purchase there is a listing agent and a buyer’s agent. The listing agent is the name on the sign and represents the SELLER of the property. A listing agent can represent you but they have to disclose to you that the represent the seller (typically done on a document you sign that you don’t ask about). In this case, they now have a fiduciary responsibility to both parties which can create a conflict of interest. The biggest areas for this potential are in negotiating the price and inspection results. I really cannot see how a listing agent can represent both BUYER and SELLER in these two parts of the transaction.

My recommendation to BUYERS….do your homework online and when ready to actually start looking for a property, call a Buyers’ Agent who will help you with questions (answering without worrying about offending the seller), negotiating the deal (again, not worried about offending the seller, and inspections (helping you understand your options and making recommendations).

Feel free to contact me at Jeff@SmithLakeRentals.com or 205.492.3211 to answer any questions about this. Thanks for reading.

I get this question a lot!! The price range that has the largest prospective buyers is the below the $500k range. The lower you go the more people interested. Once we have looked at the properties in this range everyone always asks the question of why are builders/developers not building in the price range that has so many buyers. Below I try to explain…

When you start looking at houses newly built on the lake you will find that the price is typically over and in most cases well over $600,000. Why is this? Why are developers not building houses in the price range that is so hot (less than $500,000)? Lets break it down. A lot in one of the areas that developers are building is going to run $150,000-200,000. Building costs are $120-150 per sq ft. Most houses are 3000+ sq ft. At 3000sf and using the lowest price per sq ft the house will cost $360,000, add the lot at $150,000, add a dock (at least $30k and can go over $100k), and you are at $540,000. Now we need to add in a developers profit (approx. 20% or $108,000) and real estate commissions (6%) and we are at $686,880. Keep in mind that we used the lowest price per sq ft at $120/sf which means limited to no stone, limited hardscaping, builder grade finishings, sheetrock vs wood interior, limited outdoor spaces, etc. Price per square foot can go well over even the $150sf if you start upgrading….which most desire.

As you can see from the above, a house has to be $650,000+ to make it profitable for a developer to build a house on the lake. In addition, the houses in this range are selling so why would they not build houses that provide the largest possible profit margin!!

Your options for acquiring a lake house for less than the above are: 1) build your own (hopefully) saving the profit of the developer, 2) buy an existing home and renovate, or 3) buy a lake house as is and enjoy it as is until you can afford to renovate it.

I built my last home using a different philosophy. We decided to build a house that only has the space we need and will use. The house is 1800 sf. We did use high quality building techniques and finishes. The difference here is that we were building for ourselves, not for others and we did not have to include a profit margin. This approach is not practical for many and building a house can test an individual and many relationships. That being said, building your own home IS a way to save a lot of money.

Feel free to call me about any of this and I will be glad to share what knowledge I have gained through my experiences helping buyers, managing rentals, owning multiple lake homes and building on the lake.

Most people are surprised when they first visit Smith Lake and are told the water levels can fluctuate 14 feet.  Those of us that have been here a while are used to it but it is a “thing” that has to be taken into account when finding your dream home or lot.

Let’s get a few definitions: “Summer Pool” is considered 510 mean sea level (msl).  Google mean sea level if you do not know what that means.  “Winter Pool” is 496 msl.   “Yearround” water means that you still have water under your entire dock when the water is at Winter Pool, even if only an inch.  If ANY of your dock is touching the ground at Winter Pool then you have “Seasonal” water.

Rarely does Smith go above or below these two levels but there are exceptions (i.e., drought, flood).  Alabama Power starts slowly dropping the water level in July and it is as low as it will go by December.  The rains historically start raising the level in December and Smith Lake reaches summer pool around April 1.

So why does this matter?  Alabama Power regulations rules for docks limit the length, size and location (in cases of being in slough).  A dock can extent 92′ into the lake.  This can be a combination of dock and ramp.  Typical is a 60′ ramp and 32′ long dock.  This length allows a 4′ walkway and 28′ slip.  You can turn the dock sideways to get a little more length on your ramp or if you are in a slough that does not allow the full 92′.

This time of year it is very easy to determine if you will have Yearround water.   You can pull a tape from where the pier (what your ramp connects to and is the structure on the land) can be placed and determine if or how you can ensure Yearround water.

One other way to ensure Yearround water is to install a “chase the water system”.  Basically, a ramp is installed allowing the dock ramp to roll out to keep the dock in the water.   This system requires some method of letting out and pulling in the ramp/dock as well as allowing the electrical lines to move in and out with the dock.

How does this affect water values?  Smith is different from Martin in that many areas of Martin are seasonal and this does not affect values nearly as much as it does at Smith.   Seasonal lots can drop the property/house values easily by 25% and in many cases more than that.

Other considerations around Seasonal lots.   Another consideration is how your dock may sit down.  I own a house that touches the ground at around 498 msl.  The land has a gentle slope where it sits down and so it is much less a concern…this is what I call sitting down gracefully.  If your lot is a rock shoreline then it may sit down on jagged rocks or worse.

Slough Lots:   Lots in a slough less that 300′ wide at the point of your dock has another consideration.  Alabama Power allows dock to take up a maximum of 1/3 of the width of the slough.   This can make a lot that would be Yearround on the main channel a seasonal lot since the dock cannot go as far out.

Bottom Line:   My progression of value of lots in order is: 1) deep water lot (10’+ deep when at winter pool), 2) Yearround water (1″+ at winter pool), 3) seasonal with a chase the water system, 4) seasonal but allows you to get your boat in and out of the slip, 5) seasonal sitting down gracefully,  6) all others.

Feel free to contact me with any questions and please call me to help you find the right lot or house on Smith Lake.

Jeff

 

 

I know you are thinking….it is cold, rainy and it is the holidays, I am not looking for lake property now.    So why is it the best time to look for property?

During the summer when most are at the lake the level is at full pool (510 msl).  All looks as good as it can with all docks floating and all ramps to the docks flat or close to it.   You or your realtor checks the depth of the water to determine if it meets your needs.  There is a little bit of a guess when it is close to the depth that puts it on the edge of yearround v seasonal.  It is almost impossible to tell exactly as the dock gets closer to the land as the water drops.

Quick note on lake levels:  Full/summer pool is 510 mean sea level (msl), winter pool is 496 msl.  Alabama Power starts dropping the lake in August and it is typically as low as it will go by Thanksgiving.   They rarely go below 500 msl but last year was a drought (went to 496) and this year I hear they are dropping because of boat ramp maintenance.  See my other post on water levels.

We are currently (Dec 6, 2017) right around 496 msl.  This level tests most all docks and walkways on the lake.  Any dock not in “yearround” water is going to touch the ground and you get to see how gracefully it sits down.   There is no guessing when the water is at 496msl, it is at the bottom.  FYI, all bets are off if it goes below 496 msl.  Alabama Power is not supposed to take it below 496 unless there is some sort of drought.

Other bonuses especially if looking for a lot…no chiggers, cool weather, no boat traffic, and the brush is down.   I was showing property from the boat twice in the last two weeks (end of Nov, first of Dec) and with the right clothes on it is the way to go.

Give me a call and lets find your Smith Lake property.

Jeff

 

Great question!!   I know, you would think this is an easy answer but it is anything but easy!  What makes it difficult?  We have 4 MLS systems (Walker County, Cullman County, Birmingham, North Alabama) and a couple of consolidators (Zillow, Realtor) and advertising sites (Lakehouse.com) that serve Smith Lake.  This makes it challenging for those of us working to make sure clients see all available properties.

Quick summary of how I attack the problem:  I go through a progression starting with Walker County MLS (has about 80% of properties for sale on Smith Lake) and then supplement that search with searches of the other sites to ensure I do not miss anything….and I still miss a few.   If you decide to search on your on…go to “Search Properties” on my website which will give you the Walker County MLS and then hit Lakehouse.com and Zillow.com.  Put in the same price range on each of these and filter through the results.

Below we will discuss the different categories of sites:  consolidators like Realtor or Zillow, advertising sites like Lakehouse.com, and individual realtor sites.

Individual Realtor Sites:  Most all of us have our own personal websites where we give you the opportunity to search for properties on the lake.  If you go to a realtors site and they do not provide you the abilty to search all properties on the lake then they probably are not the realtor for you…as they are probably not using all of the technology available to ensure you see all available properties.    Realtors can only give you access to properties on their MLS.  Some realtors are members of multiple MLS systems so they offer you multiple links to different MLS systems.  So far, none of the realtors combine all MLSs into one search, Lakehomes comes close (see below).

Consolidators: Zillow and Realtor are probably the two most popular.   They appear high on the search  results and do a great job of consolidating.  They receive listings from most every MLS system as well as allow FSBOs to pay to advertise their properties.  The only issue I have is that these sites sometimes display properties that are no longer for sale which can be frustrating.

Lakehouse.com:  This site has become the one place that most all listings are put by the listing agents.  FSBOs will also show up here as well.   This site is populated solely by realtors or FSBOs.   In other words, it is not automatically populated from other sites (like Realtor or Zillow).  What this means is that the ad owner must also maintain the status which is about the last thing the realtor does on status change.  This is where the frustration comes in as a large number of the listings are stale (e.g., expired, sold, cancelled, etc).    This is still one of the best sources on the lake, you just have to check that it is still active.

Lakehomes.com:  This site is different in that they are a brokerage and are selling real estate.  They have their own realtors working the lakes where they have homes listed.  For instance, Justin Dyar is associated with Lakehomes.com.  Lakehomes.com only has the properties from the MLS’ they are members of and no FSBOs.

As you can see this can be confusing…of course, I recommend using a realtor and letting them do the initial searches.  They will not find them all but they will find the majority.  Ask the realtor to have email updates sent to you of new and changed properties and supplement this by signing up for email updates from Lakehouse.com.

Happy hunting and call me with any questions.