I hear buyers tell me all the time that they’re just not ready to buy a home. Then when I ask what’s really bugging them, they oftentimes tell me they don’t know if they can get pre-approved.
The problem is, there are a lot of myths surrounding mortgages and other aspects of the home buying process that people actually believe, and this prevents them from buying. Here’s the thing: If interest rates are at 4% today but they’re predicted to be at 5% in the near future, you’re much better off buying now because your mortgage payment will be way lower.
That being said, I’d like to dispel three common home buying myths so that you can be more confident in your own prospects of homeownership.
"There are many options available, and the first step is to reach out to us so we can help you."
Myth No. 1: “I have bad credit, so I can’t get a loan.”
Truth: Perhaps you do have bad credit, but did you know that lenders can pull your credit and give you tips on how to improve it? These can include paying down your credit card balance to below 50% or 25%, or writing to your credit bureau that you have too many inquiries. You can also use Lexington Law, which is a popular credit repair firm that many of my clients have used. Remember: The higher your credit score, the lower your mortgage rate.
Myth No. 2: “You need a large down payment to buy a home.”
Truth: There are many loan options out there that don’t require you to make a large down payment. For example, if you’re buying in a rural area, you can use a rural development loan that doesn’t require any down payment at all. You can also negotiate for the seller to pay your closing costs. If you’re concerned about saving for a down payment, give us a call and we’d be happy to put you in touch with lenders who can go over all of your options.
Myth No. 3: “You have to come in with closing costs.”
Truth: I already touched on this myth in the point above, but if you’re worried you won’t be able to pay your closing costs, an agent who knows how to properly negotiate a home purchase will find a way to take care of this issue. For example, as I said, you can always have the seller pay the closing costs for you. Your lender can also help you in this regard. There are many options available, and the first step is to reach out to us so we can help you.
If you have any questions about this topic, you’d like to know what’s happening in our market, or you’re thinking of selling a home, don’t hesitate to reach out to me. I’d love to help you.
A lot of interesting developments have taken place in our local real estate market lately, and today I’d like to break down a few important trends. If you’re thinking of buying or selling this year, being aware of what’s going on is key.
One of the most alarming trends I’ve observed is the increased number of “sale fails.” In other words, there have been a lot of transactions falling apart during escrow this year. This is perhaps due to the fact that lending standards aren’t quite as strict as they should be.
Price reductions have also become more common. This, in combination with the fact that homes are taking longer to sell in general, is definitely a sign of a shifting market.
"There’s a lot of frustration circulating among people in our Missoula market."
Therefore, even though interest rates are still very low, there’s a lot of frustration circulating among people in our Missoula market—especially buyers.
Because of this, many are choosing to relocate to Ravalli County, where taxes are lower and you can get more bang for your buck when buying a home.
So what should you do if you’re a seller? Well, I’d love to speak to you if you have questions about how to approach this market.
And if you’re a buyer, I’d get out into the market as soon as possible. If you need someone to help you navigate today’s conditions, my team and I would be happy to help.
If you have any other questions, would like more information, or want to know how we can help you buy or sell a home, feel free to give us a call or send us an email. We look forward to hearing from you soon.
I’ve been doing research on the real estate market, and the experts agree that conditions are shifting down. Prices are flattening and sales are slowing: We were down 6.4% in sales from December 2017 to December 2018 and we’re going from a normal market to an abnormal market.
An abnormal market, like the one we’ve seen for the last few years, has low inventory, low interest rates, very quick home sales, and rapidly rising prices. Because rates were so low, prices kept going up and things were going swell for sellers. A normal market, like the one we have now, has a bit more inventory. This means that homes are taking longer to sell. We’ll also have higher interest rates.
Usually, it takes three to six months for everyone to notice and adjust to a market shift. Until then, we’ll see home sellers trying to overprice their homes, which will lead them to come down in price or end up failing to sell.
When there are more homes on the market, there are more options for buyers. They will be more strict about what they’re looking at and won’t let certain things slide like they used to.
"Smart buyers and smart sellers are getting into the mix now."
However, there should be a sense of urgency if you're thinking of selling. Here in Montana, houses sell during every month of every year. If you have the choice of listing now when there are only 200 other homes on the market or in the spring when there are 600 homes on the market, the choice is clear.
As far as buyers are concerned, you can take advantage of the market, too. Once more homes come on the market, you’ll be able to get a little more aggressive on your offers because there will be so much more for you to choose from. A smart buyer is going to buy now as well before interest rates go up again as the year goes along. Be ready to get out there and start looking at homes today.
If there's anything that we can do to help you buy or sell a home in the next year, don’t hesitate to give us a call or send us an email. We’d be happy to put our team’s expertise to work for you and help you accomplish your real estate goals. I look forward to hearing from you soon.
I’m back with your bi-weekly Western Montana real estate market update for the month of October.
In my last few videos, I’ve discussed information and tips for the sellers in our market; today, it’s all about the buyers. How can a buyer take advantage of this market?
Let’s face it: Buyers have had a rough time finding the homes they want in this market. There’s been very little to choose from, and those that are available have often had some patina on them. They’ve been combatting multiple-offer scenarios right and left, often giving up in the heat of a bidding war.
Now, however, the market is beginning to balance itself, shifting toward a buyer’s market.
Our average days on market is increasing. At the moment, it takes about 140 days for a home to leave the market. We’ve seen hundreds of price reductions coming through the MLS.
Back in May and June in Missoula, there were about 200 homes for sale. Now, there are about 400 homes for sale—our inventory has doubled.
A year ago, our interest rates were around 3%, where they’re now up over 5% for the first time in seven or eight years.
"There’s so much more to choose from now than there was before, so don’t wait for prices to drop."
What does all this mean for a buyer?
Well, sellers that have had their home on the market for a long period of time are starting to reduce their prices, and are also anxious to sell their homes before the wintertime. They’re beginning to realize they can no longer get these pie-in-the-sky prices. That means you can get great deals on homes available in the market.
Interest rates are set to up again, so you should think about getting in the market before that happens. If the rates go up just one percentage point on a $300,000 loan, that’s an increase of about $300 on your monthly payment. Keep that in mind if you were thinking of waiting until spring to enter the market.
There’s so much more to choose from now than there was before, so don’t wait for prices to drop. If your credit isn’t where you’d like it to be, we can put you in contact with lenders who can help you formulate a plan to get approved for a home loan as soon as possible.
For sellers, I have only one sentence: Prices are dropping, so you can either sell now or wait for them to drop even lower before you sell. The choice should be clear.
If you have any questions or are looking to buy or sell a home, reach out to us. We’re the best team to work within the area.
As prices start to cool off and the market shifts to a buyers market, which is where it is headed, make sure you don't get left out in the cold and miss the mark. Sellers often ask me, “How do I know if my home is overpriced?”
Actually, there is a simple way to test this. Looking at the number of showings you’re having each week is a good way to gauge whether your listing is reasonably priced. With this in mind, the ideal number of weekly showings your home should see will depend on your price point.
"Reduced listings tend to see a higher level of exposure."
Homes at and below the $450,000 mark, for example, should have between three to four showings each week.
However, the amount of time a home spends on the market will also indicate how fairly it’s been priced. If a home sits on the market for more than three weeks, the number of showings it sees will likely taper off.
If you’ve had between 10 to 15 showings but no offers, you should reduce your price by 3% to 5%. If you’ve had one or two showings each week, but haven’t seen any offers, you may need to reduce your price by about 10%. And, finally, if you’re seeing a complete lack of showings, your home is probably overpriced by between 10% to 20%.
No one likes to lower their price, but not doing so when necessary could be a major mistake. When buyers see a home has sat on the market for a while, they will tend to wonder if something is wrong with it. Reduced listings, on the other hand, tend to see a higher level of exposure.
If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.
I am grateful for not only my team, but also all of you. I was just looking at the numbers and we have 86 sold and pending homes. This wouldn't be possible without the hard work of my administrative, sales, and marketing team as well as all of the referrals I get from past and current clients like you.
To show our appreciation for our clients we had an amazing customer appreciation party at the Highlander Brewing Company in July. Over 100 past clients, friends, families, and vendors came and had fun. I just want to say thank you for joining us and for sending us business so far this year.
As for the market, it was booming until May 1. Then we had low inventory and were getting multiple offers. Now, though, we have seen a severe slowdown in the number of showings and offers received marketwide.
So, what's happening? As I told you back in June, the inventory is increasing. In Missoula, even though we are still below historic averages, we have an average days on market of 132 days. Currently, there are 390 properties listed for sale on the market. This is over 100 more than what we saw from February to May. When the days on market start to increase, sellers start to get nervous and lower their price. A snowball effect then occurs for neighborhood comps, bringing them down as well.
Meanwhile, in Hamilton, there is an average of 280 days on market, which puts us in a buyer’s market. There are currently 135 homes for sale. Here, we are seeing many high-end homes come onto the market which I think is driving the market upward.
"If interest rates increase another point, this could mean buyers could pay an additional $350 to $400 per month for their mortgage versus buying now."
In Florence, there are 65 properties currently listed with an average days on market of 146. Stevensville has 46 homes for sale with an average of 144 days on market.
What you need to remember about these creeping up numbers is that anything over 180 days on market is moving into a buyer's market. Sellers, I can't stress enough that we are seeing a leveling in pricing and an increase in the number of days on market. If you think waiting until next spring is a good idea, you should know that with increasing interest rates and decreasing comps, you could end up with tens of thousands of dollars less on your sale. So, why not just sell now?
Buyers, you should get out and buy now because the increased inventory gives you more to choose from and you can take advantage of price reductions from sellers sitting on the market. Also, if interest rates increase by another point, this could cost you an additional $350 to $400 per month for your mortgage.
If you are a buyer and want to see a property, all you have to do is contact us and someone on my team can go with you any time. If you are thinking about selling your home, let us know if you want us to do an evaluation of your home. We look forward to speaking with you.
If you’re considering selling your home on your own, aka listing it as For Sale By Owner (FSBO), I want to provide you with some tips and tricks to help you succeed, as well as highlight some potential pitfalls to avoid in the process.
1. No lowball investor offers. Around 90% of the calls FSBO sellers are likely to receive about their listing will be from people who aren’t qualified to buy the home. In your ad, be sure to put the stipulation of “no lowball investor offers.”
2. No contract for deed. Additionally, specify “no contract for deed” as well. The rate of default on contracts for deeds is very high, and many people are looking for something to rent-to-own. If that’s something you’d like to do, then that’s up to you. However a lot of times, it can be a recipe for disaster.
3. Your buyers must be pre-approved. There are approximately 2,700 homes on our MLS as we speak, so consider this as you sell: How are buyers going to find your home, and why would they buy yours over a competing seller’s? As a FSBO seller, what kind of exposure do you expect to get for your listing? When we as agents put a home on the market, we can put your listing on around 1,000 websites.
4. What will your costs be to sell on your own? In your ad, if you do not offer to cooperate with a real estate agent, then you likely won’t get any real estate agent’s clients, because those buyers are under contract with their agents, and they certainly won’t allow them to buy your home if you’re not offering some sort of compensation. Hiring a listing agent will get you more than selling on your own.
"How are buyers going to find your home, and why would they buy yours over a competing seller’s?"
5. Consider your experience with negotiating. Capable agents negotiate several transaction per year. If you’re not trained to negotiate or do home inspections, you might be headed for a bad transaction.
6. How are you ensuring that you’ve properly valued your home? Again, without experience or expertise in the field, you could be leaving money on the table or overpricing your home, both of which will lead you to problems later on.
7. Can you handle the activity? Does your lifestyle allow for answering multiple calls a day from inquiring buyers? Many will simply move on from your home if you don’t contact them in short order. We’re master salespeople, and we can handle phone calls, appointments, liability, appraisals, inspections, negotiations, and all the rest. We have many staff members that divide up the work to help make a transaction smooth.
If you have any questions about selling your home on your own or would like to learn the merits of hiring an agent, please don’t hesitate to reach out to me. We can help make sure that you sell your home for top dollar.
What is the latest news for homebuyers in Western Montana?
The latest statistics from our market just came out a week ago, and one important figure I want to mention is the average days on market. The average days on market has risen to 120. This means sellers are sitting on the market longer, and I’ve seen many price reductions happen throughout the MLS during this time. This has also caused inventory to increase.
Another thing to keep in mind is interest rates are also rising. The Federal Reserve just raised them, and they are scheduled to raise them twice more before the year is over. Although mortgage rates and interest rates do not necessarily run congruent to each other, the last time interest rates went up, so did mortgage rates.
"Get out there and buy a home before rates go up again."
Last year, it was predicted that interest rates would rise from 4.01% to 4.8%, and that is exactly what has happened. That means if you would have bought a $250,000 home last year at 4.01%, your mortgage payment would’ve been $1,194 per month. If you buy that same $250,000 home this year at a rate of 4.8%, your mortgage payment will be $1,381. That is a $186 difference each month.
If you wait until next year to buy after interest rates have gone up even further, you will likely have to pay an even higher mortgage payment. Do not wait around for rates to go down because where they are at now is the lowest they will be for a while.
The increase in inventory, the rash of price reductions, and the specter of rising interest rates make now the time to buy.
We would love to help you find the home of your dreams and structure the best deal possible for you and your family. If you are ready to get off the fence, give me a call or send me an email. If you have any other questions or real estate needs, please feel free to reach out to me as well. I look forward to hearing from you.
I want to go over what it is going on this spring. People are fighting for homes and paying way more than asking price in some cases.
Right now, there are just over 300 homes for sale in Missoula.
We are seeing the average days on market settle right around 100 days. If you are a seller and your house is on the market for longer than 90 days, the price may be too high. Buyers, if you see a house on the market for more than 90 days, have your Realtor pull comps to make sure that you are getting a good deal.
In Lolo, there are only 14 homes on the market. If you are interested in selling in Lolo and you don’t put your home on the market, take your temperature because this is the time to sell. We will get multiple offers and you will make more money.
"Sellers, if your home is on the market for over 90 days, you should consider a price reduction."
The average days on the market in Lolo has increased from its February low of 65 days because of the increased inventory. The homes that we do see on the market in Lolo are priced much higher, although not overpriced, which will increase the average days on market.
In Florence, there are 43 current listings. We will see more homes listed in June, which means that buyers will have more options and could potentially get a better deal. If you're a buyer, you'll still have to probably settle for a little less than what you want because inventory is overall lower than it's been in previous years, but you can still take advantage of some of that appreciation.
Right now, Florence is sitting at 140 days on the market because there are a lot of higher price range listings keeping that number up. Homes that are $350,000 or less are selling quickly.
Frenchtown has only 11 homes listed, with the days on market sitting at 90. In January that number was nearly 220. If you are in Frenchtown and want to sell, do not wait until June when there will be more competition.
There are 71 listings in Stevensville. The days on the market for them is all the way up to nearly 240.
We have very limited inventory and still have 90 or more days on the market. Sellers, unless your home is on the market for 90 to 120 days, there is no need to worry. After that time, you should consider a price reduction.
If you have any additional questions about the current market or are interested in listing or buying a home, please contact me by phone or email. I look forward to speaking with you soon.
Today I wanted to reach out and update you on what we’ve been noticing in the Missoula and Ravalli County markets.
For the first time since I can remember, we’ve had four appraisals in 60 days come in below our sales price. That’s a lot like ‘mental appreciation’: What a buyer is willing to pay is outpacing the actual rise in house values.
As a buyer, you really need to look out for that to make sure you’re not overpaying. As a seller, you might hear that the market is so good, but keep it in the back of your mind that the house might not appraise.
For instance, we received five or six offers on one of our properties, and two or three of those offers were over the asking price. We didn’t actually end up going with the highest one because we didn’t think it would appraise. The one we did accept was the best offer that we thought it would appraise for. In fact, it didn’t—it came in about $13,000 to $14,000 below that. For that situation, we had to have another round of negotiations and it is about to successfully close.
"If you keep an eye out on the points I’ve addressed today, you should have a less stressful transaction."
This is the hottest seller’s market we’ve ever experienced. However, if your home is not selling, pay attention to the feedback. It could be that the home is outdated. If a buyer walks into a home priced at $385,000 but the home hasn’t been updated since it was built 20 years ago, would it be worth it to put that much money into the house? Suppose it costs you $50,000 to remodel the kitchen and bathrooms and maybe put down some new concrete: Would the house then be worth $430,000?
If the answer is no, I’d steer clear of that home, as a buyer. That home should probably have been priced around $340,000 or $350,000. That means, as a seller, your home might be priced too high in relationship to the relative age of the home. Watch out for outdated features such as hollow-core doors, brass doorknobs, green carpets, and so on.
Additionally, pay attention to the days on market. The average time a home spends on the market in the Missoula area is about 100 days, and the farther we go down the Bitterroot, that starts to increase.
If you keep an eye out on the points I’ve addressed today, you should have a less stressful transaction.
For any questions or if you’re in need of assistance with buying or selling a home in this competitive market, please reach out to me. We’re always here to help and coach you.