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Sept. 19, 2022

Early Fall Market Update

Click the link below ⬇️⬇️⬇️ to see stats for the southwest Montana area of choice. If your market isn't shown here, message me and I'll put together a report for you!

🔸 City of Bozeman

🔸 Greater Bozeman area

🔸 Greater Big Sky

🔸 Belgrade

🔸 Greater Manhattan

🔸 Three Forks

🔸 Livingston City Limits

🔸 Park County (w/ Paradise Valley)

🔸 Madison/Beaverhead/Jefferson Counties

Conditions for buyers are less competitive than they were last year at this time.  This has given buyers more options and more time to consider them. Showings are down about 25-30% from this time last year.
It's hard to wrap your head around what I'm about to share:  We are adjusting back closer to our pre-pandemic markets.  After a couple of years of insanity on both the buyer and seller sides, it feels counter intuitive to even think about getting the home you want without competing against a dozen other offers and waiving nearly all your contingences.
As a seller, sure, those that sold were rolling in it.  BUT, if they were moving to another market or even downsizing, they were paying the price on that end of the deal.  Only those that already owned another property were insulated from the crazy pricing across the country.
So here we are.  Mortgage rates hovering around 6%, prices adjusting downward but still high.  What to do with this information?
If you are a seller, know that it's important to have your next steps in place.  Will your home be listed with the understanding that you need to find your next home before closing (totally doable) or do you need a pre-sale inspection to remedy small items that could become negotiable items for a buyer?  Chances are, if you've been in your home two years or more, you'll come out ahead.  Just make sure your selling plan is solid.
Buyers: There are some homes showing up that have true value right now, either because they were overpriced and sitting on market, or have just come on and the seller is serious, either due to a relocation requirement or a lifestyle change.  Your negotiating power is back, baby!  Just be sure your agent actually knows what that means (hint: it's not sharing every tiny thing on the inspection report and then telling them their *lucky* you are only asking for x, y and z.  That's not negotiating, that's amateur work).  Let's get together and talk strategy, it's one of my favorite topics (after negotiating that is :)

To recap: In Bozeman we are up 7.7% from July of last year, Belgrade is 11.6% up, Three Forks is down 4.4% and Livingston is up 18.7%. 

Base your decisions on facts instead of fear. This will help you make the best choice for your individual goals. Reach out to me and we can see where your plans fit into the current market conditions!

 

Sept. 5, 2022

I Turned Down 2 Listings Last Month Here's Why...

Here are parts of the emails I sent out last month, turning down two listings:

Exhibit A: The easier one. The sellers were pushing to list considerably higher than my recommendations and comparative data. Kept meeting with me to ask me to “test the market:” I put a value on my time and energy, and knew I couldn’t do my best work under the circumstances.

#1 listing not taken.

Exhibit B: The harder one. A listing that was terminated due to poor performance and false promises from another agent (sellers words not mine) set unrealistic expecations that couldn’t be overcome. Now, I love me a good challenge. I can whip a rough and tumble property into slick shape in no time. But, even with a straight talkin’ meeting from the get-go, my numbers and approach to prepare for listing were waayy off kilter from the sellers. I (again) knew I couldn’t do my best work if there wasn’t trust in my process. Instead of flat out turning down the listing, I followed up with promised data (property attributes & challenges punchlist, net sheets AND my list price recommendation.

I did my job by being upfront and honest, and knew theywouldn’t choose me as a result. But I followed through with the information I promised. More complicated, but a necessary choice to turn away from this one.

#2 listing not taken.

This isn’t easy stuff. Turning down a listing could potentially *HURT* my business budget. I don’t take this lightly, and that’s exactly the point.

I'm proud of the fact that I have business values, and make it a priority to ensure I'm a good fit for working you.  If I don't do that, I'm doing you a disservice as well.  You deserve to work with an agent that's a great fit for you.  If it's not me, I'll match you with someone I think would be a good match.

 

This is one way of many that I help you prepare for a successful sale.

 

Here's more about me.

Here's info about my agent matching service no matter where you are!

 

 

Aug. 19, 2022

Late Summer Market Update

Click the link below ⬇️⬇️⬇️ to see stats for the southwest Montana area of choice. If your market isn't shown here, DM me and I'll put together a report for you!

🔸 City of Bozeman

🔸 Greater Bozeman area

🔸 Greater Big Sky

🔸 Belgrade

🔸 Greater Manhattan

🔸 Three Forks

🔸 Livingston City Limits

🔸 Park County (w/ Paradise Valley)

 

We’ve seen interest rates back off of the 6% rate mark that started climbing back in June, and is currently hovering around the 4.8% mark...pretty nice. This has caused some fatigued buyers to peek out from behind the curtain recently, because maybe, just maybe they can make something happen soon.

For sellers, the reality that those sky high multiple offer situations are a thing of the past is starting to hit home.  We are still pacing at equity growth of 8.6% over this time last year (you heard it here first in last week's report) which is well above historical levels. 

Experts are projecting mortgage rates will be more or less holding steady for the next four quarters/year. somewhere between 4.97-5.33 according to Fannie, Freedie, MBA and NAR.  This could be a result of inflation getting under control.

Where are prices going?  That's the number one question I'm getting right now.  Well, seven industry leaders are forecasting average 10.3% apprecation nationwide. Why is that?  Buyer demand has softened, but we still have more buyers looking than homes available.  Buyer demand outpaces homes available, which is a supply and demand issue.
This isn't to say there won't be some declines in certain markets across the country, but Mark Zandi Chief Economist from Moody's Analytics states he doesn't believe national housing prices will decline in a meaningul way.
To recap: In Bozeman we are up 8.5% from July of last year, Belgrade is 7% up, Three Forks 12% and Livingston is up 63.4%. The takeaway:  I wouldn't recommend waiting for a crash, especially if this has been your plan for the last 2-4 years, as most indicators show it probably will not happen.

Base your decisions on facts instead of fear. This will help you make the best choice for your individual goals. Reach out to me and we can see where your plans fit into the current market conditions!

 

July 26, 2022

5 Things to Consider About Short-Term Rentals

 

As we cruise through a warm and sunny (and so far little smoke) here in Montana, a lot of you are already starting to plan your late summer vacations and what happens in your life this fall. I love planning next years trips right now, so I get the best pick of places to stay, and finish off the year off with fun times to look forward to.

On the subject of staying in great places, I'm sure you’ve heard great things about being an AirBnB host from at least someone you know. You'll make lots of money, it will be completely booked all summer, your guests will end up paying for the place and then some... it’s totally win-win.

Isn’t it?  Let's dig in.

Short Term Rentals and You

Using your personal home, in whole or in part, as a short-term rental can certainly help pay the bills, but the truth is that short-term rentals also have issues you have to consider. It’s not as easy as just throwing up the listing on AirBnB and hoping for the best. You’ll need to do the necessary back end work before getting started, otherwise you may find yourself in some trouble and with expensive problems that eat all your profit.  And if there's no profit, what's the point?

Still, it can be a good solution for some homeowners. Before you list your spare room, make sure you’ve considered these five things that might complicate your situation:

Does your mortgage allow you to rent the property without penalty? Many loan programs that help people buy with a low downpayments have restrictions on renting the building. If the short-term rental you’re offering was purchased with you as an owner-occupant, there is likely language in your agreement that spells out what constitutes a breach by turning your house into an “investment property.” Generally, if you rent your property for more than 14 days in a year, you risk having to face the music.

Despite what many websites may say about a lack of punishment for using your home as a rental when it goes against your mortgage agreement, remember your mortgage likely has an acceleration clause that explains under what conditions your loan will essentially be revoked, with the entire balance due immediately. If you can’t cough up those hundreds of thousands of dollars, your bank will foreclose.

Find the paperwork, then scour it (and have a friend or three take a look, too) before you move any further. You should have gotten a copy at closing, check the packet the closing company sent you home with.  Hopefully you can move past this hurdle easily.

 

Do you have the right Insurance coverage? Even if your mortgage lender is ok with your using your place as a vacation rental, you’re still going to need the blessing of your insurance company. Although places like AirBnB claim to offer insurance, the truth is that it’s very hard to convince to pay out on claims.  AirBnb is notorious for favoring tenants over owners in situations like this. It's also not a great idea to bank on a third party policy that may not carry specific instances.  Message me and I can share an insurance option with you.

 

What do your neighbors think? The number of articles that have been written about neighbors pushed beyond the brink by AirBnB and other short-term rental guests is staggering. Even if your homeowners association and zoning allows for short-term rentals (check with your HOA and planning and zoning), if your neighbors are becoming perturbed because your guests are real jerks, you may have bigger problems on your hands.  Every day there's a new article about a city that has just imposed strict regulations on short-term rentals.  

Check your zoning, then possibly talk to your neighbors about your goals with the short-term rental, including the timeframe in which you intend to have guests and for how long they’re likely to stay. Starting a conversation with your neighbors about your vacation rental plans before things turn into a dumpster fire can make having an AirBnB-listed property less of a dramatic situation.  Review city documents and agendas to see where your location stands with upcoming restrictions.

It’s also important to check with your municipality about how long a guest can stay before they become a bonafide renter. In many areas, a “guest” automatically turns into a renter if they occupy the property for 30 consecutive days. You’re then assumed to have a month-to-month rental agreement, which means that you will have to actually evict them if they refuse to go quietly.

 

Can you refinance your property? This is a tricky question, especially with rates on the rise. Still, you may need to refinance at some point, even if it’s not today. The bad news is that many lenders won’t count the AirBnB income you’ve generated when calculating your debt to income ratios.

 

Luckily, there are a few banks that are capable of dealing with AirBnB income properties. Even if your lender is open to a refinance, you may be forced into a commercial loan because you rent your property out too often, effectively making it an investment property in the eyes of the bank. If you purchased using a loan eligible for a streamline refinance, you may not have to explain the AirBnB stuff at all.

 

Do you really want a rental? There are so many people out there that believe owning investment property is key to a better retirement, increased wealth and easy peasy income.  Not everyone is cut out to be a landlord, whether you have short or long term tenants.

 

Owning rentals, especially short-term rentals, is a lot of hard work. From stocking consumables like soap and toilet paper to keeping things in good repair, doing background checks on applicants and keeping your taxes straight, it’s not a low-stress investment. This is why so many property owners rely on property managers to handle the day-to-day stuff.

 

At the end of the day, even if your PM is doing everything right, you’ll have a decent work load of your own. If you’re not all in on owning a rental, don’t do it.

 

AirBnB Team, Assemble!

Getting all your AirBnB ducks in a row should also include finding home pros to help in case there’s an emergency. You'll also want to be sure you have a handyman, housecleaner and other people on tap when needed.  This can be challenging if you aren't well connected with these people, or at least willing to pay a pretty penny for their services.  

Let's talk a bit more about what's involved before you take the leap.  If you still decide to go for it, you'll be ready and armed for success!

July 19, 2022

Does Your House Have What Buyers Want?

 

The rise in remote work is changing what many Americans want in their homes. Many companies are choosing to delay reopening or go remote full-time, and today’s buyers are looking for homes with more space to support their work needs.

 

As a seller, if you no longer need the extra room you have in your home, rest assured there are buyers who do.

Remote Work Is Here To Stay!

Remote work remains a reality for many Americans. A recent poll from Garter, Inc. shows many organizations have not yet returned their offices:

“. . . 66% of organizations are delaying reopening their offices due to new COVID-19 variants.”

And it’s not just companies that are choosing to remain remote for the time being – workers are seeking more flexibility. According to research from PricewaterhouseCoopers, nearly one-fifth of employees want to be fully remote in the future. The study also finds that many people are leaving jobs to seek out remote work opportunities:

“Among employees looking for new jobs, almost one in ten say it’s because they moved away from the office while working remotely and don’t want to go back on-site.”

More Remote Work Means a Greater Need for Home Offices

That’s leading today’s buyers to prioritize finding homes with more space so they can comfortably work from home. The 2021 Home Design Trends Survey from the American Institute of Architects finds that 69% of surveyed individuals still want at least one office at home. However, it also shows that more people are looking for multiple spaces in their home for remote work and virtual meetings (see graph below):Does Your House Have What Buyers Want? | MyKCM

What Does This Mean for You?

If your house has extra space that you no longer need, buyers are interested, and now may be the perfect time to sell.

I can help you highlight many of the most sought-after features in your listing, including home offices and flex spaces. On the other hand, if you have extra room without a purpose, consider staging it as an area where remote work can happen. Together we'll discuss the best way to prepare your space for potential buyers and make recommendations for how to stage the room, where to draw the eye, and what other sellers are doing to make their houses stand out.

Contact me to talk about it!

June 18, 2022

Saying Goodbye To Your Family Home

 

It’s easy to tell yourself that your house is just a building made of walls and ceilings and light fixtures and flooring, but when it comes time to sell, you may start to feel the sting of grief.

After all, you don’t know if the new owners will take care of the rows and rows of brilliant iris that line the fence in the spring or if they’ll cut down the tree where robins have nested for years because they don’t realize it waits for the first burst of summer heat to spring back to life.

 

Will they paint your child's former bedroom and cover up the jamb that marks their height each year? Will they take out the built-in desk and bookcases you made that summer?

 

Maybe saying goodbye isn’t the easy process you thought it would be.  Selling your family home is a type of loss.

When you’re selling your family home, it’s not just a building that you’re saying goodbye to. It’s all the memories you made there, the familiariarity and, maybe most importantly, the security of that one place you could always fall back to if life started kicking you too hard. This goes for the house that you raised your kids in as well as the house where you were raised — both are genuine losses.

 

“You’re dismantling something that was once precious, and you have to go through grief and mourning when this happens.” psychologist Dr. Arthur Kovacs explained in an interview with the Chicago Times.

Of course, that’s only part of the story. Another element that makes it so hard to quit a family home is the link between memory and physical space. When your memories are tangled in with your home, it can be hard to let go.

“We have memories and associations that are connected to all of those things that make houses so heavily connected to ourselves,” Duke University’s department of psychology and neuroscience chair, Dr. Scott Huettel, goes on to explain the phenomenon to the New York Times.

Much of the time when you’re looking to sell a family home, it’s due to a big change in life. Maybe your kids have all grown and you’re planning to simplify your life or maybe your parents have died and you’re having to liquidate their estate. No matter the reason, it’s one of the hardest things you can do, even if you think you’re totally prepared.

How do you get ready for such a big shift in your life? It’s all about your mindset. Start to detach from the house by taking down and packing anything that’s personal. This includes photos, crafted decorations, paintings and so forth. As you take these things off the walls, the space starts to become more generic, less personal and it gets easier to consider selling the house.

If you’re still feeling the pain at this point, work on other parts of the house. Remember that crack in the wall from four years ago when the game controller flew from your daughter’s hand and hit the wall at full force? Patch that up. Your buyer probably won’t even notice it, but you will.

 

When the Offer Comes Through

The day will come that you get an offer. Resist the urge to flat out reject it, no matter the price. This is where the rubber meets the road — it’s now grossly apparent that you’re selling the house you poured so much of yourself into rather than just thinking about it.  Here's where your excellent agent comes to the rescue (hi there!)

Getting Ready to Hand Over the Keys

It's time for a party! Call it a “remembrance party” or something festive, but the whole point is to say goodbye in a big way so you can get the closure you need. Some people go room by room to have one last good walk down memory lane, others celebrate by doing something they hadn’t gotten around to doing, like hosting a luau.

Your goodbye will be best if you do it in a way that’s meaningful to you and your family. There aren’t really any shortcuts when it comes to grief, unfortunately. Don’t beat yourself up, it’s not “just a house.” That’s the building that sheltered and protected you year after year. That’s the stuff that attachment is made of.

Contact me to talk about how we market vacation properties in Montana with the least amount of inconvenience and stress for you.

 

June 15, 2022

Early Summer Market Update

The market is stabilizing...what does that mean? New properties on market are not "reaching" to test what buyers will pay, rather they are more grounded in market research.

There has been an uptick in the number of listings. The median price is higher overall in most local markets than this time last year (we continue to have above average equity growth).

The DOM (days on market) have decreased, properties are going under contract faster than this time last year on average.

With the except of Three Forks, which still offers the best value in our southwestern Montana region, closed pricing is ranging from 11-61% higher than spring of 2021.

Click the link below ⬇️⬇️⬇️ to see stats for the area of choice. If your market isn't shown here, DM me and I'll put together a report for you!


🔸 City of Bozeman
🔸 Greater Bozeman area
🔸 Greater Big Sky
🔸 Belgrade
🔸 Greater Manhattan
🔸 Three Forks
🔸 Livingston City Limits
🔸 Park County (w/ Paradise Valley)


May 7, 2022

What’s the Deal With Rents Going up So Fast?

Owning Is More Affordable than Renting in the Majority of the Country | MyKCM

Holy Moly! Owning Is More Affordable than Renting in the Majority of the Country

 

If you were thinking about buying a home this year, but already pressed pause on your plans due to rising home prices and increasing mortgage rates, there’s something you should consider. According to the latestreport from ATTOM Data, owning a home is more affordable than renting in the majority of the country. The 2022 Rental Affordability Report says:

“. . . Owning a median-priced home is more affordable than the average rent on a three-bedroom property in 666, or 58 percent, of the 1,154 U.S. counties analyzed for the report. That means major home ownership expenses consume a smaller portion of average local wages than renting.”

Other experts in the industry offer additional perspectives on renting today. In the latest Single-Family Rent Index from CoreLogic, single-family rent saw the fastest year-over-year growth in over 16 years when comparing data for November each year (see graph below):

 

Molly Boesel, Principal Economist at CoreLogic, stresses the importance of what the data shows:

Single-family rent growth hit its sixth consecutive record high. . . . Annual rent growth . . . was more than three times that of a year earlier. Rent growth should continue to be robust in the near term, especially as the labor market continues to improve.”

What Does This Mean for You?

While it’s true home prices and mortgage rates are rising, so are monthly rents. As a prospective buyer, rising rates and prices shouldn’t be enough to keep you on the sideline, though. As the chart above shows, rents are skyrocketing. The big difference is, when you rent, that rising cost benefits your landlord’s investment strategy, but it doesn’t deliver any sort of return for you.

In contrast, when you buy a home, your monthly mortgage payment serves as a form of forced savings. Over time, as you pay down your loan and as home values rise, you’re building equity (and by extension, your own net worth). Not to mention, you’ll lock in your mortgage payment for the duration of your loan (typically 15 to 30 years) and give yourself a stable and reliable monthly payment.

Here's my chicken scratch graph if you are more of a visual person:

When asking yourself if you should keep renting or if it’s time to buy, think about what Todd Teta, Chief Product Officer at ATTOM Data, says:

“. . . Home ownership still remains the more affordable option for average workers in a majority of the country because it still takes up a smaller portion of their pay.”  

If buying takes up a smaller portion of your pay and has benefits renting can’t provide, the question really becomes: is renting really worth it?

Bottom Line

If you’re weighing your options between renting and buying, it’s important to look at the full picture instead of just headlines screaming HIGHER RATES, HIGHER PRICES.  Let's talk so you can make an educated grounded decision that's best for you.  Even if you decide waiting is the way, I'm on board with that and can help strategize a plan for down the road.

April 9, 2022

The Perks of Putting 20% Down on a Home

 

The Perks of Putting 20% Down on a Home | MyKCM

If you’re thinking of buying a home, you’re probably wondering if you could put down less than 20% of the purchase price?  While there are lower down payment programs available that allow qualified buyers to put down as little as 3.5%, it’s important to understand what comes with a 20% down payment.

Here are four reasons why putting 20% down may be a great option if it works within your budget.

1. Your Interest Rate Will Likely Be Lower

A 20% down payment vs. a 3-5% down payment shows your lender you’re more financially stable and not a large credit risk. The more confident your lender is in your credit score and your ability to pay your loan, the lower the mortgage interest rate they’ll likely be willing to give you.

2. You’ll End Up Paying Less for Your Home

The larger your down payment, the smaller your loan amount will be for your mortgage. If you’re able to pay 20% of the cost of your new home at the start of the transaction, you’ll only pay interest on the remaining 80%. If you put down 5%, the additional 15% will be added to your loan and will accrue interest over time. This will end up costing you more over the lifetime of your home loan.

3. Your Offer Will Stand Out in a Competitive Market

In a market where many buyers are competing for the same home, sellers often like to see offers come in with 20% or larger down payments. The seller gains the same confidence as the lender in this scenario,  seeing a stronger buyer with financing that’s more likely to be approved. Therefore, the deal will be more likely to go through.

4. You Won’t Have To Pay Private Mortgage Insurance (PMI)

What is PMI? According to Freddie Mac:

“For homeowners who put less than 20% down, Private Mortgage Insurance or PMI is an added insurance policy for homeowners that protects the lender if you are unable to pay your mortgage.

It is not the same thing as homeowner's insurance. It's a monthly fee, rolled into your mortgage payment, that’s required if you make a down payment less than 20%. . . . Once you've built equity of 20% in your home, you can cancel your PMI and remove that expense from your monthly payment.”

As mentioned earlier, if you put down less than 20% when buying a home, your lender will see your loan as having more risk. PMI helps them recover their investment in you if you’re unable to pay your loan. This insurance isn’t required if you’re able to put down 20% or more.

Many times, home sellers looking to move up to a larger or more expensive home are able to take the equity they earn from the sale of their house to put 20% down on their next home. With the equity homeowners have today, it creates a great opportunity to put those savings toward a larger down payment on a new home.

Bottom Line

If you’re looking to buy a home, consider the benefits of 20% down versus a smaller down payment option. Let's chat to develop the best strategy for your situation.

April 1, 2022

4 Ways Homeowners Can Use Their Equity

Your equity is a powerful tool that can help you achieve your goals as a homeowner. And chances are, your equity grew substantially over the past year. According to the latest Equity Insights Report from CoreLogic, homeowners gained an average of $51,500 in equity over the past year.

If you’re looking for the best ways to use your growing equity, here are four options:

1. Use Your Equity To Buy a Home That Fits Your Needs

If you’re finding you no longer have the space you need, it might be time to move into a larger home. Or, it’s possible you have too much space and would like something smaller. No matter the situation, consider using your equity to power a move into a home that fits your changing lifestyle. Moving into a larger home can provide extra space for remote work or loved ones. Downsizing, on the other hand, may mean saving time and money by caring for a smaller home.

Equity has no value until it is utlilized.

2. Move to the Location of Your Dreams

If the size of your home isn’t a challenge but your current location is, it could be time to relocate to a new area. Maybe you enjoy vacationing in the mountains, at the beach, or another area, and you’re dreaming of living there year-round. Or perhaps the distance between you and your loved ones is greater than you’d like, and you want to close the gap. No matter what, your home equity can fuel your move to the location where you really want to live.

3. Start a New Business

If you’re not ready to move into a new home, you can use your equity to invest in a new business venture. As the U.S. Small Business Administration Office of Advocacy says:

“There is an estimate of 31.7 million small business owners in the United States, many of them started their business with the equity they had in their home.

While it’s not recommended that homeowners use their equity for unnecessary spending, leveraging your equity to start a business that you’re passionate about can potentially grow your nest egg further.

4. Fund an Education

Whether you have a loved one preparing to head off to college or you’re planning to go back to school yourself, the thought of paying for higher education can be daunting. In either situation, using a portion of your growing equity can help with those costs, so you can make an investment in someone’s future.

Bottom Line

Your equity can help you achieve your goals. If you’re unsure how much equity you have in your home, let’s connect today so you can start planning your next move.