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Picture this:  You are sitting in a hallway, waiting for a stranger in a suit to size you up and decide if you’re worthy as a potential homeowner.  Your palms sweat and your breath gets a little quicker. You’re one step closer to owning your own home, but this one is a doozy --  you are waiting for your appointment for your mortgage pre-approval. 

Stop!  It doesn't have to be scary.  Let’s quickly talk about the  mortgage pre-approval process, step-by-step.

Step One: Mortgage Pre-Qualification Versus Pre-Approval

You may already have a pre-qualification letter saying that you can probably buy a house in a particular price range, so why isn’t this enough? (Don't have that, we definitely need to talk) A lot of homebuyers find this next part of the process confusing, and frankly, it can be. We've got your back on this one.

Your pre-qualification was probably done over the phone, through an internet application or during a meeting with a lender. Many people start with where they bank.  This may or may not be the right place to end up. 

They asked you a bunch of questions about your income, your job and maybe even pulled a “soft” credit report to get some idea about your debts.

Based on this information, they gave you the details on the kinds of programs you’re eligible for and how much you can expect in buying power. You probably got a letter that you could show your Realtor to help guide the buying process.

The difference between the pre-qualification and the pre-approval is simple: a pre-qualification is based largely on your word. If you give the lender incorrect information, they’ll give you a pre-qualification letter that’s not right.

A pre-approval, on the other hand, takes a harder look at your background, work history and requires a full credit report and FICO score to ensure that you can, in fact, pay back a note.

Step Two: Documentation

Your next meetup with the nice lender is going to be to deliver (or email) documents, provide consent to pull a full credit report and, if you’ve already found one, give them the information on the home you’ve put under contract.  Make sure you have your signed agreement with your chosen agent as part of this process also.  It's a team approach that will get you through this.

Documentation you’ll be asked to bring will include pay stubs, bank statements and tax returns, along with other information that may be needed to verify your income source or sources. Self-employed people, for example, are sometimes required to prepare profit and loss statements (or just pony up more tax returns). If you have assets like a 401(k) or even a CD, you’ll want to bring the details on these, too.

Step Three: The Loan Estimate Form

You’re going to get a copy of something called the Loan Estimate Form (names may vary by lender), probably at the same meeting where your lender pulls that full credit report and takes all your papers away. This form explains exactly how much they expect you’ll need to bring to closing, along with itemized estimated fees to plan for at closing. If you’re shopping your loan, collect these and compare them side by side before you make your final choice.

If you haven't found a home to purchase yet, this will be general.  Ask your lender to contact your agent (hoping it's us here) and share details about how much you qualify for and other details that will help us to write the contract in the most competitive way.

But don’t spend too much time crunching the numbers. Just like your contract will say, “Time is of the Essence.”

Step Four: Acceptance

Once you’ve had a few minutes to review the paperwork and you’ve made your final pass through the numbers, all that’s left is to call the lender you’ve chosen and let them know you need that pre-approval letter sent over to your Realtor (hello again!) We will note this is the contract and attach it to your offer to show the seller of the property you want to buy that you have done your homework and are indeed a qualified buyer.

Understand that a pre-approval is not a guarantee that you’re going to get the money you need to close. Several things can go wrong along the way through underwriting, including, but not limited to:

– Unverifiable income (this is often due to issues with overtime)

– A change to your credit score.

– An increase in your debt to income ratio (don't buy anything!)

– An undocumented change in employment

– Assets that are unverifiable

etc...

The best plan is be totally honest with your lender when you get your pre-approval so that you don’t get a last minute call telling you that your loan has been denied (this actually happens, so pay everything on time and don’t take out new credit lines or add to old ones until you’ve got the keys in your hand). It can be daunting to share personal information with someone new, especially if your facts are, um...less than stellar.  Remember, there is no judgement here, by either us or your lender.  We are all working together towards a common goal.

When is the Best Time to Make an Offer?

Ideally, you should have a pre-approval letter in hand before you so much as set foot into the first house you’re considering for purchase. In fact, we require our buyers to complete that step first.  After all, the seller isn’t going to think you’re all that serious without one, nor will they be keen to want to negotiate under these circumstances.  If you have an agent showing you houses without one, they aren't doing their best job for you.

Help your lender help you get the best deal on the house of your dreams, save everybody a lot of headaches and get that pre-approval first. Knowing how much your closing costs are going to be will also help your Realtor write your contract accordingly if they should need to be wrapped into your mortgage.  We can help you with this also, during the househunting process.

Basically, that document is the key to everything. So, no pressure.

When You Need a Loan for Your Home…

Finding a banker you can trust these days couldn’t be easier.  The first and best stop is to ask us.  We have a list of vetted lenders and brokers we have worked with, and can help match make you with the one that suits your situation best. 

Check out your current bank, and at least one or two others.  Some homework up front will make sure you don’t get a big surprise a few days before closing.

We are here for you!  Here's what some of our clients say about working with us.

How to get your offer accepted in a seller's market

Multiple offers are back, now that we are entering the spring buying season and more buyers are coming back into the market.  We're often the winning bid for our buyers--how does this happen?  By using my Buyer's Cheat Sheet and working closely together my clients were armed and ready.  In a seller's market with low inventory (hello, southwest Montana) there are a few things a buyer needs to know and have ready at their disposal.  So when the right property surfaces...BOOM!  We are on it like ducks on a junebug.

It's an intersesting market all across the country right now, with many seeing solid competition.  But as I always tell my clients, someone has to get the property. Why can't it be you?

Here's my cheat sheet for getting a competitive edge:

Know what a seller's market is.

You've heard the terms buyers market and sellers market thrown around, but what do they mean?  Here's why it's a seller's market right now:

• Properties are selling quickly at multiple price points
• Many are selling for over list price with multiple offers
• Many properties under contract have a back-up offer in place (sometimes more than one)
• Very few properties come on market within a week's time

Get your paperwork in order.

Buyers have often been tracking homes and the market in general using the internet long before they choose their agent.  This is helpful, but unless you take the next step and meet with a lender, you'll be behind the eight ball when you find the perfect home, and there's a good chance not having the right paperwork to accompany an offer can leave you empty handed and out of luck.   Meet with a lender (or ask me for local referrals) to get a mortgage pre-approval letter showing your information has been reviewed and you are eligible for a mortgage to purchase the property.  Paying all cash?  Alert your banker that you'll be needing a proof of funds.  I recommend asking them to draft one so it's ready to customize with a property address without much delay.  This way the seller, their agent and your agent all know you have skin in the game.  Many agents (hello) won't show properties without confirmation you've spoken with a lender in a busy market.  It's a waste of everyone's time.

Make a  commitment to be ready at a moment's notice.

I'm not suggesting you put life and work aside to devote yourself full-time to finding the perfect home.  But, just allotting an afternoon on weekend's or calling multiple listing agents for info on a property will definitely NOT get you the property you want in a low inventory seller's market. When you commit to working with an agent who will get you that home, they are setting aside time in their schedule to meet your needs.  When the right property surfaces, be ready to see it as quickly as possible.  (Stay tuned for my upcoming Buyer Success Story where we made this happen).

Remove the "if's."

In slower markets (or with clients that haven't been properly coached by their agent),  buyers often believe they can rely on contingencies to think things through:  I like it but if there's a problem with this or that in the inspection, or I'll move forward if my lender can get me the terms I want...you get the idea, right?  they do so only with contingencies. For instance, they’ll buy the home if the inspection goes well or if they can secure financing. But in a seller’s market, it may behoove you to drop one or two of these caveats to stand out to sellers, who generally would prefer as few hurdles on the way to closing as possible.

Your agent should be able to coach you on what contingencies you can leave out and what are crucial, based on your situation.

Understand you are not large and in charge.

Back in the olden days (whenever they were for you) buyers came into negotiations expecting to bargain.  "Let's start here (insert low number) to get the ball rolling and see what happens."  In a seller's active market, there is often little room for negotiating on price.  There are exceptions, when a property is overpriced or has flaws discovered later, but most properties are ending up in multiple bid situations in less than 24-48 hours of going on market (remember my suggestion about being ready to jump?) and often go for well over asking price.

Widen your search.

Not just geographically, but in other ways.  Perhaps there's a clogged intersection that people avoid nearby, or some easy updates you could hire a handyman to do that scare away the non-handy buyers.  Go to open houses, talk to friends and colleagues (and your trusty agent) about referrals and general costs if you see items cropping up on properties.  This will help keep you nimble and ready to jump, as you'll be armed with real information to help with your decision.

Make your agent work.

In a hot market, it's easy to get discouraged or feel like you may overpay for a property.   Ask your agent to run comparable research for properties you are interested in.  This is researching sold, pending and currently active properties that are similar in style and location.  This will give you good solid information on how prices are moving.

When you find a place that fits the bill, you'll both be able to assess it quickly.  If they are just showing you properties and waiting for you to decide, find another agent.  They should be able to brainstorm different scenarios and options to help you make a clear decision.  That's the fun part for me!

 Contact me to sign up for my Direct Access Program for buyers and more tips on buying property in Montana, as well as this cheat sheet in PDF form. 

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Some information for this post provided courtesy of http://realtormag.realtor.org/daily-news/

   Click here to view video of Butch & Debbie.

In an ideal situation, you'd find the right home to buy, pack up your things from your current home, and move. Then, once things are settled, you prepare your old home for sale, and then sell it.

That can happen, and we'll talk about that in just a bit.  But here's the more common scenario that home sellers dread:

"Hi Page, OK, we need to downsize/upsize/lateral-size/relocate...one of the above.  

We have some money for the down payment on the new house, but need to sell this house to buy that one.  We can't afford two mortgages at once.  Well, we could possibly do it for a little while, but I can't handle the stress or uncertainty of that.  What if it doesn't sell?  I can't do it!

Also, what if someone comes in the door and wants to buy our house right away, and we can't find a new house?  There's nothing to buy right now, and we've been looking for a looong time on the internet.  What happens then?"

Lots to think about. but first...

We are currently still in a seller's market, even though it is quieter and a tad slower than it has been the last several years.  A sellers market means there are more buyers than there are homes available, so someone with a home to sell is in a position of power.  Within reason.

If a property is prepped for sale, staged and priced appropriately, it will likely sell quickly.  As of last month, the median days on market for a single family home in our area  is about 47, up from about 8 days this time last year.  That's not necessarily a bad thing, but it also means that in order to meet that typical time frame, you can't price the home above what it will likely sell for.  An extra couple of months on market could throw everything off, and possibly end up costing you more in the long run.  Let's avoid that.

My rule of thumb regardless of the market: The longer your home is on the market, the less it will sell for.

Let's dive into the options:

1.  Sell first, then buy.  

This is how most people think it MUST go. But it rarely happens in that order.

You prepare your home for market, list it, close and then look for a new home.  This works well if you have a temporary place to live and/or store your items, or are comfortable doing a post-close occupancy rental agreement with the new owner until you find a place.

The problem with this option is, you need a buyer that will agree to that.  That make your property desirable to a smaller pool of buyers.  It's not impossible, just more constraining.  Regardless, you are still under the gun to find that new home, whether you are couch surfing or renting your former home. Not ideal.

2.  Buy first, then sell.

Buying your next home first gives you the most control over finding the perfect property instead of being rushed to find whatever happens to be on the market.  Using your current home's equit, taking out a short-term bridge loan or mortgage or finding seller financing until it sells are just a few of the ways I've worked with clients to make this happen without a lot of financial stress.  

If you are relocating to a different market, I can also provide you with information on the community, average home sales pricing, and other data to help you make that decision.

3.  Sell and buy at the same time.

Several stars must align in order for this to happen.  Without additional financing you typically will need to get an offer accepted contingent on you closing on your current property. This works best if it's already under contract, and is also possible if it's been listed (though that's a weaker offer).  The less desirable option is to wait to list until you have an accepted offer based on you closing, but sometimes that can be done if the house you want to buy doesn't have a lot of competition, needs some work or has been sitting on market for awhile.  

The goal with this option is to spell out clear and specific terms so both you and the seller understands how it will go.

                           Hanging out in their new home!

Equity growth in our area has been projected to be anywhere from flat to 2-3% in the next year, increasing slightly after that in 2024.  But since we still have low inventory in comparison to the number of buyers looking here, you are still in the driver's seat in terms of choosing the approach that works best for you.

Let's sit down and talk options.  My goal is to help you live the lifestyle you want in the home that matches that lifestyle best.  Whether it's now or in several years, I hope to be a resource you can count on for accurate, honest information.

________

"Best agent I have ever worked with, hands down. Exceptionally professional, knowledgable, honest and communicative, and handles complex transactions seamlessly. Page goes way above and beyond, especially and importantly in the current environment. She has a wealth of experience and it shows." --Michele H, Bozeman

"The sale of my house went very smoothly working with Page. Page is hard working and organized. It is a complex task to navigate multiple offers; Page presented the comparison between offers in an organized manner. Her communications, attention details and professionalism is exceptional. I recommend Page to sellers and buyers." --Mitchell K, Bozeman

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.

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!

As we cruise through a warm and sunny (and so far little smoke) here in Bozeman 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!

Want more info? Here's a link to info on Bozeman Short-term rentals and what's involved.

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.

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 property in Montana with the least amount of inconvenience and stress for you.