Wanda's Blog From Billings, Montana

I was watching one of the morning shows this weekend and Suze Orman was talking about her newest book on personal finance.  She had 3 major points, and the one I listened to the most was about home buying.

She said that a home buyer should only buy in this market if they have 20% down and 8 months of expenses in the bank.  This is actually nearly the case for how my family has purchased our last 3 homes, but it wasn't the case for my first home.  I also think it's a bit of a stretch for many first time home buyers to reach this saving goal. 

Right now, rent is very similar to a house payment, and in some cases even more.  Our home prices in the Billings Montana market has decreased since this recession, anywhere from 3 to 10% (some neighborhoods even more).  We count ourselves fairly lucky, as far as prices go, but I am wondering if prices will continue to fall this year.  I don't anticipate rents decreasing!

I think this is a great time for first time homebuyers to purchase, and I do agree with the concept of downpayment and some saved living expenses, but I don't know that I agree with the Suze Orman tout in my region.  Our unemployment levels in our state are closer to 7.4%, and as low as 5.5% in Yellowstone County over the last couple of years.  Our ups and downs in our home sale markets tend to be smaller peaks and shallow valleys.  We just tend to respond a little behind the boom parts of our Country.

I don't have a crystal ball, but I would think that someone with a decent credit score, a good job, a good debt to income ratio and a desire to purchase with the intent to stay for 4 or more years, can probably do well in this market.

First time home buyers are the juice for many markets, because homeownership is a strong desire for many. 

I'd hope that the first time homebuyers of the recent past and the future will find themselves in the same position my family is in right now, in middle age, we have a strong equity position in the home we love.  To pay off a home is actually a good goal!

I love home buyers with big downpayments, don't get me wrong, but we all start somewhere!

The Quilting Realtor

Many Dream Of Living In Montana I'm One of the Lucky One's That Already Do! Wanda Thomas 2wandathomas@gmail.com Call or Text 406-698-8640 for help with all things Montana. Local MLS Search Link

Some people are totally surprised that some of the rural areas of Yellowstone County have limited access to good drinking water. 

• Sometimes the reason is simply that if you drill a well, you may not find water if you drill, and drill and drill.  It gets pretty expensive to just keep drilling!
• Sometimes the water that you do reach is of insufficient quantity and what may be worse, it has too many yucky solids in it to be good for you.
• Sometimes the cost of the well prohibits some landowners from even trying to drill a well.
  

The next best option is to dig a hole and have a water tank buried under the ground and have the tank filled by a source that's delivered on wheels.  Lots of people use a water hauling service, some stick a tank on the back of their pickup truck and pick up a tankfull on the way home from town.

When a FHA buyer is looking to buy a home that has a cistern water supply, they run into a little problem with getting the loan approved, generally, FHA doesn't approve cistern water sources unless cisterns are common in the area.

Back to Yellowstone County, and a few other counties as well, an FHA buyer must apply for a Cistern Waiver from the "powers that be" in order to qualify the home for the loan.  In Montana, the nearest office for this approval is in Denver.

The cistern waiver process requires:

• A cover letter with all of the details of the property, lender, FHA case # and about 10 other things
• An FHA appraisal, complete with color photos
• A water test, completed by a non-interested third party (like a home inspector)
• A long wait once all of the proper documents have been delivered to the HOC/Appraiser that processes the requests, sometimes it can take 30 to 45 days!

Buyers and sellers need to work together with their Realtor and Lender to make sure that all of the steps have been followed correctly the first time, no body wants to start this process over!

So if you are considering a move to the country, and the water source is a cistern, and you want to use an FHA loan, a bit of planning will make the whole process go smoothly! 

My good friend has raised 5 children (all that laundry) and never has given her cistern a second thought (other than to make sure the deliveries come on time!)

Montana living, it's a good thing!

The Quilting Realtor

Many Dream Of Living In Montana I'm One of the Lucky One's That Already Do! Wanda Thomas 2wandathomas@gmail.com Call or Text 406-698-8640 for help with all things Montana. Local MLS Search Link

What will Echo Boomers learn from Baby Boomers?  While the terminology of Baby Boomers seems to have an identity I'm familiar with, the term Echo Boomers is something I've recently started to think about, especially since I produced a few of them myself.

What is an Echo Boomer?  A child of a Baby Boomer, and the Echo Boomers are watching their parents!  What will they be learning and doing for their future?  What will we (a Baby Boomer myself) teach them about home ownership?

• That you can make a lot of money, tax free, when you sell your home if you bought low and sell high.
• That you can lose a lot of money, tax free, when you sell your home if you bought high and sell low.
• That the idea of home ownership is a term used very loosely, especially if the bank owns your home and you just rent it from the bank.

First time home buyers are looking for a "long term" home more so now, than in the recent past.  Since there is no guarantee that the home you purchase today will increase in value in the next 10 years, at the rate it did in the late 1990"s and early 2000's, there is more caution and care in neighborhood location. 

In Billings Montana, home buyers are looking to find the best home they can afford.  They drive neighborhoods, in all price ranges, looking to see how people maintain their homes, is the neighborhood declining or improving?  Would this neighborhood be a good place to live and raise a family?

Is home ownership a good investment?  Yes, but maybe more of an investment in the security and comfort one achieves with actually paying down a mortgage.  My own kids have seen their parents working to be mortgage free! It isn't easy, it requires sacrifice (maybe the newest and best phone and tv aren't as much of a priority).  

Echo Boomers make up the bulk of first time home buyers, and they'll be a larger group by demographics, than their Baby Boomer parents.  The choices for home ownership the Echo group makes, will dictate many of the stats of the future:  home price, size, bedrooms, baths, location and energy usage.

Are you listening?

The Quilting Realtor

Many Dream Of Living In Montana I'm One of the Lucky One's That Already Do! Wanda Thomas 2wandathomas@gmail.com Call or Text 406-698-8640 for help with all things Montana. Local MLS Search Link

I heard something on one of the morning news programs today that just made me want to chuck my coffee at the new big screen tv. 

Some "knowledgeable" woman was being interviewed about the housing market and was telling the commentator that people would no longer be able to get a mortgage loan unless they had 6 months of monthly payments and utility bills in the bank (cash reserves), after they paid their down payment and closing costs.  WHAT?

I haven't even heard of this before, and maybe I heard it wrong, but that's what I heard, and I was listening.

In my local market, that is absolutely not the case!!!  Maybe there is a home buyer that has a history of some sort that puts them into a higher risk category and requires them to have this "emergency" fund, but a normal buyer has not required this, to my knowledge.

Just hearing that scares the crap outta people, for crying out loud!  I want good buyers to make purchases, and I don't want people to overspend or be under-qualified.  But this kind of message (the one about how hard it is to get a loan) gets to people who really are qualified and they hold back!

This is a great buyer's market, a great move up or over market, for qualified buyers!  I've run into 3 people in the last 2 weeks who have great jobs, make a good income and want to move, but they're afraid to have their credit score checked! 

I've asked, have you missed some payments?  No, they just don't want to subject themselves to the investigation into their own credit score.  They're afraid they won't have the high standard qualifications that are required to get a new loan today.  In Billings Montana we have a very small short sale, foreclosure market, it's really only about 3 to 5% of the homes for sale.  Our average home price keeps going up! 

Some homes are not worth what they were in 2007, that is true, and we have sold about 44% less homes than in 2006, but I repeat, of the homes that have sold, the average price is up, even above any other time!

I guess I'm kinda wondering how to reassure people that a home loan is not as hard as it looks, when you have paid your bills on time, saved a little money and have good income.  But when someone goes on the National News Network and says that people now need 6 months of expenses in a ready cash account, we've got a problem.

Maybe I should just stop watching Saturday morning news programs, they might be too much like Saturday morning cartoons!

The Quilting Realtor

Many Dream Of Living In Montana I'm One of the Lucky One's That Already Do! Wanda Thomas 2wandathomas@gmail.com Call or Text 406-698-8640 for help with all things Montana. Local MLS Search Link

Water is really, really important (and not just in Montana), but some people think it either comes to you in a ditch or comes outta the ground via a well, and well, there you are!  I know I'm leaving out the municipal water systems, often supplied by rivers and reservoirs, but I'm talking country living here!

Several times over the years I've shown clients Montana Land and welcomed the assistance of a seller's agent to help with property details only to have the seller's agent claim that the water is about 200 feet down and very plentiful.  Oh really?  How do you know for sure?  Well, we had a witcher come out and witch the land and that's what they said.

Water witching is a great tool, but that's all it is, a tool.  A witcher cannot guarantee a water producing well anymore than a cloud seeder can promise a good rain! 

For those of you who don't know what a water witcher does, think of someone who really connects well with the earth, so well in fact that when they hold a length of willow or more commonly, a metal rod, they can walk the ground and sense a pull of water under the ground.  (I think I should just try this sometime, I'm kinda earthy myself)

A Montana Land buyer takes the same risk with drilling a well as anyone else who either owns land or buys a piece.  There just aren't any guarantees. 

I've sold subdivisions before that had a good producing well at 50 feet on one lot, and 2 lots away (2 acre lots) the water was 600 feet away and gassy, salty and a low producer.

Sometimes I think we like to believe that someone can give us good information on a water well, even if one doesn't exist.  I'm sorry, but this is just impossible.  A Montana Land Buyer needs to weigh the information that is available and make their own decision about the value of the land, with or without water.

Having purchased 2 pieces of land myself, without wells, I knew I would need to drill and hope for the best (thank goodness it all worked out well).  I keep using the word well, a lot!  Happy Drilling!

The Quilting Realtor

Many Dream Of Living In Montana I'm One of the Lucky One's That Already Do! Wanda Thomas 2wandathomas@gmail.com Call or Text 406-698-8640 for help with all things Montana. Local MLS Search Link

Your Realtor is not your home inspector, period!

So if your Realtor tells you that the roof looks fine and the foundation is strong, it may be a good opinion based on a general intelligent observation, but it is not a substitute for a home inspection.

A home inspector is another opinion, by a "hired gun" that a home buyer or seller pays, regardless of the outcome.  The home inspector is contracted to perform the inspection duty, whether or not they find anything wrong, and, there's almost always something less than perfect.

I don't appreciate home inspectors that freak out about normal things that they find in need of repair.  On the flip side, I do appreciate home inspectors that do a thorough job and educate and recommend repairs if needed.

I've had a few inspectors recommend that people walk away from a house, I don't like this either.  Why?  You cannot assume to know the motivations of either the buyer or the seller to negotiate and remedy a problem, even really big problems.  There is almost always a buyer for a property, at the right price.

While many Realtors are very observant and very educated in property inspection details and how to resolve and negotiate resolutions, Realtors must rely on other professionals for this service.  In Montana our Purchase Contracts are very specific about this:

The Quilting Realtor

Many Dream Of Living In Montana I'm One of the Lucky One's That Already Do! Wanda Thomas 2wandathomas@gmail.com Call or Text 406-698-8640 for help with all things Montana. Local MLS Search Link

How many homes should a buyer look at in one day?  I get asked that question every now and then, how do you decide? 

How many homes should a buyer look at before they make a decision, that's an even bigger question!

I try to schedule between 3 to 5 homes in one day, at the most.  It's a bit of a scheduling dilemma to show more than that, unless the showings involve vacant homes.  I even try to alternate vacant homes with occupied so that the schedule can be a bit more certain for a seller.

Factors that affect the seller:

• if the seller has kids, lots of coordination is needed
• avoid meal times, it's the pits to have showings right at dinner time
• pets need to be removed or at least contained
• seller's do best with a 1 or 2 hour window, I offer to call or text them when I've left

Factors that affect the buyer:

• it's hard to remember what kitchen went with what master bath if you look at too many homes in one day
• you never know how much time you may want to spend exploring, some homes take less than 2 minutes, because they are not what you wanted; some take an hour because you have lots of interest
• a buyers schedule may be hard to schedule around due to employment or child care

The Internet and good pictures have really helped buyers rule properties in or out.  Doing a drive by and checking out the neighborhood is also a good first step.

Sometimes, even the best laid plans go hay-wire, but I love the adventure of making a day of showing homes!

The Quilting Realtor

Many Dream Of Living In Montana I'm One of the Lucky One's That Already Do! Wanda Thomas 2wandathomas@gmail.com Call or Text 406-698-8640 for help with all things Montana. Local MLS Search Link

Downpayment assistance is still available in Billings Montana for people who want to buy a home and can qualify with income and credit.

I went to a coffee meeting hosted by Stockman Bank for local Realtors who wanted to find out more info about the current state of lending in our community.  I was presently surprised to find out that if you want to buy a home and need a little help with downpayment assistance, you may qualify for some of our local programs, namely City of Billings Funds and Neighborworks Funds.

One of the hardest hurdles to overcome for families that have good jobs and good credit, is saving for the downpayment.  Seems something always comes up and chips away at savings (dental care, tires, car problems).  The hopeful homeowner seems to get through these issues and manage, but has trouble with saving for the downpayment.

The City of Billings downpayment assistance program is funded by HUD.  Your local lender can help you apply for some of these funds (today there is $290,000) that can be used as downpayment on a home.  It still takes a minimum of $1,000 to obtain the maximum assistance of $10,000 to $15,000 depending on the borrower's annual household income and number of dependents.  The funds must be paid back if the home is sold or refinanced. 

The Neighborworks Montana program also requires a minimum investment of $1,000 to obtain the maximum loan amount of $10,000.  Loans are paid back along with the borrower's mortgage payment over a 15 or 30 year term.  This program is not limited to first time homebuyers.

Don't count yourself out if you have most of the means and the gumpshon to buy a home.  These downpayment assistance programs may be helpful for:

• First Time Homebuyers
• Single parent with dependent child or children
• Borrower (s) with disabled family member living in the home

Some of these programs may also have a "forgiveness" clause if you live in the home for a lengthy period of time.

Both of these programs require the borrower (s) to complete a Homebuyer Education Class.  The class is designed to prep homeowners with the skills required to be successful with homeownership.

The Quilting Realtor

Many Dream Of Living In Montana I'm One of the Lucky One's That Already Do! Wanda Thomas 2wandathomas@gmail.com Call or Text 406-698-8640 for help with all things Montana. Local MLS Search Link

Log home living always seems to tickle the fancy of most western bent people, some just dream, others live the dream!  

Log homes feel warm in the winter and cool in the summer, just the nature of the mass involved in the structures.  The Western flavor that fits best in these homes is a mixture between Cowboy/Cowgirl and Lodge/Cabin.  You'll find the Cabin decor popular in the mountain areas, and the Western decor out on the prairie.

I just sold a little log home in the residential area of Billings Montana to a lovely couple who had a history of living in a log home when they were children.  The comfort and pleasure in owning this home was evident on the faces of the new residents just yesterday when they got the keys!  Congratulations to the Baker's!

Finding a log home is not always easy, they just don't seem to come up for sale very often!

If you need some help finding a log home to live in or need a connection with a couple of good local log home builders, just let me know and I'll get you connected!

The Quilting Realtor

Many Dream Of Living In Montana I'm One of the Lucky One's That Already Do! Wanda Thomas 2wandathomas@gmail.com Call or Text 406-698-8640 for help with all things Montana. Local MLS Search Link

The Billings Heights includes the areas of properties East of Main Street clear out to the Shepherd/Huntley Bridge!  I find this a bit confusing since the Pioneer School District is included in Area 2 Billings Heights.  One thing to keep in mind is that the zip code for this are out Highway 312 is 59105 for the area South and East of the Highway, as well as a few sections to the North of Highway 312.

Property searches for the Pioneer School District, which is an Elementary School, should include Area 2.  The Pioneer School District uses the Shepherd School System for Junior and Senior High Schools.

Activity for Residential Real Estate in Area 2 right now shows 91 listings active on the market right now.  Of those about 14% of them are under contract and either Pending a sale or have a contract with a Contingency which must be met for a sale.  The average listing price right now is $195,000.  The average listed price for those homes pending a sale is $178,000 and the average listed price for those homes under a contract with a contingency is $171,000.

Activity Index for Area 2 in Billings Montana is about 14%.  This is a bit lower than the 23% Activity Index just researched yesterday for Area 1 in the Billings Heights.

The Quilting Realtor

Many Dream Of Living In Montana I'm One of the Lucky One's That Already Do! Wanda Thomas 2wandathomas@gmail.com Call or Text 406-698-8640 for help with all things Montana. Local MLS Search Link