1st time Montana home buyer? Great- here is what you need to know
Summer is the busiest home buying time of the year according to LemonBrew, and that means that NOW is the time to start doing your homework so that you are in the best position possible to buy your dream home.
I sat down with three realtors recently and learned many great tips about when it comes time to buy a home, whether you are a first time home buyer or if you are an experienced investor in real estate, this is for you.
Thank you to:
Kim Martin with Dascoulias Realty Group
Robin McKnight with Montana's Best Realty
Molly Schulte with RE/MAX® Real Estate
All three of these professionals were very gracious and open about tips on helping buyers reach their goal of home ownership.
What is the most important 1st step, for a first time buyer:
Robin: As a buyer, the 1st step is to connect with a lender and get pre-approved, if financing is needed. Buyers must know their budget and be informed about which type of financing works best for them.
Robin- An offer appears more desirable if a pre-approval letter is attached.
Molly: Going to see a property and not knowing your price range that you could shop in, or if you would even qualify for a loan was a waste of your personal time. If you weren't pre-qualified or knew where you should be shopping, it was a massive waste of your time.
Molly- As a Realtor, I don't like to show people things they can't have.
I feel like lenders drive the process. And so getting connected with a good lender, because that part is pretty confusing, and for a first time home buyer or even a multiple time home buyer, things change. So getting with the lender, knowing your price range and where you can start, that's probably the smartest step to go first.
Kim- The number one thing is to get pre-approved.
Kim: You really have to talk to a lender, otherwise you just have nowhere to start with. A seller is not going to even look at an offer if you have not been pre-approved from the lender. So that's the very first thing. There are a lot of different properties. There are a lot of different things out there that can help you, like with down payment assistance and things like that. But some of that stuff takes time. And so you don't want to go shopping this weekend for a house and expect to have it in 30 days. You really need to plan ahead a little bit more than that.
Do's and don'ts when searching for a property
Molly- Don't compromise on something that you were initially wanting.
Molly: If you wanted a big backyard, don't compromise on that. If you needed a garage, don't compromise on that. And I think we saw that, when the market was really big, people had to compromise on their top three to five things. I don't love that, because you're not going to love that house. Once things slow or change or you're in there for three to five years, you're going to really look back and wish you had that. So in the home buying process, when I first start looking with people, they'll say things like, oh, I don't like this kitchen, or oh, I really wanted a Master or a Primary bathroom. I wanted a backyard, I need a garage, location was important. And so as I continue on with people and then they find something or they're getting frustrated with the process, I don't let them compromise on the top three things they told me. You'll have to compromise on something. We like to think there's a perfect home for people, but if you have a long list of things, you're essentially going to have to give one or two. But if it's that top three to five things, I don't like my clients to give that up.
Kim: When searching for a property once you've picked your realtor, stick with your realtor. Unless for some reason you're not jiving with them, then, yes, obviously there's many other choices, but be open and honest with the person that you've been talking to. Calling on every sign is not a good way to get the answer that you want to get. There are many times when you drive by, see a sign in a yard and that property already has been under contract for some time and it's just waiting to close.
Kim- Your agent wants you to find a house. If there's something out there, they're going to send it to you. You're going to know about it.
And the chances of one being missed is pretty slim. I guess the only other thing I would say is when you are actually looking at properties, please keep in mind that there are many, many, many recording devices in houses these days. The easiest one, ring doorbell, but some of them are a little harder to see. Please enter all properties as if they are video and audio recording you and do not give away any of your secrets when it comes to negotiation time.
Robin: In this competitive market, it is important to have a knowledgeable Realtor in your corner. Talk to friends, family, and acquaintances to see who they may recommend but also conduct your own due diligence when researching a Realtor and then schedule a meeting with an agent.....or two...or three.
Robin- Make sure the Realtor is the right fit before you start the process of buying or selling a property.
Questions that the buyer should ask the realtor.
Kim: I would ask how long they've been in the business and how long they've lived in the area. That tells me a lot. Just because, even my hometown that I grew up in and had lots and lots of fun in isn't a place that I would feel comfortable selling a property because I have never looked at it as if it was a place to buy a house. I was just a kid growing up, so I didn't look at it as this area might have this concern with the soil, or this area might be windier than that area, or this area allows for duplexes and multifamily homes where this area does not. I
Kim- If I am out looking at a property and the person that I'm working with has never dealt with septic systems or wells or those kind of things, fences, property, what kind of animals you can and cannot have, yes, I would be concerned with that. Some of us know that stuff and some of us do not.
Robin: Questions for the agent, Market inventory & MLS info, lender information, does the Realtor work weekends & evenings, Realtor's response time to clients.
Molly: I think they should ask about availability, are you available to show me houses as much as I need, because maybe times and things won't line up.
Molly- Maybe you always need an evening showing and somebody can't do evening showings.
Going back to the digital world, realtor.com or Zillow, although they're a beast of an industry, there's reviews on there in Google. Look at the google reviews and see where people are rated and what their past clients have to say about them to make sure that they're a good fit for you. We're not home inspectors, so asking us things about foundations of homes or roofs or things like that, we're not the best expert in that. But if you have any major concerns like area or school district or things like that, we can get you to the right resources to be able to do your due diligence as a buyer.
Is there a state agency that can help with issues or concerns
Molly: There's a state program. I'm not very familiar with this because we like to think things go very smoothly on our side, but I would call it Great Falls Association of Realtors. They are the local agency here and they will direct you into the right area. If you need to file a grievance or you're very uncomfortable or something like that, they'll point you in the right direction. We're held to a standard and a code of ethics and so we definitely, as all Realtors, like to maintain that. So if you're not feeling like something's right, you should always listen to your gut and your feelings and you should seek out resources to get the necessary help so that we can all be held to a high standard of practice because it's just like any other business.
Kim: There actually are a few resources. So the Great Falls Association of Realtors, which most of us belong to here, and the Montana Regional Association, the MLS, both have things in place. We of course, are licensed with the state of Montana. So there's the Board of Realty regulation. You can check in with them. They do a lot of license things, though, I would say if it's somebody right in our area and they just don't feel like something's just not right. The Great Falls Association of Realtors has the person, the people that you want to talk to there. You're always welcome to do that. That is a public building, 401 13th Avenue South in Great Falls, and they can help you through that process. We have Ombudsman and we have mitigation. So we want everybody to be happy. Like I said, it's pretty small. We want good reviews.
Are there classes or other courses a buyer should take
Molly: Neighbor Works is a great program here in Great Falls and they offer a first time home buyer experience. Another great resource is the title companies. They see so many transactions come through and we have great title companies here in Great Falls that it's just another neutral party that can help you answer questions. They hold a piece to the whole process that we're not as knowledgeable as they are. For me, there are oftentimes people I refer to if I don't know answer to a question.
Kim: I would 100% always recommend the Neighbor Works Great Falls classes. They're now offered hybrid, so you can do it in person or online. This is something that I was offered a gazillion years ago when we bought our first house, and in my mind I thought that was only helping people that had lower credit or needed some extra help. I didn't put myself in that position, so I didn't do the classes. Now that I have helped teach some of the classes, I know that they are bringing in home inspectors and they're bringing in appraisers, and they're bringing in insurance people as well as Realtors and other people in the industry. And it's overwhelmingly a ton of information.
Robin: Neighbor Works Montana, which provides homebuyer education, is one of many programs available that could help with down payments and other facets of the loan process.
What else should the buyer know
Robin- Interest rates are volatile so keep the lender and your Realtor on speed dial to keep up with any activity. GET READY FOR ACTION !!!!!!
Robin: Your Realtor will forward listings that fit your criteria and the internet can be a very useful tool when looking for properties. Please confirm the authenticity of all listings you may find with your Realtor as a safety precaution and shop within your budget. Upon finding a desirable property, your Realtor will assist you in making sure you are getting the best bang for your buck. Your agent will walk you through the offer process, inspections, appraisals, and closing. DON'T BE AFRAID TO ASK QUESTIONS as we don't expect you to know the full process.
Molly: I always tell my clients, this process is very overwhelming and you are most likely going to be mad at me at some point in this. We are now entered into a relationship where you're going to be sick of me calling or texting. I won't get sick of you, so trust me.
Molly- We're basically entering in a relationship for 30 days to 45 days to 60 days, where we're going to talk almost every day.
I really do think Realtors are your best way for first time home buyers to have the knowledge. We are physically in it daily.
Kim: The only thing that I can think of is there are no crystal balls? We have lots of educated guesses, there's trends, things like that. Three years ago we saw stuff that we've never seen before in the world. So that COVID affected every single one of us in every different ways.
Kim- So have patience. We don't know what the rates are going to be like, we don't know if property prices are going to decrease, we don't know what the inventory is going to be like.
It is very normal for inventory this time of year to be low, and it usually picks up in April or May. So, just keep learning. Get into it. While buying a home is one of the best things you can do financially in your life, it is definitely, definitely a stressful thing as well. So be prepared.
If you have a story idea or something you want to learn more about, give Randy a call at 406-788-3003 or send me an email at email@example.com