Wow, the last couple of years have been a significant whirlwind of ups and downs in the real estate market. Understandably, the thought of selling your home can lead to considerable confusion and questions. Is this a good time to sell, is it not? What are buyers’ expectations now that the market is normalizing? If you’ve decided to sell, what are your next steps? Here we try to address some of the uncertainty of selling in our current market.
Jumpy interest rates
Interest rates have continued to trend upward, with occasional dips along the way. The thought of paying higher interest rates on a new mortgage is daunting to many potential home sellers. (Although those of us who lived through the 80s still consider interest rates under double digits somewhat reasonable.)
There is a lot to consider. While interest rates are climbing, home pricing hasn’t dropped as much as you may think. In Western Montana, inventory remains tight. The days of multiple cash offers and bidding wars may be a thing of the past, but housing prices remain very healthy. This situation can equate to more equity for you to spend on your next home. You may have to pay a higher interest rate, but you may have to borrow less for your next mortgage. There is also the option of a 15-year mortgage with a lower interest rate – if you can afford the higher monthly mortgage. Holding back a few thousand from the sale of your home to refinance your mortgage when interest rates drop may not be a bad idea, depending on how long you intend to live in your next home. Also, shop around for lenders – some are offering a free re-fi once rates drop.
Before deciding to move, this complex topic should be fully discussed with a trusted real estate agent and mortgage lender.
Be ready to move!
We are seeing houses stay on the market a bit longer than in 2020 and 2021, but if your home falls in that $300K to $500K price range, it has a good chance of moving quickly due to low inventory.
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Speaking of timing
Due to the aforementioned inventory issue we are experiencing in Western Montana, you and your trusted real estate professional will want to weigh the pros and cons of listing now – without sprucing up the yard and planting flowers – vs. waiting until June to get everything just the way you want it prior to listing. Is there an opportunity for you to capitalize on the low inventory right now?
A knowledgeable market leader
Amy Bain-Wilson, Glacier Sotheby’s International Realty’s Managing Broker in Lakeside, MT says partnering with a knowledgeable market leader is crucial. “Look for an agent who knows specific aspects of the market in which the property is being sold and has been involved in multiple transactions concerning the property’s price point and type of product i.e., waterfront, new construction, commercial, investment, etc.” Amy also underscores the importance of aligning with an agent who has trusted and proven negotiation skills that have been honed through multiple transactions.
Crystal Ault, Managing Broker in the Glacier Sotheby’s International Realty Missoula office agrees and adds the importance of building a team with a knowledgeable lender. “A good team is so important! Your agent and your lender working together seamlessly can make a deal come together, and if they don’t, the deal can fall apart. A local lender with a proven background and several programs to offer is essential. Some lenders are even offering a low-cost or no-cost refinance down the road when rates are more stabilized.”
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Getting ready to list
Katie Brown, Glacier Sotheby’s International Realty’s Managing Broker in Bigfork, MT recommends obtaining an updated market pricing analysis, even if you had one just a few month ago, as the value may have changed. Katie adds, “It may not be the time to work on the exterior of your home due to weather, but it is a great time to start ‘staging’ the inside. We can create a prioritized ‘hit list’ for where to start. Finally, it may not be a bad idea to get a home inspection, including a radon, mold, and water test done to be aware of anything that a potential buyer may be concerned about.”
Choosing a Realtor
You can read articles for days on how to choose a Realtor and what questions to ask them, but we’ve got a few thoughts on the subject. Selecting a Realtor two years ago and choosing someone today may not look the same. Here are a few tips for landing a real estate agent you can trust to get you through a real estate transaction in this market.
- Get a recommendation. This may seem obvious, but most agents’ business comes from word of mouth. If you get an organic recommendation for an agent, it means they provided a level of service worth talking about. Still, do a little due diligence with any suggestion that you receive. Google your agent, check their social media presence, and read any available ratings.
- Newbie vs experienced. Most articles on this topic will tell you to lean into agents who have years of real estate experience behind them. That is good advice, but don’t discount new blood. New agents are energetically building a new business and – as in the case of Glacier Sotheby’s International Realty – they will have a Managing Broker in their hip pocket who typically has years of knowledge and expertise to help guide them. If you decide to go with a newer agent, ask what kind of support network they have.
- Marketing and brand. What kind of top-of-mind awareness does your agents’ brand have? What kind of reach does that brand have? What type of marketing materials does an agent have at their disposal to properly market your property?
- Neighborhoods and areas. Ask your potential Realtor what neighborhoods, towns, and regions they specialize in. As Amy mentioned, ask what types of properties they specialize in (ex: lake, ski resort, mountain retreat, etc). Ask what trends and market shifts they have seen in their particular area of expertise.
- Availability. Ensure you leave an agent “interview” with a clear understanding of the agent’s availability. This will alleviate a lot of frustration for everyone if this is addressed early.
It’s not a secret that real estate markets are cyclical, but COVID put a new and exaggerated spin on our Western Montana markets, unlike we’ve ever seen. Now that interest rates are trending up and prices are stabilizing, it’s more important than ever to perform due diligence with a trusted real estate professional and mortgage lender.
Kat Hobza has lived in Montana since she was nine and was raised in the mountains west of Victor, Montana. There, she learned to hunt, fish, shoot competitively, chop and stack firewood, and drive on icy and muddy roads. Kat has over two decades of experience in professional writing, content, and digital marketing and is a marketing consultant for Glacier Sotheby’s International Realty. When she’s not working, she’s either hanging with her hilarious adult kids or soaking up the sun somewhere – a riverbank, a golf course, or her deck. You can contact Kat through her business website, Way Easy Marketing.
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