Considering a Fixer-Upper? Think About These Things First

A property that requires renovations is known as a fixer-upper. For many owners, this purchase has several advantages. In some cases, this type of property can offer an excellent investment opportunity. However, buying a fixer-upper can have a few disadvantages as well. There are instances when renovations can cost more money than the property is actually worth. For that reason, before making an offer on the property, it is important to get the property inspected by an experienced home inspector. The inspector can evaluate the area, the condition of the property, and the extent of the renovations. More importantly, the inspector can identify renovations that are simply minor cosmetic repairs vs. renovations that require major structural improvements. Potential owners should consider the amount of time required to complete renovations. A precise timetable is useful for determining whether property prices and current mortgage rates are likely to increase or decrease during renovations.





Owners that are considering buying a fixer-upper should identify all structural renovations. In most cases, major repairs such as electrical and plumbing are expensive. These types of renovations do not increase the value of the property. Moreover, strengthening the foundation and repairing the roof will not raise the value of the property either. These improvements are a major disadvantage of purchasing a fixer-upper; however, they are required to sell or live in the property.





When a fixer-upper is in a quality area and does not require major structural renovations; renovating the property and reselling it is a considerably profitable option. For many potential owners, it may be beneficial to weigh the pros and cons of buying a fixer-upper.





Advantages of Buying a Fixer-Upper




Reduced Buyer Competition




A fixer-upper is a property that requires renovations and most buyers are not interested in performing extensive improvements. Reduced competition for the property is an advantage that some buyers find appealing. In most cases, decreased competition for the property can reduce the final price the buyer pays.





Personalize The Property




Another advantage of buying a fixer-upper is the buyer can fully customize the property. Many buyers believe placing a personal stamp on the property can make it a home. Do-it-yourself repairs that include cosmetic renovations offer a level of satisfaction. These are inexpensive repairs that are visible when reselling the property. Minor DIY renovations that owners find enjoyable are replacing fixtures, paint jobs, stripping wallpaper, placing tiles or carpet, putting in ceiling fans, and replacing windows or barndoor hardware. These types of renovations can increase the value of the home and add style.





Disadvantages of Buying a Fixer-Upper




Going Over Budget




The biggest disadvantage of purchasing a fixer-upper is going over budget. Although loud renovations can create sound issues and living complications; going over budget, is the most common issue associated with buying a fixer-upper. In some instances, an inspector may identify one issue that leads to another. The inspector may even inform owners that one repair cannot be completed until other improvements are completed. For example, foundation issues may not be completed until all plumbing and electrical issues are resolved. It is important to add that a home warranty can protect owners from high costs associated with failures of major systems.





Decreased Return on Investment




Another disadvantage of buying a fixer-upper is the improvements do not return 100 percent of the cost when the owner sells the property. In the event the property requires specific improvements, the owner should attempt to offset costs with valuable cosmetic enhancements. Cosmetic renovations offer the most effective opportunity to receive a return on investment.





Frustration and Inconvenience




Whether owners are completing the repairs or hiring professionals, there is a lot of time supervising and ensuring the work does not go over budget. This is a frustrating and trying process. Owners must guarantee that issues are corrected inexpensively and completed in a timely manner. This is a common disadvantage associated with purchasing a fixer-upper.





When considering purchasing this type of property, potential owners need to weigh the pros and cons. Owners must ensure that the property is worth the price. More importantly, owners must ensure renovations do not cost more than the property itself.

Written by David Glenn

What is unique about Eagle Rock Reserve, Bozeman, MT

Surrounded by open meadows, forests and mountains. Eagle Rock Reserve is unique in its design, goals and access to Bozeman and spectacular natural scenery. Eagle Rock Reserve was created to accommodate 39 single family residents while protecting the natural scenic and environmental integrity of the land and the security and the quiet enjoyment of the owners.

You can readily see differences between the Reserve and other subdivisions within the Bozeman area. Most apparently, no homes are located on ridge-lines -- home sites are tucked down, sheltered by ridges or forest, providing privacy and scenic enhancement. Equally importantly, the residents of Eagle Rock Reserve maintain a balance between protection of the area's open spaces and wildlife habitat, Montana's agricultural heritage, and private home ownership. Those physical and philosophical differences exist by design and choice, and the Reserve's owners cooperate to support these goals in their decisions about their own properties and the common property in the Reserve.

Located only 5 miles southeast of Bozeman at the edge of Mt. Ellis, the 774 acre Reserve borders on the north edge of the greater Yellowstone wilderness. From its back gate, the high peaks of the Gallatin Range shoulder their way south into Yellowstone National Park, uncrossed by roads for 66 miles. Recreation opportunities in and around the Reserve are abundant. Yellowstone National Park, three major ski area, Bridger Bowl, Big Sky and Moonlight Basin, a dozen or more blue ribbon trout streams, endless picnic sites and forest trails for hiking, skiing and horseback riding can be daily adventures from the Reserve.

Supporting flora and fauna typical of the inter-mountain grasslands and forests, an average rainfall of more than 24 inches keeps the Reserve's meadows green throughout the summer. Wildlife abounds, and much of the 600 acres of the common lands of the Reserve serves to protect wildlife habitat, including the historic winter range and calving grounds of the Mount Ellis elk herd.

In a small way, that is what Eagle Rock Reserve is about...in both allure and reason. For by design, Eagle Rock Reserve acts as a buffer between the growing urban area of Bozeman and the Greater Yellowstone Wilderness. Its purpose is, in many ways, similar to and supportive of the goals of the Greater Yellowstone Coalition, the Montana Land Reliance, and the Nature Conservancy, as well as the everyday practice of many present ranchers and land holders in Montana who provide private stewardship for natural areas.

The Reserve's covenants and design review guidelines have been carefully drawn not only to preserve the value of each owner's investment but also to fully protect the peaceful environment  of of the Reserve's forest, grasslands and wildlife habitat. The Eagle Rock Reserve Owners Association assures that the covenants are respected and that the roads, land, forest and streams are well maintained and managed. The single-entry road system, front gatehouse and on-site manager assist with security and maintenance.

Bozeman, the home of the Montana State University, offers numerous commercial, educational, recreational and cultural activities including the arts, music and sports events, fairs, golf courses, fine medical services and a wide variety of dining and shopping opportunities.

As the major air gateway to Yellowstone National Park, Bozeman has an excellent airport only 25 minutes from the Reserve, with dozens of departures a day.

Suitable for a year-round home, family vacation retreat, or active retirement base, the Reserve has been designated for people who want to enjoy the spectacular scenery and lifestyle of the West in quiet harmony with nature, close to wilderness and outdoor recreation, but also with easy access to town and good air transportation. It is a combination rarely ever achieved or protected as it is in the Reserve.

Eagle Rock Reserve Owner's Association:
http://erroa.org/index.html

Bill Ogden, the founder of Eagle Rock Reserve:


To learn more about Eagle Rock Reserve, or to view a lot for sale:
http://www.prumt.com/property/details/Land-Lots/188627/Tract-31-Star-Ridge-Road-Bozeman-Montana-59715

 

Tripp Emerling
Sales Associate, CSO
Prudential Montana Real Estate
406-579-6978
tripp.emerling@prumt.com

Confident Home Buying: Is This the House for Me?

Buying a house is likely the single largest investment you'll make and, like a good marriage, if it's the right one, it may last a lifetime. But how can you be confident in your home buying, especially if you're a first-time buyer? With so many homes to choose from, how do you know if this house is the one?

Sounds like a dating question. And, coincidentally, using some of the same techniques used to determine if you're marrying the right person may also help you decide which home is the best for your needs. These days more buyers are coupling up–-buying homes together (even if they're not in a relationship) to offset the cost and be able to afford more.

You've heard of buyers' remorse and you know you sure don't want it. Sometimes fearing buyers' remorse can actually lead to buyers' inactivity. They become afraid and so they do nothing. They shop, they see, they even put offers in but in the end, they don't close. If you're a serious buyer, you don't want to get stuck in a cycle of looking and never owning.

So, how can you be confident that the home you're buying will meet your needs? Start with some basic guidelines. Make a list of your must-haves, needs, and wants. These are truly three different categories. Yes, some things you list may overlap but after your list is started, you'll begin to see what really matters to you. Sometimes buyers will be shopping for a home with a pool, but when they finally make a list they realize that money is very tight and the added cost of heating a pool will be too much of a drain. So they revise their home-buying desires and start house-hunting all over again. It would've been far more effective to have considered this from the start.

Next, study the home or apartment that you're currently living in. What are the positive aspects of it? Are there things about the place you live in now that you absolutely can't stand? Taking stock of what is working and what isn't in your current home provides a good blueprint for the things you should consider when searching for your next home. Remember to be honest. Sometimes we tend to forget the bad things about a home due to its sentimental value. If you look at your current home with a critical eye, you'll know which areas caused a big headache and then you can be sure you don't buy another with the same problem.

For instance, maybe the home needs a lot of fixing up and you and your spouse barely survived the remodel without tearing each other apart. You might then want to search for homes in much better condition to limit the fixing up. Our minds have a wonderful way of forgetting the bad, once the bad is over. But, trust me, you'll remember once you're back in the same scenario again.

Do your homework and get everyone's feedback. Unless you're buying a home alone, you should spend time meeting with those who will be living in the home to discuss what's important. Sounds obvious...yes, but guess what? A lot of times Buyer One and Buyer Two don't even talk about what's really important to each other until they start searching for homes. Then they realize how truly different their views and expectations are and see the necessity to compromise a little. Time is better spent reviewing and discussing first. That way, an agent can make sure the properties being shown are in line with everyone's desires.

Finally, plan ahead. Especially if you're moving a family or you're moving in with someone else. Use a synchronized calendar, like Google, to help map out all the meetings and showings. There will be lots of important meetings to attend and if you can't get the necessary buyers there, the process will be stalled. Without the necessary buyers present, you can't be confident the home will satisfy. Plan. Schedule. Commit. This will assure that the home-buying process will be a success.

August 17, 2012 -- Realty Times Feature Article by Phoebe Chongchua

Home Improvements That Sell

In a mash-up survey of 450 real estate agents and 1,660 homeowners, homeowners get it - most of the time - when it comes to home improvements that help induce sales and higher prices.

Realtor.com's home improvement survey, conducted online from June 6 to June 13, 2012, tapped agents and Realtor.com users who are homeowners planning to improve their home before putting it on the market.

Given today's home buyers are aware of soft market conditions that can put a drag on values, they want a home that's ready to appreciate and that's a home in the best shape possible. Nearly 90 percent of real estate agents believe home improvements can help a home sell faster, and nearly 73 percent say home work can boost the price, provided the home improvements are the right home improvements.

Nearly three in four (71.4 percent) real estate agents say sellers too often underestimate the power of simple home improvements - repairs, painting and cosmetic upgrades. Not so, say more than one in four (75.21 percent) of homeowners polled. They most certainly plan to repair broken household items before listing their home for sale.

Also, 65.9 percent of real estate agents said another common mistake among homeowners is not making "the right" home improvements for the local market. Like upgrades from home to home help pull up values overall.

Agents, 62 percent of them, also said too many homeowners make specialty improvements based on their own tastes rather than what might appeal to a buyer.

 Recommended home improvements 

 The most common home improvements recommended by real estate agents included:

• The vast majority, 96.5 percent, of real estate professionals surveyed recommend sellers repair household items that are broken before putting a home on the market.
• More than half, 63.8 percent, of real estate agents recommend sellers make kitchen improvements.
• Most, 59.3 percent, of real estate professionals recommend sellers make bathroom improvements. What sellers improve Are sellers complying with real estate agents' recommended home improvements? Again, for the most part, yes.

The most common improvements made by home sellers:

• A majority, 75.21 percent, of sellers planning renovations will repair broken household items before selling their home.
• Most, 53.43 percent, of owners plan to add new flooring before selling their home.
• Also most, 53.37 percent, of sellers plan bathroom improvements before selling their home. Homeowners appear to have dropped the ball on kitchen work, but they aren't pinching pennies when it comes to home improvements that sell. Home improvement budgets were $2,001 to $5,000 for 24.1 percent of home sellers planning improvements; $5,001 to $10,000 for 22.23 percent and $10,001 to $20,000 for 16.63 percent.

August 16, 2012 -- Realty Times Feature Article by Broderick Perkins

Living Modern in Montana ~ 112 Cobble Creek Road, Bozeman MT

Stephen Dynia's contemporary design ~ 112 Cobble Creek Road, Bozeman, MT

 
The highest standards of architect Stephen Dynia’s contemporary design approach have been applied to this sleek, clean-lined home. Situated on nearly 17 acres, just minutes from historic downtown Bozeman, this masterpiece embodies the very best of innovation, embracing a truly unique landscape.  The home's architecture creates fluidity and a sense of harmony between nature and structure.  Every aspect of the materials and design is integrated to provide sustainability in a dramatic setting.

Nestled in the fields south of Bozeman, Montana off Sourdough Road.

Situated on nearly 17+/- acres, just minutes from historic downtown Bozeman

For more information: http://www.finehomesmt.com/cobblecreek

During the day, the home is passive solar, with sunlight heating, shaping and articulating the living spaces. The expansive south-facing glass wall affords unobstructed views of the Gallatin and Spanish Peaks Mountains.  At night, the expansive wall of glass ties the southern starlit sky into the living area. Glass doorways open onto a 1,400 square foot Tiger Wood deck and adjacent 400 square foot patio dining area, providing for seamless indoor/outdoor living.

Unobstructed views of the Gallatin and Spanish Peaks Mountains

General Resident Features:

•     Designed by Stephen Dynia Architects, winner of several AIA awards
•     Extensive use of passive solar (heating is not needed on most winter days)
•     Rough sawn beams and walnut flooring throughout the main living area
•     Two limestone fireplaces situated at either end of the living space
•     Crestron Adagio Distributed Audio System featuring six independent zones and six audio sources
•     Home Theater System featuring full Dolby 7.1 Surround Sound, B&K Home Theater System,   Sony HD
•     1080p Cinema Projector, 85" Wide - Automatic Drop-Down Projection Screen and a wet bar/morning kitchen with a U-Line Beverage Cooler

Home Theater System featuring full Dolby 7.1 Surround Sound

•     Four 1080p Flat Screen HDTVs with hidden components in Master Bedroom, Kitchen, Guest Room and Studio Apartment
•     383 Bottle Wine Room
•     Large irrigated garden and adjacent chicken coop (non-permanent structure on concrete patio which can easily be removed and transformed into a garden patio dining area)

Gourmet Kitchen:

•     Two Freestanding Islands one with counter seating and one with bar-height seating
•     Teak Cabinetry and Cambria Countertops throughout
•     Two Dishwashers - Miele and Fisher Paykel
•     Commercial-Grade 5-Burner DCS Range/Oven
•     Three Blanco SteelArt Designer Sinks
•     Reverse Osmosis Water Filtering System
•     Two InSinkErator Garbage Disposals

Gourmet Kitchen with two freestanding islands and three Blanco SteelArt Designer Sinks

Designer Finishes:

•     Louis Poulsen Artichoke Chandelier
•     Dining Room Features a Louis Poulsen Artichoke Chandelier. Designed by Poul Henningson in 1958, the PH Artichoke is considered a classical masterpiece. The original PH Artichokes were created for the Langelinie Pavilion Restaurant, where they still hang today.

View of the dining room looking south east towards Triple Tree and the Hyalite Mountains.

Louis Poulsen Artichoke Chandelier

•     Dornbracht Kitchen and Bathroom Fixtures throughout the residence. All fittings and accessories that bear the name Dornbracht are of the highest quality, possess pioneering design and place a clear and unmistakable emphasis on function.
•     Duravit Toilets in Powder Rooms and Master Bath, designed by Philippe Starck.
•     Powder Room Sinks feature cutting-edge contemporary design, manufactured in France by Julien.
•     All Baths include Zuma Collection Contemporary Soaker Tubs
•     Oceanside Handcrafted Glass Tile installed in Master Bath. Villi Glass Mosaic Tile installed in other baths creating a unique brilliance using the interplay of light and color.

Oceanside Handcrafted Glass Tile installed in Master Bath

•     Robern Cabinets in Master Bath provide minimalist design blends with modern, innovative technology.
•     Architectural Door Hardware by Omnia
•     Oceanside Handcrafted Glass Tile
•     Master Bathroom

For more information: http://www.finehomesmt.com/cobblecreek

For more information or to schedule a showing, please contact:

Carol Lister

Broker, CRS, GRI, ABR

Prudential Montana Real Estate

2001 Stadium Drive, Ste. A

Bozeman, MT

59715

carol.lister@prumt.com

406-581-9376

http://www.carollister.com

Carol Lister, Broker, CRS, GRI, ABR - Prudential Montana Real Estate

Lake Davis, Sales Associate - Prudential Montana Real Estate

or

Lake Davis

Sales Associate

Prudential Montana Real Estate

1925 N 22nd Avenue, Suite 201

Bozeman, MT

59178

lake.davis@prumt.com

406-539-1519
http://PruMT.com

Sellers Getting Comfortable With Today's Housing Prices?

The wealthy may soon be feeling the pinch as the luxury housing market takes a hit. According to RealtyTrac, homes listed for over $1 million have dropped 20 percent in 2012. That means the average sales price for expensive real estate homes has gone from $2.5 million, last year, to just above $2 million. Some higher-priced luxury homes are even lopping off several millions of dollars in hopes of finding buyers. 
 
Interestingly, after many years of waiting and hoping, the more vast real estate market is experiencing some price stabilization and possibly even seeing prices rise a bit. Some say that's because sellers are getting comfortable with the lower sales price. 
 
However, other experts argue that the increase is more likely seasonal rather than a true sign that the market has completely bottomed out. Part of the reason for the skepticism, industry economic experts say, is because there is a large looming mass of homes either nearing a foreclosure or already in progress. As those foreclosed homes quickly and massively come into the marketplace, it's likely prices would drop. 
 
But in the last couple of months, the press has reported on housing inventory dropping in some markets and competitive pricing is most evident in the markets that suffered greatly from foreclosures such as Phoenix, Miami, and parts of Southern California. Markets like Phoenix and San Francisco are seeing some speculative purchasing and that is raising concerns about possible market bubbles. 
 
If you're selling your home now should you be concerned? Not if you're taking the right precautions and hiring the most experienced industry professionals to assist you. Understanding the pros and cons of a particular market is vital.
According to the National Association of Realtors, nationally, first-time buyers made up only 35 percent of existing single-family home sales during the month of April. That compares to 40 to 45 percent of the market in better times. 
 
Statistics like that matter because they point to economic barriers that could keep your home on the market longer than you desire. It's, of course, the tight credit lending restrictions, high unemployment rate, and overall unstable economy that are, in some cases, shutting out first-time buyers. 
 
But the flip side is that continuing low interest rates are still drawing wannabe homeowners out to search for their perfect house which has likely dropped a good 35 percent from what it was during the housing peak. 
 
Another factor contributing to the overall real estate market is that it's an election year. Due to uncertainty, some predict that buyers may be inclined to purchase before the end of the year. Others fear that, depending on the outcome of the election, some of the tax cuts currently in place will expire. 
 
Also, your pricing could be affected depending on the style of home you're selling. The number of buyers interested in the senior housing market is increasing. Lots of Boomers are aging and they have many ailments. Apartment living lacks the privacy they desire but often single family homes aren't suitable. So housing that features senior-friendly accommodations like a master suite on the first floor tend to be in demand. If you have a home that is designed to allow buyers to age in place, it's a good idea to market it that way. 
 
Remember when selling your home, follow a few simple rules. Study the market. Get expert advice. Know your target audience. Highlight the most desirable aspects of your home and, be realistic with your listing price. 

August 10, 2012 -- Realty Times Feature Article by Phoebe Chongchua 

Record Low Mortgage Rates Helping to Stir the Housing Market

In Freddie Mac's results of its Primary Mortgage Market Survey®, the average 30-year and 15-year fixed-rate mortgage hitting new all-time record lows along with the 5-year ARM. The average 30-year fixed has been below 4.00 percent all but one week in 2012. The average 15-year fixed-rate mortgage has been below 3.00 percent for 8 consecutive weeks.
Freddie Mac's Chief Economist highlights how these record low mortgage rates are fueling housing demand in its July U.S. Economic and Housing Market Outlook. 
 

30-year fixed-rate mortgage (FRM) averaged 3.53 percent with an average 0.7 point for the week ending July 19, 2012, down from last week when it averaged 3.56 percent. Last year at this time, the 30-year FRM averaged 4.52 percent.  15-year FRM this week averaged 2.83 percent with an average 0.6 point, down from last week when it averaged 2.86 percent. A year ago at this time, the 15-year FRM averaged 3.66 percent.  5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.69 percent this week, with an average 0.6 point, down from last week when it averaged 2.74 percent. A year ago, the 5-year ARM averaged 3.27 percent. 1-year Treasury-indexed ARM averaged 2.69 percent this week with an average 0.4 point, the same as last week. At this time last year, the 1-year ARM averaged 2.97 percent.     According to to Frank Nothaft, vice president and chief economist, Freddie Mac:    "With little signs of inflation and the Federal Reserve's "Operation Twist" keeping U.S. Treasury bond yields in check, fixed mortgage rates are remaining low and helping to stir the housing market. For instance, the 12-month growth rate in the core Consumer Price Index has been in a narrow 2.1 to 2.3 percent band over the past nine months ending in June. Meanwhile, new construction on one-family homes rose for the fourth consecutive month in June to its strongest pace since April 2010 with builders restocking their lean inventories of new homes.  In fact, homebuilder confidence for the next six months rose for the third month in a row in July to its highest reading since March 2007."  July 20, 2012 -- Realty Times Feature Article