Community News

Buying your first home can be puzzling. Robyn Erlenbush explains how to put the pieces together so you are prepared to snag the ideal home in the Bozeman Daily Chronicle article "Mission Possible: Buying a first home" posted Sunday, March 16, 2014, by Jason Bacaj.

The real estate market in the Gallatin Valley has rebounded with vigor since its precipitous fall during the Great Recession.

A good deal of the action is for homes priced at $300,000 and less, a section generally considered “entry-level” housing. Houses in that segment of the market are likely to sell within 48 hours of listing, usually after multiple offers are made, said Robyn Erlenbush, broker-owner of ERA Landmark Real Estate.

Still, Erlenbush believes the time is ripe for first-time homebuyers. Prices and interest rates are relatively low, and she said the market is only going to get tighter from here.

“If one has stability in their income (and) they know they will be in Bozeman for two to three years, there is no compelling reason to wait,” she said.

Yet a house is likely the most expensive thing a person will ever buy, and that makes the prospect of diving into an aggressive marketplace all the more intimidating. Here are a few pointers on preparing yourself to move fast enough to snag that ideal home.

Find a lender. This can be as simple as working with your current bank or credit union. But you should ask friends, family, and coworkers for recommendations, said Kaycee Morgen, a mortgage lender with First Interstate Bank.

Once you put together a list of potential lenders, Morgen recommends interviewing them and finding one you feel comfortable with.

“It's a big decision. You don't want to be working with a lender or Realtor you don't like or don't trust,” Morgen said.

She recommends asking for a mortgage worksheet. It breaks down fees and charges and shows the interest rate, allowing you to compare costs among lenders. Also, it's important to ask the lender to make sure each worksheet provides an “apples-to-apples” comparison.

Get pre-qualified for a mortgage. This is a key step because it gives you a price range when looking for a house, and it allows you to move faster toward closing once you decide on a place.

A trusted lender comes into play here because mortgages are based on your total income — not how much you take home after taxes and other scheduled payments.

Morgen recommends working backward to determine how much you want to pay each month. Get a ballpark figure and then factor in how much you spend on groceries, gas, and entertainment each month to make sure that the initial mortgage figure is affordable and doesn't leave your house poor.

“The borrower needs to be very comfortable knowing what they want to pay,” she said.

Once you have that down, sit down with your lender to get into the nitty-gritty of what sort of financing you'll use. There are several routes you can choose from: a Federal Housing Administration loan, a VA Home Loan, or conventional financing.

Pick a real estate agent. This step is similar to finding a lender. Erlenbush suggests searching online for the type of real estate you're interested in and looking for the agents who represent those types of properties.

After that initial bit of fact-finding, ask friends, family, and coworkers for recommendations or feedback about the different agents, she said. For a final bit of vetting, you can ask the agent to let you contact someone who purchased a home through him or her to find out how the process went.

Erlenbush stressed the importance of finding someone who'll represent your best interests rather than someone who will simply show you homes.

“It's scary no matter when you do it. It's scary even if you've done it 10 times,” she said. “If you don't have an advocate anticipating what you need to do next it can turn into a very unpleasant situation and it shouldn't be.”

Once you have an agent you're comfortable with, ask to see the paperwork you'll have to go through once you find a home. It reduces the “shell-shock” of all the paper, Erlenbush said, and knowing the next step lets you move faster once you enter into a buy-sell agreement — something necessary in a market that moves as fast as Bozeman's does.

“(Buyers) have to be as savvy and prepared as possible,” Erlenbush said.

Read the rest of the article here.