Bozeman Montana Real Estate Information Archive


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Broken Appraisal System: Real Estate Market Flaws

by Tim Hart
The Home Value Code of Conduct (HVCC) was enacted in 2009 and has been influencing the real estate world since. Appraisals are uniquely integrated with real estate in that they are a separate unit/profession, but they impact real estate transactions intimately. 

How the appraisal system works:

When a lender needs to call upon an appraiser, he/she submits their request to the AMC, Appraisal Management Company. The AMC then finds an appraiser for the job. So what does this system allow to happen within the real estate market? The appraiser assigned is not picked by merit, accuracy, work ability, or anything like that. They are simply the next in line. As Realtor’s we can get mad and fight our way through the system of business we belong to, but we cannot let our clients see this. Instead, know that when it comes to appraisals, there are many factors that are out of your hands. Focus on what you can take care of and do that to the best of your abilities.

Here are some tips to give your client:

  • Clean Up: Overgrown landscaping, soiled carpet, and other bigger-than-day-to-day messes may damage the appraisal. Keep the pets out of the way of the appraiser, trim your trees, and showcase the home you have!
  • Up-Date: Sketching a plan of the house with sqft helps the appraiser get a feel of the space and if on that paper you attach a list of all the updating you have done on the home, even the little things count. Re-sealed a bathtub…ect
  • Comps: Have some comps on hand. Being aware of nearby comparables allows you to know about where the appraisal should end up.
  • $500 Rule: Appraisers work in $500 increments so if there is a repair from more than that amount; it will count against the property. MORE



Credit Unions Increasing Role In Real Estate

by Tim Hart

Borrowers who are looking to refinance are shifting more and more to credit unions instead of banks. This is a result of many colliding events notably an overall disillusionment of the work, honesty, and values of the big banks.

“We’d be remiss if we didn’t give a shout-out to the major banks for being annoying to consumers and forcing people to seek out other alternatives,” says Bob Dorsa, the president of the American Credit Union Mortgage Association in Las Vegas. 

Credit Unions are seeing this national trend and working fervently to foster an atmosphere that keeps the customers rolling in. They are becoming as competitive as they can in regard to rates. In addition, credit unions tend to offer lower closing rates than most big banks, and by keeping their services in-house, credit unions are able to be more response and prompt in their service.

This is a strong trend, but the longevity of it is in question. “Historically, when rates go up and refi goes down, our share and origination volume drops,” Dorsa, he president of the American Credit Union Mortgage Association in Las Vegas, says. “We’ve made a concerted effort this time to get out in front of REALTORS®, so we hope we won’t take as much of a hit production-wise as we have in the past.”

Source: “The Credit Union Alternative,” The New York Times (Dec. 13, 2012)

Read More

REALTOR® Credit Union Merger Provides Greater Services for Members

  1. Florida: 1 in every 304 homes received a foreclosure filing in November
  2. Nevada: 1 in every 390 homes
  3. Illinois: 1 in every 392 homes
  4. California: 1 in every 430 homes
  5. South Carolina: 1 in every 455 homes
  6. Ohio: 1 in every 458 homes
  7. Arizona: 1 in every 468 homes
  8. Georgia: 1 in every 494 homes
  9. Michigan: 1 in every 621 homes
  10. Indiana: 1 in every 684 homes

Source: RealtyTrac

With that list, I would also like to add some positive news. Foreclosure starts fell to a new –year low. They have dropped 28% from only a year ago.

The latest data offers “more evidence that we are past the worst of the foreclosure problem brought about by the housing bubble bursting six years ago,” says Daren Blomquist, vice president at RealtyTrac. “But foreclosures are continuing to hobble the U.S. housing market as lenders finally seize properties that started the process a year or two ago — and much longer in some cases. We’re likely not completely out of the woods when it comes to foreclosure starts, either, as lenders are still adjusting to new foreclosure ground rules set forth in the National Mortgage Settlement along with various state laws and court rulings.”

So here is another list--the greatest drops in foreclosures:

  1. Oregon: dropped 84%
  2. Pennsylvania: dropped 67%
  3. California: dropped 63%
  4. Arizona: dropped 59%
  5. Georgia: dropped 51%




Lumber Prices and Real Estate

by Tim Hart
New construction is a surging trend here in Bozeman. With this surge, there is a sharp rise in the cost of lumber. Analysts are watching this commodity in order to try and predict if this sharp spike will hinder the recovering housing market. 

Housing Recovery:

For the past six months, the US housing market has seen a steady and consistent strengthening (based on data from S&P/Case-Shiller home price index). This recovery is still fragile. The industry’s profit margins are still relatively low averaging a mere .03% net margin on average. There is still a long way to go before the market can handle the volatility of the commodity markets that support it. New home building demand is rising putting pressure on the chain that supplies it: raw materials, labor, time, and equipment.

A few experts weigh in:

"A lot of it has to do with the wood as a commodity itself and the inability to differentiate," Granado,analyst with financial analysis firm Sageworks, says.

"This is an industry that has been in need of a price increase for a very long time. Excess capacity and competitive pressure Asia has made this difficult," said Dan Natkin, director of Mannington Mills' hardwood and laminate business. "We have reached a breaking point where we have to raise prices."




Displaying blog entries 1-4 of 4