Looking for what steps you need to take in order to prepare to buy a house? If you’re looking to put your rental days behind you and move into a home you can finally call your own. Now’s the time to start planning. Even if you don’t think that you’ll be ready in six months or a year from now, there are things you can do to prepare yourself and your family. Crossing the following items off your list will make the home-buying process a little bit easier. Read on for a couple of tips you can get started on right away.
Prepare To Buy A House With These Tips
Getting ready to buy your first house can feel a little bit overwhelming. From credit scores to down payments, mortgages, and more, there is a lot to process. So here’s a brief guide to help you get ready to make one of the most significant purchases of your life. Prepare to buy a house with these easy tips.
Check Your Credit & Start Saving
A good credit score is one of the first things mortgage lenders look for when you’re considering buying a home. It proves that you’ve got a good track record at paying off past debts like student loans and credit card bills. The higher your credit score, the easier it is to qualify for lower interest rates and help make your home more affordable.
Several credit reporting agencies are available online, and many of them will keep you a free copy from all three credit reporting bureaus: TransUnion, Equifax, and Experian. Many of these sites will also give you ways to help you improve your credit and give you an overview of why you have the score you have.
Having cash reserves is also essential for buying a home, as you need to prove to a lender that you can afford housing payments, even payments that might be higher than your current rental rates. This means that you should start saving now! In addition, you’ll need to prepare for a down payment, inspections fees, and maybe more.
Get Your Documents In Order & Talk To A Mortgage Lender
If you’re close to putting an offer on a house, you’ll want to start collecting documents that verify your finances. This includes paystubs, W-2’s, bank statements, and even copies of tax returns. Too often, homebuyers don’t consider mortgage shopping until it’s too late, and someone else buys their dream home who had their finances in better order. A mortgage pre-qualification and mortgage pre-approval can help you with the buying process. Though these two steps sound very similar, they are, in fact, quite different.
A pre-qualification is a preliminary step in providing the mortgage lender with just some basic information about your finances online. Though it isn’t verified, it can be used to determine whether you might qualify for financing. On the other hand, a pre-approval involves submitting an actual mortgage application and providing your lender with supporting documentation. This usually includes tax returns, paycheck stubs, financial statements, a credit check, and more.
Getting pre-approved is the most crucial step before even starting before house-hunting. Some Realtors and sellers will only work with pre-approved buyers.
Mortgage lenders will review all of your information and determine how much you can afford to spend on a property. Though a pre-approval doesn’t 100% guarantee financing, it does go a long way to making it happen. A pre-approval tells you what you will be able to afford before searching for a home – which makes it a significant step.
Find A Real Estate Agent
Though buying a home can be complicated and even intimidating, it gets much easier when you have a professional on your side to answer questions and look out for your best interests. A buyer’s agent can help you find the right house, give you negotiation advice, and get you a reasonable price for your future home.
Don’t rely on the seller’s agent to provide advice and guidance, as it’s their job to help the seller, not the buyer. Though we’d love for you to consider our team at 41 Realty Group, you should always get recommendations from your friends and family. In addition, read online reviews, talk to a few agents, and get advice from other people who have bought a home recently before making a final decision.
Make Sure You Have Earnest Money Ready To Go
As we mentioned before, it’s good to have cash reserves on hand when trying to prepare to buy a house. Once you find that perfect property, you’ll be required to submit an earnest money check with your offer. Earnest money is basically good faith money that says, “I’m a serious buyer.”
Though the actual amounts vary from house to house, they typically range from 1% to 2% of the purchase price – usually a minimum of $1,000. Of course, the seller doesn’t get this money; to be clear, funds are held in an escrow account and are either returned to you at closing or applied to either closing costs and/or your down payment.
Final Thoughts To Prepare To Buy A House
We know that buying a house is a huge decision. But, even in this market, where it feels like there aren’t a lot of homes on the market, you shouldn’t rush. Don’t act too quickly or skip vital steps like a home inspection or getting preapproved. At 41 Realty Group, we want you to find the home of your dream at the price you can afford. So let us help you prepare to buy a house and get all of your real estate questions answered. We’ll help you find the right mortgage lender, help you with the paperwork, and of course, walk you through every step of the process. Get in touch with us here.
One of our favorite places in Billings, Montana, is Harper & Madison. Nicole King, owner and broker of 41 Realty Group interviews the owner of Harper & Madison to learn a little bit more about the history of this incredible coffee shop and bakery.
Read on for the full transcript of the video.
Harper & Madison – An Inside Look At The Restaurant We Love In Billings, MT
Nicole: Hey there I’m Nicole King I’m the broker-owner of 41 Realty Group in Billings, Montana and today we get to sit down with Joanie. Joanie owns Harper and Madison, you’ve probably driven by it plenty of times when you’ve headed either away from the hospitals toward Pioneer Park or the opposite direction. They’re on 10th Avenue North, you can’t miss them – they are the cutest little shop and when you come in you can see that this is just the most welcoming and wonderful space.
so Joanie thank you so much for sitting down with me today. Tell us how you came to be, how did you get to be in this location, how’d you name your restaurant – anything you think we should know.
Joanie: The story, okay, this is actually my third business and it’s my favorite by far. I started this business 10 years ago.
Joanie: Thanks, and originally it was going to be out on the west end on Zimmerman. I had actually signed a lease there, but it wasn’t feeling right so I was searching for a different location that felt right and I never drive down 10th avenue but for some reason, that day I was driving down 10th avenue and I saw a big for sale sign in the window of this building and I screeched to a halt. I really didn’t even close my door I ran from my car and looked in the window and I said that’s it. I knew that i wanted to have a place that was unique in Billings and not about volume and crazy busy. I wanted a place where I could build community and this seemed like exactly the right location for that and it has been.
Nicole: Yeah for sure. Great job. I think building community is exactly what you do.
Joanie: Thanks, thanks.
Nicole: And so then you set about naming it and figuring out what it looks like.
Joanie: Right originally I had planned on just opening a bakery and it accidentally turned itself into a restaurant within a few days, you know. I had five sandwiches on the menu just in case someone would like to come in from the hospital or the clinic and and grab lunch but uh like i said within three days it was clear that I had accidentally opened a restaurant so we went with that and it’s been that for the last 10 years, up until recently.
Joanie: The name comes from my kids my daughter is Harper and my son is Madison and they have literally worked with me since they were toddlers my son used to call us “Team Cake.”
Nicole: Oh my gosh, that is the cutest. I love it.
Joanie: So it felt good and uh and it makes me just – I feel like I have them here with me even though they’re far away now.
Nicole: Sure, yeah. so originally when you opened you had really long hours, a huge menu, and then recently kind of revaluated as everything shut down, did some remodeling – tell me about that process.
Joanie: We did we’ve, we’ve gone through a couple of transitions. This last time was definitely COVID-related when we had to restrict our seating, it was no longer feasible to support a staff of 12, even doing takeout. And besides, that isn’t what we’re here for. We’re not here to become a fast-food restaurant.
It really is a place for people to come and sit and be loved through food. So I made the decision to downsize. The sad part was letting some of my staff go because they were all wonderful. We went from a staff of 12 to a staff of five and decided to become a patisserie. So we sell European style desserts and a few breakfast items but we no longer do food to order, so it’s not that fast-paced busy crazy restaurant.
It’s more like the original vision that I had for it which is sweet so I guess if anything good came out of COVID it led me to where it is now.
Nicole: Oh that’s beautiful beautiful story and your food is beautiful.
Nicole: What’s in those cabinets and what comes out on the plates is just gorgeous. You can tell so much love has gone into it so much thought about the ingredients and the presentation, everything.
I saw a picture of a sandwich from your brother the other day.
Nicole: It’s got this great bow on it and everything oh my gosh, it’s wonderful.
Joanie: We have a motto here and that is yeah, it all matters.
Nicole: Yeah, it feels like it for sure. So what are your hours?
Joanie: We’re open Tuesday through Saturday from seven to one.
Joanie: We do have seating and so you can come in and enjoy one of our breakfast items or a pastry or a dessert, a great cup of coffee, and just relax and and be loved on.
Nicole: Yeah, yeah, wow that is amazing. The another thing that you’re doing is that we’ve partnered with you for the benefit of veterans. So your family has a long history of military service, thank you to your entire family for everything. Both to those who have served to sacrifice but then also all the sacrifice of, you know, family members.
Joanie: Yeah, yeah, I have many men in my family who have served in the military and you know they have shared with me what that was like. It’s a sacrifice that I can’t imagine making so that when you approached me about partnering, I was more than happy to say yes to that.
Nicole: Oh well, we really appreciate it so anybody can come down here, order a cup of coffee, and five cents for every cup sold this year is going to go directly to the help of veterans.
Joanie: So we need to sell a lot of coffee.
Nicole: Yeah, yeah, come down get some coffee, enjoy everything else that’s on their menu. Be loved on through food as Joanie says. Come down to harper madison and experience it for yourself.
Real estate investing has proven to be one of the main ways to build wealth for a long time. Real estate is never a bad investment, as it can be a viable way to build monthly cash flow, help you retire more easily, and help you reach your financial goals.
However, successfully investing in real estate can be difficult in today’s competitive market. Deals are becoming more and more complex, and even one mistake can cost investors a lot of money. So save yourself a lot of time, frustration, and money by reading some of our real estate investing tips (and mistakes to avoid) and getting in touch with one of our agents today!
The Best Real Estate Investing Tips For Those Just Getting Started
In this article, we’ll give you a basic overview of things to consider if you want to start investing in real estate. Then, hopefully, you’ll discover some actionable real estate investing tips to help you know where to look, the types of real estate to buy, and more!
Define Your Real Estate Investment Goals
The first real estate investing tip we have for you is to clarify your individual investment goals. When it comes to making investment decisions, you’ll want to determine a clear strategy to reach those goals. Know where you want to go and how you plan to get there – before you spend all of your hard-earned savings on real estate.
There are so many factors and variables in real estate investing, so it’s essential to do some market research and talk to experts to help you formulate a personal real estate investment strategy. For example, what type of real estate are you planning on investing in? Residential, commercial, land, or particular use?
Plus, there are several strategies you might consider – core, value-add, and opportunistic. While one person might thrive on opportunistic fix-and-flip properties, others find that core buy-and-hold longer-term investments suit them better.
First-time investors should do some research, talk to agents in their market, and pick a strategy they think will work best for them and their personal goals. Stick to your goals and fine-tune your investment strategy along the way.
Order Inspections and Appraisals Before Buying
One of the most important real estate investing tips we give first-time investors is to always always always get an inspection before buying. Home inspections will show you all the “red flags” that might be a part of the property. These issues are good to know early so that you can plan for repairs and renovations and adjust your budget accordingly. In addition, inspections will show you the difference between a sound investment and a high-risk investment.
Additionally, property appraisals are beneficial because they give you an analysis of the past, current, and predicted future value of the investment property. Don’t take a chance on guessing what the property is worth; get a professional opinion! Appraisers will also give you a reasonable estimate of what you can likely charge in monthly rent once you’ve fixed up the property.
Join a local networking group
There are thousands of real estate investing groups across the country. Consider joining a couple and participating in local groups too! Joining groups will help you meet people to help you and introduce you to new topics and processes you might not have been exposed to before.
Joining these groups can provide opportunities for education, mentorship, new deals, and so much more. Plus, many of these groups have local businesses you can support, and who doesn’t want to give back to the community?
Don’t Go Overboard With Renovations
Especially with fix and flip properties, don’t go crazy with renovations. You don’t have to blow your whole budget making your investment property look like it’s out of a home improvement magazine, especially when it comes to accents and fixtures.
You want it to look modern and clean, but you don’t have to go overboard. If you’re selling, the buyers will want to put their own flair on the home, and renters won’t want to pay more monthly just because you went a little overboard with the renovation budget.
Pair Up With Experts
We’ve mentioned it before, but investing in real estate has a lot of moving pieces. So it’s critical that when you first start out, you partner up with experts in each area of the process. Having people who have done what you’re trying to do will help you minimize mistakes.
One thing you should do is align yourself with a real estate agent you trust, as they have access to tools and resources that could be beneficial to you. Plus, many real estate agents are investors themselves, and they can give you more tips and help you avoid mistakes. Don’t reinvent the wheel when others have already paved the way with proven processes that work.
Pros of Real Estate Investing
Now that you’ve got a few real estate investing tips to consider let’s discuss some of the appeal of real estate. First, it’s much less risky than investing in the stock market. Though you might not have the same earning potential, you can pretty much count on making a return when it comes to real estate.
One main pro of investing in real estate is the steady cash flow. When you have enough rental properties and trustworthy tenants, this becomes a stable revenue stream for your business. Owning real estate also comes with tax breaks – you can deduct all sorts of expenses from your taxes. These include mortgage interest, depreciation, property tax, and more.
Lastly, long-term returns are often properties, because over time, most properties increase in value.
Cons of Real Estate Investing
As with every potential investment, there are some risks to consider. For example, potential returns aren’t as high as the stock market, and the time it takes for you to see that return could be a lot longer. Also, unlike stocks, you can’t turn a property into cash quickly, as they aren’t liquid investments.
Additionally, real estate investing can be pretty cash-heavy. Especially if you’re looking to create a steady stream of income, you’ll likely need cash on hand to get started. Whether’s you’ve saved the money or acquired a loan, you’ll need to be able to pay for building improvements, maintenance, and more.
Managing tenants and taking care of maintenance can be a challenge too. Whether you hire a property manager or try to manage it yourself, there can be many unexpected problems that come up. Though it can be really rewarding, it’s important to consider that with rentals come overdue rent, roof leaks, power outages, finding qualified tenants, and more.
Though the world finally seems to be opening up a bit, and the process of buying and selling homes might look a little different than it did pre-coronavirus. It’s probably going to be a while before anyone feels completely comfortable inviting strangers to come in and out of their homes. Thankfully, technology today makes it possible to give potential buyers a better look at a home from a safe distance, eliminating physical showings until they are absolutely necessary.
A video tour won’t always live up to the traditional showing experience, but it can decrease the number of people who aren’t serious about buying at the present time. Everyone is adapting to be respectful, and open house etiquette is adapting too! Here we provide some helpful tips on proper open house etiquette, both in general and in a post-pandemic world.
Easy Open House Etiquette Tips Post-Pandemic
We’ll start with some open-house precautions that many sellers put into place and then move into more general open house etiquette tips meant for buyers.
Open House Precautions
Here are a few precautions for sellers and agents to make an open house run smoothly and safely.
Leave all the lights on in the house for the entire showing. That way, buyers and agents don’t have to touch light switches. In addition, this saves everyone from having to sanitize these areas.
Offer booties at the door so that all visitors can cover their shoes and keep the walkways clear and clean.
Set up cleaning stations in common areas. Provide alcohol-based hand sanitizers throughout the house, and keep soap and paper towels on the counter next to sinks.
Keep cleaning wipes and disinfectant cleaners handy so that common surfaces can be wiped down between each showing or buyer. Wipe down doorknobs, cabinet handles, faucet handles, and countertops, and any other areas that you believe visitors might have touched.
Encourage all attendees of an open house to wait to enter a room until other people have left. There should be plenty of areas left to explore in the meantime or consider having staggered visiting so that only one family is in the house at a time.
Do’s & Don’ts For Open House Etiquette
Now that we’ve established precautions let’s get into some basic open house etiquette for potential buyers.
Let The Listing Agent Know If You’re Working With Another Agent
As a buyer, it’s good etiquette to let the agent hosting the open house know if you’re working with someone else. Most realtors will ask you this outright, but it’s a good rule of thumb to have your agent’s business card in hand to pass on to the hosting agent.
Open house etiquette ultimately boils down to respect. Buyers should respect the home and treat it the way they would want their home to be treated. You wouldn’t want people going through your personal items, so keep the seller’s privacy in mind.
Avoid going through medicine cabinets or nightstands or other furniture items that don’t pertain to the house.
It’s important to remember that open houses put the seller in a vulnerable position, so take care when touring the home. Sellers are motivated and want their homes to sell, but their personal possessions should still be respected.
Leave Your Shoes At The Door
We mentioned booties earlier to go over the top of shoes, but it might be good to remove your shoes altogether. It’s a simple courtesy that could go a long way. After all, this could be your potential home, and you want the floors and carpet to be in pristine condition. When in doubt, slip the shoes off at the door.
Don’t Go To The Bathroom
Another tricky situation that comes up in open houses is whether it’s polite to use the bathroom or not. As a rule of thumb, it’s better not to go, but the situation isn’t always so black and white.
It’s hard to set rigid guidelines because sellers don’t want to isolate potential buyers or be insensitive to basic human needs. However, as a buyer, try to go before or after and only ask if it’s a real emergency.
Leave The Inspection Process To The Pros
Though your parents, friends, and random family members have great intentions as they accompany you to the open house, make sure that the role of “home inspector” is left to the professionals.
Though some flaws might be obvious, don’t make any hard and fast decisions until a licensed and insurance inspection company has taken a look. Of course, most buyers mean no disrespect, but there is a checks and balances system in real estate so that a buyer can make a safe and informed decision before buying.
While general snooping around should be avoided, you should definitely check the closets. Open up the doors in the house is entirely acceptable when it comes to open house etiquette.
Sometimes homes have hidden walk-in closets or small closets where you expect a large one. Storage space is an essential factor, so feel free to open those doors to see what’s behind them.
Schedule A Private Showing
It’s important to remember that an open house is different than a private showing. Open houses are to help you add a home to your list of potential buys. Can you envision yourself living there? Do you like the quick walkthrough of the home?
If you can, and you do, then it’s time to schedule a private showing where you can get a closer look at the home and get more information from the agent. A private showing is where you can look a little closer and scrutinize the details, while an open house is to help you get a better sense of what you’re looking for.
Looking For A House in Billings, MT or Surrounding Areas?
If you’re looking for a house in Billings, MT, and are curious about who is still holding open houses, get in touch with us today! All the experts at 41 Realty Group would be happy to help you find your dream home, plus give you the low-down on how the seller feels about holding an open house. We’ll answer your questions, establish your wish list, and give you an idea of how the market is looking right now. So call us today at (406) 969-4141 or contact us online.
You’ve heard real estate agents talk about staging your home; what they mean is ways to prepare a property for sale on your local marketplace. It is a way to showcase a home’s best assets to impress buyers and sell quickly for the highest possible price.
Though not all sellers stage their homes (especially homes in lower price ranges), we think you’ll be at an advantage if you elect to take the extra step to stage your property. Here are a few staging tips for sellers you can utilize to help your home sell faster and hopefully for more money!
Staging Tips For Sellers To Help You Sell
If you’re planning to put your home on the market this summer, we likely don’t have to say that you will want to sell your home as quickly as possible and also for your asking price. Though the market here in Billings, Montana, is hot, and houses are quickly selling for their asking price or higher, you can set yourself up for success with these tips for styling and upgrading your home.
Read on as we discuss why staging is necessary, and then give you a few tips that will help attract buyers. These tips can also be used by property managers looking to attract renters into their properties.
Ready to get started?
Why Home Staging Is Important
Selling your house is a big deal and a significant financial transaction in your life. You don’t want to settle for a lower selling price or a more extended time period than you have to. Staging might be one of the most profitable projects you can undertake. Potential buyers are looking for a home they can improve their lifestyle in and fulfill their dreams. When you properly stage, you can create an emotional purchase for the buyer, leading to more profits for the seller.
We think home staging is also beneficial because potential buyers don’t want to walk into a potential new home and only see work that needs to be done. Every problem they see will likely need to be deducted from the cost of the offering price. Too many issues or an unlivable space might mean they pass completely on buying the home.
Let’s dive into a few staging tips for sellers to help you maximize your potential profits.
Boost Curb Appeal
You’ve probably heard this a dozen times, but we couldn’t resist. Most people interested in scheduling a viewing to tour your home will most likely do a quick drive-by first to gauge whether or not it’s even worth looking inside. Make sure your home looks great to anyone driving by:
Power wash the siding on your house and the walkways (trust us on this!)
Consider planting fresh flowers and greenery
Make sure the house numbers are easy to read
Mow the lawn and pull weeds as needed
Wash the windows out front
Consider repainting the front door or porch if it looks tired and worn (but keep it neutral)
Not All Rooms Need Staging
When it comes to home staging, not all rooms are considered equal. Focus your efforts on the rooms that will have the most significant influence on buyer’s decisions. Spend less time (and money!) on the spaces that likely won’t make much of a difference.
The rooms that buyers consider to be most important are the living room, master bedroom, and kitchen. Your real estate agent will give you specific tips on how to maximize those spaces and make them look their best in the listing photos and for the open house.
Get Rid Of Clutter
We’ll get right to it – space is what sells the house, and clutter takes up that space. You can make your home look bigger (and more desirable!) by editing your things down to just the basics. Don’t get us wrong; you don’t have to get rid of all of your stuff! Simply storing excess clutter elsewhere, for the time being, can free up a lot of space. For example, if you keep all your winter items in the front hall closet, but are listing your home in the summer, remove them into a separate storage space. Anything that you don’t use daily should be taken out. Again, the less stuff inside your house, the bigger it feels, and the more appealing it will be to buyers.
Clean, Clean, Clean!
You’ve heard of Spring cleaning, but the cleaning you do when you’re putting your home on the market should be about double. You want every nook and cranny to shine, from the baseboards to the ceiling. A spotless home suggests that the home was well maintained and just adds to the professionalism. A dirty house just won’t sell for as much as a clean house – ask any real estate agent!
Now is the time to tackle those rarely done chores, like dusting the window blinds and wiping out the inside of your cabinets. Even if you’re a fairly neat person, it might be worth hiring professionals to get that deep clean you probably don’t have the time (or patience) for.
Remove Personal Items
When it comes right down to it, buyers need to be able to envision themselves in your home. Removing all personal items will go a long way toward boosting the imagination of viewers. Remove all family photos, keepsakes, and refrigerator magnets, and art. Keep clothes hidden if possible, and remove all personal items from the bathrooms. Anything that is highly personal or evocative of the home’s current inhabitants should be hidden away.
Make Those Small Repairs
Home staging is a great time to tackle the tiny scratches and holes that might signal neglect to buyers. One easy trick is to get those “magic erasers” and remove all the excess scuffs from the walls.
Start making a list for all those little things that could use some TLC. Just like with cleaning, the purpose is to show potential buyers that you’ve maintained the property and care about making the place look nice.
Though staging can seem time-consuming and cost-intensive, it can make a huge difference when it comes to the sale price and the amount of time your home will actually spend on the market. Though you might love the bright colors that make your home unique and fun, they might be just the thing that turns off buyers. When you’re staging your home to sell, the best thing you can invest in is new paint – light gray, white, taupe, light tan, etc. Intense bold colors in a room can distract from the home itself and remind the potential buyer of the home’s past and not their future in it.
Keeping things neutral allows buyers and viewers to imagine their own things inside the space.
Show Off The Closets!
This is a pro tip that you might not hear from other agencies – show off the closets! Open those closets and clear them of clutter and things you don’t need anymore. Open house visitors will no doubt open up every available storage space they can get their hands on. Closet space is one of those make-or-break wishlist items for many buyers, so make sure you show them off to their full advantage.
Trust us; even if you have to store those unsightly boxes and bins in the garage for the time being or even in a storage unit, it’s worth it! Try to leave at least 25% of your closets free to add to the appeal of spaciousness.
Need Help Selling? Contact The Billings, MT Realtors at 41 Realty Group
When you need help staging your home, contact your local real estate agent, like the experts at 41 Realty Group. We have the experience and the local market knowledge to stage your home for buyers and likely already have an established list of people who will be interested. We’ll give you all the tips and tricks you need to sell your home quickly and for top dollar! Get in touch with us today – we would love to help you with all of your real estate needs.
Regardless of whether you’re buying or selling, real estate is usually the most significant financial decision of your life, and one mistake could cost you tens of thousands of dollars and a lot of headaches. There’s no wonder why people choose to trust real estate agents instead of trying to handle all the ins and outs themselves. But what is the actual cost to hire a real estate agent? Is it worth it? Maybe you’re thinking that you could pocket a ton of cash by not hiring a licensed professional.
We get it! Everyone is looking for ways to save money. However, we think you might be disappointed at how little you will actually save if you skip on using an experienced pro to help you navigate the deal. Let’s discuss all the value a good real estate agent provides, and then you can decide for yourself whether they are worth it or not.
Everything You Need To Know About The Cost To Hire A Real Estate Agent
Here’s a list of everything you need to know about the cost of hiring a real estate agent and all the benefits that come with using one (especially on your first real estate transaction).
How Much Does a Real Estate Agent Cost?
The standard commission for a real estate transaction is typically 6% of the home’s sale price. The commission is usually split between the seller’s agent and buyer’s agent, a 3% cut for each of them. For example, if you’re buying or selling a $250,000 house, the agents would receive a total of $15,000 ($7,500 each). We get that it seems like a lot, so you want to make sure that you’re getting what you pay for.
Keep reading as we break down that 6% and what that commission covers for your transaction.
What Does a Real Estate Agent Do?
A real estate commission covers all the work that goes into buying and selling property. There is a lot that goings into buying and selling a house. A seller’s agent will help you stage your home to reach the right buyers, and most importantly, price it right. They take the time to get to know the area and compare prices so that it’s most appealing to buyers and will still bring you a profit. They’ll also make sure your home is seen by a ton of buyers, using a multiple listing service (MLS), social media, and ads. They have tools and tactics to get your home sold quickly and for top dollar.
On the other side, a buyer’s agent studies home listings that meet your needs and are within your budget. They will arrange for a home inspection, negotiate for any necessary repairs or contract adjustments, and make sure you’re getting a fair deal. Buyer’s agents cover all of the ins and outs that go into finding you your dream home that you can afford.
Both seller’s agents and buyer’s agents can give you confidence knowing you have a real estate professional on your side. Plus, both agents share many duties:
Meet with you in person or answer your phone calls whenever you have questions
Give you access to an MLS to offer more options to buyers and more visibility for sellers
Educate you on current market conditions
Refer you to other professionals in the industry (inspectors, attorneys, mortgage lenders, photographers, and more!)
Negotiate the best price and help you through mountains of paperwork
Represent you and act in your best interest throughout the entire process, no matter how long it takes
A good agent tackles all of these tasks day in and day out. Their experience handling tough contracts and helping you avoid mistakes is well worth the cost.
We thought we should also mention that although commission and the closing costs are paid when a home sells, there are few other costs to consider. Home appraisal and home inspections are used to make sure that the house is worth the price and helps bring to light any problems in the home. Talk to your agent to get an estimate of how much each of those necessary services costs, so you have a better idea of what to expect.
Is Hiring an Agent Worth the Cost?
You know the cost, and the ins and outs of what goes on in the daily life of a real estate professional, now let’s answer the question you’re really asking – are real estate agents worth the cost? As we explained above, sellers typically cover the commission for both agents, so buyers have nothing to lose. Sellers, if you think you’re getting the short end of the stick and are considering going the “For Sale by Owner” (FSBO) route, we want to lay out some stats.
We hope this list has proved that a good agent is worth the cost of commission. The best piece of advice we can give you is to find an agent with plenty of experience. Your buddy who barely passed his exam might not be the best choice when it’s your first home. Look for a pro who has a long history of success!
The team of experts at 41 Realty Group would love to be your go-to person when it comes to real estate. Buying, selling, investing – we have an agent in every area who would to help answer your questions, find you the perfect home, the perfect buyers, and more. Reach out to our team today and see if we can help you with all of your real estate needs.
Both real estate agents and brokers are licensed to help you with real estate, but is there a difference between agent vs. broker? In some states, they are interchangeable as a real estate broker is at the same level as a licensed real estate agent. In others, like here in Montana, brokers must have at least two years of experience and then pass a broker’s exam.
Let’s talk about some of the differences between agents and brokers.
Understanding the Differences: Real Estate Agent vs. Broker
Though both agents and brokers can help you with your real estate transactions, we thought we should highlight some fundamental differences in responsibilities.
Real Estate Agents
A real estate agent is a person who has taken and passed all required real estate classes, plus they have also passed the real estate licensing exam in the state they want to work in. For those just getting started in real estate, this is the most encompassing of the titles. You might also hear agents called real estate “associates.”
An agent can represent both buyers and sellers with their real estate transactions. Buyer’s agents will collect a wishlist from their clients and try to find a home that matches their wants and needs. On the other hand, a seller’s agent will list a home on the market for their client and try to solicit buyers.
When it comes to agent vs. broker, an agent is responsible for carrying offers and counteroffers between buyers and sellers, plus answer any questions that come up along the way. Agents work with other agents, and they also guide their clients through all of the necessary paperwork. They will ensure that their clients are aware of any and all requirements they need to complete the sale, including home inspections, closing dates, and more.
How Agents Are Paid
Real estate agents work for brokers or agencies and are typically paid on a commission, which means they receive a percentage of each property’s sale price. The higher the sale price, the higher the commission.
Responsibilities of Real Estate Brokers
When it comes to agent vs. broker, a real estate broker has continued their education past the standard entry-level. They’ve successfully passed the state broker exam and can now work independently or even employ agents underneath them. Some agents who have passed the broker exam still choose to work under a brokerage, and they are typically called real estate associate brokers. Associate brokers might share in the brokerage profits and have the potential to earn more than a typical agent commission.
Like buyers’ agents, brokers who work with buyers help them find properties that match their criteria, conduct negotiations, prepare offers, and handle any other issues that come up before the closing date.
Sellers’ brokers determine market values of each client’s properties, help list and show properties, schedule open houses, communicate with sellers about any offers, and assist in negotiations.
How Brokers Are Paid
Brokers receive a commission once the transaction has been completed, and the commission amount will be listed in the contract between the broker and the buyer or seller. Typically the listing agreement will outline how much of the percentage of the property of the sale will go to the broker.
A realtor is another real estate professional, but the distinction is that they are a member of the National Association of Realtors (NAR). To become a member, agents must agree to abide by the association’s standards and uphold its strict code of ethics. The word “realtor” is commonly confused or mistaken for “real estate agent.” However, it can be open to various professionals in this industry, including residential and commercial brokers, appraisers, property managers, and RE salespeople.
Though most real estate communities do it naturally, realtors are bound by a code of ethics where they promise to be transparent and always uphold their client’s best interests in all transactions. Usually, those in this association are experts in their field.
Key Takeaways For Agent Vs. Broker
If you skipped everything above, here’s the quick breakdown:
Real estate agents are licensed to facilitate real estate transactions for both buyers and sellers, work underneath brokers, and are paid commissions for each sale.
Brokers typically have more experience, are more qualified, and can work independently or have other agents work for them.
Realtors are a part of a specific trade organization called the National Association of Realtors and can hold any position in the industry.
The significant distinction among the three is that an agent must work under a licensed broker, while a broker can work independently. So when you work with an agent at 41 Realty Group, you’re working with an agent employed by the brokerage. Essentially, you’re hiring the brokerage to help you through the process, and your specific agent is acting as the agency’s representative.
What You Need To Know About Licensing
It’s important to note that every real estate professional is subject to specific regulations. Both agents and brokers in the United States are licensed by the state, not by the federal government. Each state has its own laws for agents vs. brokers and what types of relationships can exist between them and their clients, plus the specific qualifications that real estate professions should meet.
Finding the right real estate agent that fits your needs doesn’t have to be hard. Every real estate agent is legally bound to act in your best interests, and when you work with a team like ours, you’re getting an entire group of professionals who know precisely how to help you. Ready to chat with an agent OR a broker at 41 Realty Group? We would love to help you with all of your real estate questions and needs! Get in touch with us here.
The City of Billings Planning Department has been working on updating the zoning code, which has been a massive undertaking. This video explains the entire process and why this update is happening as Nicole King, owner and broker of 41 Realty Group interviews Nicole Cromwell, Zoning Coordinator/Code Enforcement Supervisor.
Watch the video or scroll down for the full transcript of the interview.
What Do You Know About Project Re:Code in Billings, MT?
Nicole K: Hey there! I’m Nicole King, broker/owner of 41 Realty Group. I am here at the City Planning Department, correct?
Nicole C: You are.
Nicole K: Okay, good almost got that wrong, with Nicole Cromwell and the reason I wanted to sit down with her today is that the city of Billings has been going through for the last few years the major process of evaluating current zoning and looking at how that can be changed and updated to be more effective for the people that live here and more beneficial to all the ways in which that we’re trying to grow and improve our community. And I wanted to talk with Nicole because she has been heading out that entire endeavor and just really excited to hear what she has to say, so…
Nicole C: Well thank you, Nicole.
Nicole K: Thank you!
Nicole C: Yeah, and thanks for making this opportunity to reach some of your constituents and some of your customers and clients. It is really important. About four years ago the City Council adopted a new growth policy. And the growth policy is intended to take the community forward like 5, 10, 20 years into the future. And it’s very broad and general statements about where we want to be at those points in time, and how we implement that is through different codes the city council adopts. So we have a code about buildings, we have a code about how streets are developed and laid out, and what types of sidewalks need to be put in, and where water and sewer is going to go. And the major portion of it is also zoning. So zoning takes those goals and policies and tries to implement them. So in 2016, when they adopted this new growth policy we looked at our zoning code and said, you know this 1972 zoning code is really not doing it anymore. Not for these growth policies.
Nicole K: The world was very different in 1972.
Nicole C: It was, yeah. People who know what a cassette tape and a pencil is and why those two things go together were alive back then and those don’t exist anymore. They’re not useful anymore, and we have many tools like that in our existing code that don’t get us where we want to be. Where we are now and where we are planning to be in five or 10 or 20 years. So the Planning Board, with the approval of the Council and the County Commissioners, said let’s do this – let’s take on this big project and update our zoning project.
Nicole K: Right.
Nicole C: So the first thing they did is they decided that it had to be done with a lot of citizen and constituent input. It couldn’t be done by just hiring a consultant, having them come in read our existing code, read our growth policy and write us a new code. That doesn’t really work for our community.
So we established a steering committee. It was 18 people from real estate, from neighborhood task force, from people who sat on the zoning commission, city council, county commissioners, all got together and talked about how we were going to line out this project and get it done. And we met starting in august of 2017 and we met monthly for quite probably about six months. And they established what we called our guiding principles for Project Re:Code, which is what we called it.
Nicole K: Okay.
Nicole C: And Project Re:Code is this effort to build a new zoning code for Billings and Yellowstone County as well. So those guiding principles basically gave us our marching orders as staff and consultants were brought on board to help us with the hard work of writing and rewriting and illustrating and graphing all of the new zoning. Along with our – we established four working groups who focused on specific parts of the code.
Nicole K: So what were a couple of examples of the guiding principles and then maybe what were those work groups?
Nicole C: Okay, so the guiding principles of, you know, our number one guiding principle was to make the code clear.
Nicole K: Okay, so someone like me could just open it and understand it.
Nicole C: Right. Not using fancy terminology –
Nicole K: Could you make the whole government like that?
Nicole C: Well, you know, there are some states that adopted what they call ‘plain english’ requirements for laws and statutes. So we kind of adopted that into our zoning. You obviously have to use some technical terms that are specific to real estate. So clarity was important but also consistency was important. So every time we looked at a part of the code to change it, we said okay, what other parts of the city code is this going to have to fit with and is that going to contradict those parts of the code. So we kept our eyes on that as well as we went through. We wanted to make sure that the new code was more predictable than the existing code because some zoning districts that we have now – you could have everything from a shop warehouse to a multi-family apartment building and if it’s vacant ground, you just don’t know until the shovels go in the ground and that person has decided whether it’s a shop building a warehouse or a three-story apartment building. Those are the kinds of districts that make people very afraid. I mean, there’s no other way to determine, it’s scary.
Nicole K: /yeah anytime that I go to sell a piece of property like a house or anything that’s already built, if there’s vacant anything nearby, a lot or just open ground of some kind, the very first question I get is “do you know what’s going there?” And then I’ll do all sorts of work to figure it out, but that’s often because like you were saying, the zoning that it might fall under is just open to anything and everything. So it’s hard to know until you get a hold of the right person who’s in the know about what might be built there.
Nicole C: Right, so we also knew we had voids in the code. So that was another guiding principle; we needed to fill in parts of the code that we had never had to deal with before. Accessory dwelling units. Short-term rentals.
Nicole K: Absolutely for sure. All kinds of craft alcohol that’s now allowed by the state of Montana. The only one we even talk about in our code is micro breweries, but that is not a universal term. We have micro distilleries now, we have cideries, we have wineries – all have different types of licenses from the state but we only talk about one of those.
Nicole K: Right, so the licensure has kept up with whatever the current industries are but our zoning has not?
Nicole C: Right.
Nicole K: Okay.
Nicole C: So our working groups were because we have, well we had a combined code with the county. We separated those codes so we had one working group that worked just on county issues and one working group that just worked on urban issues. Because we’re going to have separate codes
Nicole K: Yeah which is really helpful, it’s great.
Nicole C: It is, because the issues in the county, although we share edges, they’re very different issues. So we wanted to make sure that those groups worked just on those issues and then came together when there was a common, common thing that they had to work on. So that led to two more working groups; one for landscaping codes and one for signage codes. And they worked on both the city and the county versions of both of those codes. So it was quite lively, those groups. We met at least once a month, sometimes more depending on what we were working on. We started in January of ‘18 and most of the groups finished up in January of 2020.
Nicole K: Right before COVID, so that’s good.
Nicole C: Right before COVID. Then taking all of that work and then having the consultant and the staff working to refine and polish and get those public review drafts out took most of the spring, until March/April, and then those code sections were published online on our project-recode.com website.
Nicole K: Make sure to put a link down in the notes to this video so you guys can click right on it and go to it.
Nicole C: So all of the presentations that we’ve done to many task force or interest groups are posted on that webpage, on education and outreach. If you want to look at your existing zoning versus your new zoning district there’s a side-by-side comparison map on there. There’s also the code outline page, which has both the city and the county as different links on there, so you don’t get confused. You don’t have to read both of them at the same time. So it’s we were hoping to lose some weight in the code pages.
Nicole K: What, 428 pages in the proposed… something like that?
Nicole C: Right it depends on what font…
Nicole K: Yeah I guess that’s true. How many pages were in the old one, do you know?
Nicole C: 450.
Nicole K: So quite a bit though, I mean, 25 pages of code is a lot to lose though, so that’s excellent.
Nicole C: So actually when it finally gets into the overall city code it’ll probably shrink, because we use large font we have pictures and graphics, and you know.
Nicole K: There are a lot of graphics which is very helpful in the proposed code to really see when it says the description in writing. What I picture might be different than what somebody else pictures so I really do appreciate all of the graphs that you guys put in there. It makes it a lot easier to understand for sure.
Nicole C: Right. So I guess one of the, I guess big changes, is that right now we have about 12 residential zones. When we looked at our growth policy it was written around the idea that there are neighborhoods. They’re not just residential subdivisions. There are pieces and parts that go together in a neighborhood and so we wrote our new code as neighborhood zones, not just residential zones. Now those neighborhood zones allow different types of dwellings. So we have one zone district that’s just single family and then we have two zones that allow one or two family. And then we have three levels of multi-family zoning depending on where you’re intending to use them or where they actually are in the community already. So we found these small apartment homes, houses, kind of scattered throughout all of Billings. There’s the little four unit sometimes just three unit buildings in our neighborhoods already. So we built a code for that.
Nicole K: So the things that already have – so let’s say it looks from the outside like a single family but maybe it has been divided into two or three units – you looked at that and gave it a different zoning than its neighbors who still truly are single family.
Nicole C: Yes.
Nicole K: Perfect, okay.
Nicole C: Right and we built that code, that district, so that it could be used the same way in the future. And it wouldn’t be you know it wouldn’t be like our current codes which you know if you have a multi-family zone, you could have next door to you, you could have a four plex, an eight plex, twelve plex, ten plex. It’s really – it’s so unpredictable. And it’s scary to have a multi-family near you because it’s so wide open. So we made it more predictable and we kind of made these smaller increments of multi family. From the small four unit buildings, that’s all, or you could go a little larger up to eight. And then beyond that there’s the five plus so it’s more predictable. If you’re next to this mixed residential three zone you know it’s at least going to be a five unit building and sometimes much larger.
Nicole K: So you’ll tell right from looking the name of it instead of – so right now when I look at multi-family vacant lots for investors, they then have to call you guys and say, “what can I build on this” and then you have to look up the size of the lot and do all sorts of measuring and then go, “you can build a fourplex on that.” So now it’ll just be that’s the zone and that’s what you can build.
Nicole C: Right.
Nicole K: Great, love it.
Nicole C: One to four, to eight, and five or more.
Nicole K: Well that makes my job much easier.
Nicole C: When I was talking to our director this week about this new tool that we’re planning to put in the code called “The Planned Neighborhood Development Tool”. This is meant to make the edges of the city and the county more seamless. In other words if you want to come into the city and annex property and build a new neighborhood, here’s some like a kit of parts you have to use in order to do that. Because we’ve built these new neighborhood zones, we’re using those as part of the kit. Each one of those zone districts was based on an epic or an era of when billings was built. So we have what we call first neighborhoods or N1, so those in the standards and site requirements for that N1 district are intended to make anything new that’s built in those existing areas, fit in better.
But it also has some very good things to recommend for us now. So it can help you build cottage courts, you know, where people can live around a central courtyard that they share that open space together. It’s a very popular form for elders, you know, or that they don’t want to own their own lot, their own big backyard to take care of, but they still want to have some kind of semi-private open space for when the grandkids come and visit or whatever. So that’s one of those things that you can do in that N1 district is you can build some homes around a courtyard.
So that’s an era thing, and so when we did the next era, which is mid-century or N2, we said, “there are some nice things about this too” Yes it was popular and we did it almost exclusively after World War II but before 1970, there’s still some really good things about that so let’s keep those good things and allow people to use them in new neighborhoods.
Nicole K: So examples of those good things would be…?
Nicole C: Well they generally were built as single level living. They were ranch style, they weren’t as tall. Sometimes they were split levels. Sometimes they had like a half of a second story on them. So examples of this would be like Gorham Park area or Forest Park a little bit. But some of those other places like between 24th and 15th street West – all that kind of was built during the same era. Sometimes they have a two-car garage attached on the side, so the buildings are longer, they face the street directly. So there’s some nice things about that style of building and neighborhood formation. So we said, let’s let’s honor our existing neighborhoods – put that zoning there. And then let’s make sure that we can carry that forward because that is all of those eras. And then the N3 which is the more suburban style that we’ve had over the last 40 years or so. Let’s allow all of those available for new neighborhoods as they come into Billings.
Nicole K: So N3 they could harken all the way back to the 1920s and 30s craftsman style, or they can honor a mid-century modern style, or they can go the traditional, things that we’ve been seeing they can do anything really in the newer neighborhoods
Nicole C: Right. That was the intent, so that we allow that flexibility but also some predictability for neighborhoods as it comes in. Because right now a developer can go to the county say, county give me all my zoning and then just annex to the city and say, oh city you’re not involved, sorry.
Nicole L: Very interesting, okay.
Nicole C: So that’s one of the reasons for that tool as well – so that the city can be involved in that land use planning decisions, soup to nuts. So that’s another good reason for that. The other part of that PND is that we found some neighborhoods, because of subdivision laws, don’t build any public space for people to use in their own new neighborhood. So what we built in here was that they have to do at least a small area, that they develop. It could just be all grass, but it’s a place for kids to have a little pick up game, kickball, or people just to stand around and chat. Just to be outside together in a public space. Socialization kind of helps people know their neighbors more.
Nicole K: Yes, that’s true.
Nicole C: Right, so we built that into the Planned Neighborhood Development tool as well. Just a little bit, not a lot, but enough so that every neighborhood has at least some of that.
Nicole K: A little bit of green space goes a long ways for both beauty and relationships and overall flow of the neighborhood. So yeah it’s been nice to see that in a lot of the newer neighborhoods that are going up as those designated free space areas, it’s really nice.
So going forward now, if people want to learn about Project Recode, so project-recode.com is the website they would go on. They can kind of explore all of that. But if they have, we’re kind of – we’re pretty far into the process as far as public comment and input and changes and things. Where are you guys at in that process right now?
Nicole C: Well I guess at the time this airs, we’ll hopefully be between when it was approved and when they have to vote a second time on it. That’s always required for any zone change like this. Right now we’re just going into the public hearing process scheduled to start on November 9th, hopefully conclude on them November 23rd and then have that second reading in December.
Nicole K: Those are the City Council Meetings where they can tune in to online and check out – or are they doing in person, in person attendance?
Nicole C: The county commissioner’s hearing is on Tuesday, November 10th in the morning and they are you can attend in person at the county commissioner’s hearing room, third floor of the stillwater building. They also doing online, so they’re doing virtual, online, in person all together in the same room.
Nicole K: Interesting. And is there anywhere, a way, without attending the actual meetings, can people submit comments at all or not or anything and how do they do that?
Nicole C: Right, so on the city website you can go to the Mayor and City Council page and there’s a link there you can click it and you can send an email to all of them at once.
Nicole K: Oh thanks, okay. And you can probably attach documents, search stuff, pictures, just a standard email?
Nicole C: Yeah just a standard email that goes to all of them.
Nicole K: Okay that’s handy yeah is there anything about Project Re:Code that you didn’t get to say yet that you would like to?
Nicole C: Well I guess I would say that the city has done this before. Not in my lifetime.
Nicole K: Anybody who was alive in 1972 or before they did a lifetime ago, right but not since then. That’s quite a while ago.
Nicole C: Yeah, so historically speaking the city of Billings has had zoning since July of 1930.
Nicole K: Wow, okay.
Nicole C: And at that point we had five zoning districts and it was just this down town
Nicole: Which was perfect for what they were doing.
Nicole C: Yeah and then from 1930 until about 1954, that zoning was pretty much the same. And then in 1954 they kind of redid the whole thing.
Nicole K: Okay, just like you guys are doing right now.
Nicole C: That’s right and then we redid the whole thing in 1972 and now we’re redoing the whole thing in 2020. I don’t want to wait 40 years to do this is again.
Nicole K: So it’s nothing new, nothing unusual, it’s something we should probably – so it sounds like in the 50s and so 30s, 50s, 70s and then we missed our 20-year mark and doubled it and now we’re doing it again. So probably should happen fairly often.
Nicole C: Yeah, every time you do your growth policy update, which under state law is every five to eight years basically.
Nicole K: Wow, so that’s fairly frequent. We should be looking at the current zoning and making sure it appropriates.
Nicole C: Then once it’s adopted, we’re going to probably have about a year of kind of shakedown, fitting in, working the code. And where we’re finding issues or little things that need to be fixed or tweaked or, you know, just like, wow we missed the mark there kind of thing; we’re going to come back to the city council in four months, seven months and 11 months with all of those like minor things that need to be fixed.
Nicole K: Yeah, okay. One of the conversations I had with you a few months ago was sort of this idea that there are just so many variances that get applied for currently under our current code. I think you had said one of the rumors that’s going around is that the variance process is going away, that what’s in the code is all you’re gonna do now. That’s not true?
Nicole C: Correct.
Nicole K: Okay, so how many variances you guys were working through triggered some of the need for change, because you were seeing the same things over and over and over again requested in those variances, correct?
Nicole C: Oh yeah.
Nicole K: So a lot of what you’re seeing, or were seeing in those previous variance requests are now built into the code.
Nicole C: Right exactly. So for example, the lot coverage allowed on each lot is very low.
Nicole K: Currently very low.
Nicole C: Currently very low, what’s allowed. It’s more of a rural type of lot coverage allowance than an urban lot coverage. So we’ve kind of bumped those numbers up. So those types of variances are not going to be coming to us like four times a month. Which is you know, if you have to do one it will probably be the only thing that you ever do in zoning is a zoning variance. Hopefully we’ve kind of relieved some of that pressure by saying, no this is normal, this is okay.
Nicole K: This is now allowed, you don’t have to come to us for a variance to do that thing.
Nicole C: Right we have what we call the five-minute variance.
Nicole K: Okay, I would love for anything in the government to take five minutes. Tell me how you’ve done this.
Nicole C: Well the five-minute variance is based on the fact that we go through a month-long process of analysis looking at zoning history. Yes this is the same as the last 10 of these that you’ve done, it’s not a big deal. You get in front of the board of adjustment and it takes them five minutes to approve it.
Nicole K: Okay so really the whole process isn’t in five minutes, it’s that last portion.
Nicole C: Right, but it’s something that you would wish, it’s like “oh my gosh why are we doing this again.”
Nicole K: Yeah so a lot of that will just go away, but it’s not going away entirely. So if there’s something that somebody goes to the new version of the code and they’re like, oh well that still doesn’t work, there’s still going to be a process for them too.
Nicole C: Right exactly. And we’re building in what we’re calling administrative relief so it’s for like the really tiny changes like less than 10 percent of the code requirement and you just need that little bit of room to move the building like a foot. It’s not going to be a whole full-blown variance you make your case, you meet the criteria, and administrative relief and you’re good to go.
Nicole K: Love it. It sounds so much easier than the current process is. Awesome.
Nicole C: Well we hope so.
Nicole K: I think it will be. Any other things that you’ve been hearing that are really common misconceptions about the rezoning that maybe we should cover real quick?
Nicole C: Not common misconceptions. There’s a lot of very specific things that come forward as questions from the written code and then, you know, just clarifying those for folks. I do that a lot. People can call me anytime, 247-8662. Some people have me on speed dial.
Nicole K: I do have your number in my phone now.
Nicole C: So always available for questions.
Nicole K: You’ve been incredibly available and incredibly helpful. I do appreciate every time that you’ve got on the phone with me and spent time working through the issues that my clients have had so…
Nicole C: sure absolutely, it’s what we’re here for.
Nicole K: I love it. Okay, anything else?
Nicole C: Nope that’s it.
Nicole K: Alrighty. Well thank you for tuning in and definitely go check out that website. Put in your property address, see what the current zoning is, see what the proposed zoning is, take a look at what that’s going to mean for you and make sure you understand everything it means. We’ll see you again soon.
In our first installment of Billings Best, Nicole King sits down with Sam Hensler of Dynamic Analysis to discuss home inspection information. Together they go into more detail regarding home foundations, how soil contents affect house settling, common homeowner mishaps, and so much more. This video also shadows Sam on an actual home inspection with a new buyer.
This video is long, but the knowledge you’ll gain as a homeowner or a potential buyer is invaluable. Watch below or scroll below for the full transcript.
Home Inspection Information You Should Know In Billings, MT
Here is the transcript for the first episode of Billings Best, which discusses home inspection info you don’t want to miss. The transcript covers the first half of the video before Sam goes on a home inspection to show you what to look for.
Nicole: Hey there, I’m Nicole King, broker-owner of 41 Realty Group. I’m here at Dynamic Analysis with Sam Hensler, the owner, and we’re here to chat a bit about what is going on in the greater Yellowstone Valley Area.
Kind of the elephant in the room that everybody’s been hearing a lot about is some foundation and soil movement and things out in Copper Ridge. We are definitely not going to talk specifically about Copper Ridge today but Sam, and he’s going to give you all his credentials here in just a moment, but he is well versed in soils and foundations as a structural engineer and I just wanted him to tell us kind of what to expect from areas around the Billings Area as far as soils and structure and what people should really be looking for in homes in those areas and how they can best take care of their homes so it can last as long for them in the best condition possible. So thanks for meeting with me.
Sam: Yeah, absolutely.
Nicole: All right so tell us about you, your credentials and why we should rely on you as an expert.
Sam: Sure so MSU grad and graduated with a degree in engineering at MSU. Went on to design uranium processing plants for a company out in Bozeman for five years and worked on building designs and infrastructure and large industrial designs and then moved out to Billings where i got involved in more building and residential specific construction and the design for those. And something I had never heard of but the need for structural engineers to evaluate homes that were being bought and sold which was not something that I had seen before but apparently happens pretty often here. And then now I do about 800 of those a year.
Nicole: 800? Every year? So visiting existing residential structures to evaluate their structural integrity.
Nicole: Okay, so when you get called out what are the things that you see most often?
Sam: Yeah, yeah, it depends on the area. Certain areas have specific issues whether they’re relating to the soils in that area for instance if we go south of the river then the soil changes completely and now we’re worrying about heaving soils that are pushing up on slabs and pushing all the guts of the home up and potentially lifting that the floor the roof up off the foundation, so things like that are more concerning once we go there.
If we’re going along the rims then we’ve got issues with slope stability and rock fall and collapsible materials and air pockets and all sorts of weird shifting in the debris field of a former landslide for going out in areas where you have a lot of soil that was deposited by wind like the northwest portion of billings there’s a lot of of compressible and collapsible soils that can move foundations.
If we’re looking at the older part of town then we’re looking at a lot of foundations that may not have that many usable years left depending on how they’re originally constructed and how well they’ve been taken care of for the last 100 years.
A lot of times there’s homes that have been heavily modified because they used to build homes pretty small and would just add on to them and I see a lot of homes that have had bearing walls removed or portions of the walls that are meant to hold the building up in a windstorm. A lot of times people dig out there, underneath their floor and put upgraded utilities like a large furnace or water heaters or things like that and they’ll undermine their foundation because it was only six inches deep to begin with and then a simple hose being left on could cause the foundation to collapse at that point. So it really depends on the issue and what part of town you’re in and when your house was built and how well it was taken care of and what kind of soil it’s on.
Nicole: Okay, so if you’re thinking of giving homeowners, either people who are about to be homeowners or currently homeowners, some advice on things that they need to be doing, kind of no matter what area of town they live in, what are some major things that they really need to be doing to make their house last for them?
Sam: Sure, so the number one thing that everyone’s probably heard of by now is just keeping good drainage and there’s a lot of reasons why keeping good drainage is important for areas that have hydro sensitive soils, soils that will react when water is mixed in with them. So like a swelling soil like you have south of the river or a collapsing soil that we have up in along the rims or in the northwest part of town that will collapse when they get wet.
It’s really important that we keep the soil underneath the foundation dry to prevent it from moving, but also, for instance, if you’re in Laurel where there’s high alkalinity in the water and in the soil it will react chemically with the concrete and dissolve the foundation out from underneath the house.
Nicole: That doesn’t sound like a good thing.
Sam: No, it doesn’t and it happens to a lot of homes out there. It’s a slower process but a lot of those homes are in that age where I have seen foundations completely converted back to sand and we’ve had to replace foundations just because it dissolved, just disintegrated right underneath the house because water was pulling up and carrying sulfides into the, into the concrete where it would evaporate in the dry basement air and build up and disintegrate the concrete.
We get frost heave out here any time that you get freezing conditions which we can’t really avoid unless you heat a space so if you have an unheated garage, it’s an issue. If you have a shallow foundation, that’s an issue, if you have frost susceptible soils which are fine particle soils like silts and clays which we have all over and we have moisture, which also can’t really get rid of then you’re going to get frost heave so that’ll lift up on any slabs that are unheated throughout the year. So like garages we’ll see a lot of slab heave movement which will change the drainage of the slab and potentially cause all your watershed from your car to drain towards the foundation and cause further issues in the foundation.
There is lots of spalling like freeze-thaw spalling, just in concrete that gets beat by the Sun. Concrete’s really porous, the water will actually absorb into it, which is not something a lot of people know but water can pass through the concrete fairly easily, just really slowly. So if you have in the Spring while you’re getting lots of freeze thaw, the water will move into the concrete and the foundation and then freeze at night and can pop things off and you’ll get a bunch of spalling along your foundation as the thickness of the foundation wall just kind of erodes and then you can start to expose rebar which will get wet and then that’ll rust and expand and pop your foundation more.
So a lot of things mostly related to water damage to the foundation and the soils beneath the foundation.
Nicole: So what are some of the most common reasons that you see water go towards the foundation? Is it sloping towards, planting gardens next to the houses? Tell us what you’re seeing most often.
Sam: Drainage, for sure, and especially in new homes, it’s really common when they’re building a house they, you know, they dig down to the bottom of the foundation and they they build everything up from there and then they put the soil back in they backfill it up along the foundation wall.
And a lot of times it doesn’t get compacted very well in that spot so right along the foundation wall it can get pretty fluffy and you’ll have your landscaper set your landscaping drainage so that’s draining away from the home but within the first couple years it can, all that air that’s trapped underneath the underneath the surface there, can escape and all of a sudden that drainage starts to collapse and turn negative and now you’re draining back towards your foundation.
That’s probably the most common thing I see, especially in newer homes, is just over time that backfill slumps and now you have negative drainage and need to redo your landscaping.
Sam: Gutters are another thing a lot of people just let their gutters drip right next to the foundation and then water pools up there so you need some good extenders on there.
Nicole: How long should extenders go?
Sam: I like six feet, it doesn’t matter too much as long as it’s discharging the storm water in an area that has positive drainage is taking the water away from the foundation it doesn’t really matter how long they are if it just comes pouring right back to the house.
Nicole: Sure. I see a lot of times that they terminate inside gardens where it’s got like a concrete barrier all the water goes up against that and then it just stays in that garden so getting it on the other side of whatever edging someone might have, things like that.
Sam: Yep, ideally, so newer homes you’ll see where they have the concrete edging the little curving that’s five, between three and six feet around the home and so if you can kick it out over that that’s ideal in an area where you don’t need to remove it for lawn mowing because people tend not to put it back.
Nicole: Yes, I see that a lot.
Sam: Yeah, but a lot of places will do underground discharges okay so the downspout will actually go underground and it’ll either come out and pop up in the yard somewhere or it will go to an underground drain field depending on where the house is located. If you have hydro sensitive soils it’s generally not a good idea to inject the water underneath the surface because those sorts of soils don’t accept water very readily so if you can keep it on the surface it’s more likely to just roll away. But if as soon as you get it underground then it’s just going to percolate in and get into an area where it’s really not supposed to.
I tend to stay away with subterranean discharges if I can, if you can keep it on the surface and just let gravity do all the work it works out better, more often perfect.
Nicole: Sure. Anything that you see a lot that you wish people would just stop doing that we haven’t talked about yet?
Sam: So many things.
Nicole: Top two.
Sam: Let’s see, oh yeah think about that for a little bit. Let’s see so I work on both ends of a structural lifespan. So I design new things for people to build and I do forensic evaluations of things that are failing and it costs much more money to fix something that’s failing than it does to just build something correctly from the get-go. So I think the biggest thing is just making sure that even if you’re doing a simple retaining wall or just about any structure a lot of things are more complicated than people really understand. And even if they have a contractor who they think is really confident in certain areas, if you’re doing anything that’s outside the norm it’s a good idea to get a professional involved and have their opinion weigh in and see what really needs to be done.
A lot of people think it’s expensive to spend a couple hundred or maybe a couple thousand up front on a design but compared to spending tens of thousands of dollars to come back and fix it later, it’s much cheaper.
Nicole: Yeah, I see the tens of thousands to fix something when I enter the picture as a real estate agent a lot, so I would love it if they would get a hold of you first.
Sam: Yeah, absolutely.
Nicole: Let’s switch to not just getting water away from the house but what are some things – a lot of times I see ventilation not proper in attics, bathrooms that the vents discharge into the attic, what kind of structural problems can that cause?
Sam: So, I see pretty hefty mold and water damage in certain circumstances. I think the worst I’ve seen is either dryer vents or furnace vents venting into an attic or into a crawl space and completely demolishing all the framing. You can definitely get the same thing with bathroom vents because it’s a lot of moisture that you’re moving into the attic and that wood will soak up that moisture and you can get mold growth.
If you have OSB sheeting for your roofing that will soak it up right away and lose a lot of its structural integrity and start to grow mold pretty quickly. So in general keeping the moisture outside the building envelope is a good idea you don’t want to dump it anywhere inside of the area you’re trying to keep the environmental conditions out of.
Nicole: Okay, so if somebody is worried that they have some structural problems, things that they’re like, I don’t really know if this is quite right, if this is the way I should be doing it. When is the point that they should probably get a hold of you or someone like you?
Sam: Well, in general, if you’re going to build any sort of structure if you’re not working with a contractor that is reputable and understands what they’re doing and going through the appropriate permitting process because you need to permit almost everything. There’s a handful of things you don’t need a building permit for, but in general in order to get a permit you need to have a plan it’ll be reviewed by the city. If the city doesn’t feel that the contractor’s plan is done appropriately or isn’t considering all of the possible issues that could arise then they’ll request that an engineer take a look at it and then it comes to me. Or you can start there and have an engineer take a look at it first and develop a plan or an architect anyone who knows what they’re doing basically and going through the right channels to make sure that it gets done correctly
Nicole: Okay, sounds good. Is there, how do people get a hold of you and find out about your services?
Sam: I’m online you can Google “Dynamic Analysis” or “structural engineering and Billings” and I should pop up there somewhere and then my number you can email me through the website or reach out to me. I think I’m on Facebook but I’m not, I am on facebook but i’m not on Facebook often.
Nicole: I get to follow all your fun snow adventures and things like that on Facebook yeah that’s great, awesome. Thank you, Sam.
The second half of the video shows Sam leading a buyer through an actual home inspection so that you could see what to look for. To get more help from Sam Hensler and Dynamic Analysis, go to dynamic-mt.com.
Due to COVID-19, mortgage rates are at an all-time low, which means a renewed interest in homeownership. Especially as young people are tired of seeing their rent costs rise every year, the idea of having equity becomes more and more alluring.
There are plenty of benefits that come with owning a home, including building a path to a greater financial future. However, first time home buyers might be shocked at the real costs of homeownership. In addition to mortgage payments, the real cost of owning property involves plenty of hidden expenses. Here we go over which costs are simply financial and which might be a surprise to you. We’ll look at the most common expenses and how to deal with them.
Your Guide To The Costs Of Home Ownership
Though your house is one of the most significant purchases you can make, other ongoing expenses come with homeownership. Things like closing costs, down payments, moving, and more, let’s discuss some of the things you’re most likely to encounter.
Homeowners’ insurance is not an unexpected expense; almost every bank and mortgage company requires that you have insurance before giving you a loan. The premiums will likely be included in your mortgage payment. A lot of times, your homeowner’s insurance premiums will be paid from your escrow account, like your property taxes.
Remember that premiums often rise annually, particularly if you increase your coverage to reflect your property or possessions’ rising value.
Another surprise that home buyers often don’t realize is that most homeowner’s insurance does not cover “acts of God.” You’ll need additional coverage for floods, hurricanes, earthquakes, and even water damage from storms.
All homeowners are required to pay property taxes. The township, city, or country where your home is located will determine the tax rate, not your bank. Property tax is basically a guaranteed perpetuity payment that is made at your expense. Like with any tax, you don’t have a say in how much it will be, but there are strategies to help lower it.
When it comes to your home, water can be its worst enemy. The primary job of your roof is to keep water out. A leaky roof can cause cosmetic damage both inside and out of your house, and it could destroy belongings inside and even damage the integrity of the structure.
Roof damage usually happens when shingles get cracked, blown off, or damaged in some ways. Roofs will inevitably need to be restored or replaced eventually, so make sure you have an inspector look at it closely when you buy – you might be able to negotiate the price if the roof is in bad shape.
The Heating, Ventilation and Air Conditioning (HVAC) System
Your home’s HVAC system is a complex system in your home that controls heat, cooling, and the overall circulation of air throughout the residence. This system should not undergo cheap DIY fixes; you should be prepared to hire an HVAC professional from time to time.
You’ll likely need to buy new units at some point, be it at the time of purchase or later down the road, as these systems do wear out over time. Replace the furnace and AC filters to help keep them running efficiently.
We recommend having your HVAC systems inspected at least once per year. Do some research in your area, as many companies over service or maintenance plans might reduce the cost of an annual inspection and provide other benefits, like lower costs on parts or even reduced pricing on emergency visits.
The Electrical System
Faulty wiring and other electrical issues cause a decent amount of fires in homes every year. As a homeowner or future homeowner, we suggest that you have a basic understanding of how these electrical systems work to keep your home and family safe.
If you’re facing any sort of systemic problem or in the middle of significant remodeling, make sure you call in a trusted and licensed electrician to make sure everything is installed correctly and up to current codes and safety standards.
Another on our list of the costs of homeownership is plumbing issues. Clogged drains and other small plumbing problems will happen from time to time, and they usually aren’t a big deal.
However, some older homes might present larger problems, specifically if they contain galvanized iron water pipes. These pipes become clogged with mineral deposits over time and will gradually reduce the water pressure in your house. The bad news – you can’t repair these; they must be replaced entirely.
Talk to your real estate agent and your home inspector to determine what to expect before you buy.
HOA and Condo Fees
If you buy a property within a condominium associate or a homeowners’ association (HOA), you will be required to pay a monthly or quarterly fee. This fee will include the cost of things that benefit the entire neighborhood, from snow plowing to landscaping, garbage collection, and more.
HOA fees can rise steadily, or your HOA might deem it appropriate to charge extra for individual extra projects to benefit the neighborhood, like adding a new security system, renovating buildings, or even repaving the parking lot. Check with your agent or the association itself to see what these fees will be before you buy.
The Costs of Home Ownership Include Furnishings and Appliances
You might have already thought about this, but it’s likely that your new home will be larger than where you’re currently living and might require some extra furnishing. Plus, some appliances in your home might be considered fixtures and be included in the sale price of your home, like dishwashers or ovens; other appliances are not always included. This means if the seller doesn’t want to include the refrigerator or washer or dryer, you might have to buy new ones.
You should also consider how old your home is. If it’s more than ten years old, the appliances included in the sale price might be on their last leg anyway. Be sure to budget for replacing some of those high dollar items, like your water heater or cooling system.
Cost of Home Ownership Key Takeaways
Typically, when people think about the costs of homeownership, they are only thinking about the mortgage payment. They don’t always consider property taxes, insurance, maintenance fees, and repair costs.
Though homeownership has many perks, there are some unexpected expenses to be aware of, like the ones we mentioned above. Some costs are beyond your control, like property taxes and homeowners association fees. Ensure you’re aware of the costs of homeowners insurance, especially if you live in a natural disaster-prone area.
The most costly part of homeownership relates to your house’s overall upkeep, including repairs and monthly expenses. The experts at 41 Realty Group can help you stay well informed about the average monthly costs of owning a home and help you avoid expensive surprises. We would love to help you budget your expenses and help you buy the home you want.