Looking at buying a home? 'Get off the sidelines'

In the first 45 days this year, a third of all home sales in the Flathead Valley tracked by Northwest Montana Association of Realtors' Multiple Listing Service were foreclosed properties.

That's the word from Kristi Bruyer, a Realtor with Chuck Olson Real Estate in Kalispell.

Only a year ago, Bruyer added, real estate agents rarely if ever dealt in foreclosures.

"We have very few agents that are now specializing in foreclosures," she said.

It's her specialty and she's observed enough to come up with some trends and tips for people in the market for a house.

According to Foreclosure Free Search Inc., which operates a foreclosure Web site, Flathead County currently leads Montana in the number of foreclosures. As of Wednesday, the Flathead had 66 foreclosures in the works, 47 preforeclosures and four sheriff sales.

By comparison, Yellowstone County - home to Montana's largest city, Billings - had 42 foreclosures, 19 preforeclosures and three sheriff sales.

The first priority for any homeowner stressed from the sinking economy usually is to avoid foreclosure, even if he or she must take a cut.

But the buyers are there, she said - both before and after a foreclosure. She deals with Canadians interested in Montana homes, investors, landlords looking for fixer-uppers, and Flathead clients looking for homes of their own.

The number of days a home listing spent on the market before it sold used to average around 120 to 150 days, she said.

"Now they stay in that range if they're priced right," she said, "but a lot longer if they're not priced right Don't cut yourself out of prices higher or lower than what the bank approved you for."

She pulled a few examples out of her files.

One home was on the market 80 days before selling for $162,700, which was $12,200 below the asking price. Another home listed at $154,500 was on the market just 28 days before selling for $140,000. Yet another was on the market 100 days before the price dropped from $229,000 to its final selling point of $195,000.

At the end of January, she turned up 47 bank-owned properties - foreclosures - in a quick search of the Multiple Listing Service. She found 27 listings identified as possible short sales - in which the owner accepts less than the amount owed on a home to get it sold and the bank forgives the rest.

"The moral of the story is you can expect to offer a lower offer on a foreclosed home than is listed, but within reason," she said.

Mike Smith, real estate manager at Glacier Bank, said more foreclosures are coming on the market.

"We get a common request" from mortgage-shopping customers, Smith said: "Do you have any foreclosed properties?"

The Kalispell bank's portfolio held only two in the final days of March, but that's up from zero in 2008.

"Two - that's the sum total," Glacier Bank's Executive Vice President and Chief Credit Officer Dennis Beams said. "Most likely more will be coming, with the news in the paper over the weekend of 12.2 percent unemployment. It's going to get tougher before it gets better."

Trustee sales, in which a person still owns the home but the bank has ordered a sale to satisfy delinquent payments, can be risky, Smith said. People can show up on the courthouse steps with a check in hand and leave as the new homeowners, but it's buyer beware.

"The owner still can use it and nobody can come look at it. The seller can wreck the property," sometimes out of frustration over losing the home, he said. "So you are better off going and buying a home you can see."

Wait until it's back on the market and listed with an agent, he advised.

Both Smith and Beams said it's a good time to buy. There's a $7,500 first-time homebuyer tax credit this year, the Mortgage Forgiveness Debt Relief Act of 2007 that waives taxes on the amount of debt forgiven in a short sale, and plenty of housing inventory.

And, for well-qualified buyers, rates are low.

"We're closing some loans for four-and-three-quarters percent, fixed for 30 years," Beams said. "It's a good time for people to refinance and borrow But you want to be confident of your income stream."

"The thing we've seen more than we would like, of course, is people on the fence," Beams said. "They're not sure, they say, 'Let's wait and see what happens.' [The buyers' are being tentative. In part, maybe they're concerned about their own employment status. In part, they're thinking prices may go lower."

Cal Scott, Kalispell Realtor and executive director for an educational effort called Encouraging The Homeownership Ideals for Communities, backed up the claim that buyers are in a good position now.

"There are many good, safe lending programs available and now at the lowest rates in 40-plus years with a large inventory at the lowest/reduced pricing we may ever see," Scott said.

People with a stable job or a nest egg should be in the market, he said. "If you can safely buy now, you'd be a fool not to."

There still are "industry predators out there," he said, warning about one- to three-hour for-profit sales prospecting programs.

So Scott teamed up with Community Action Partnership of Northwest Montana to offer a series of homeownership education programs at Flathead Valley Community College. Call 756-3832 or 885-6318.

Beams said he sees signs of hope for the housing market.

"Some custom builders have jobs now. Land prices, labor prices and material prices are lining up. They're getting competitive bids from builders," he said.

A number of custom builders already are starting their spring work building homes for people who intend to live in them. "It's definitely lower than in a normal year, but we're seeing some action."

Still, foreclosure properties are the way to go for some, Bruyer said.

"A lot of the foreclosures coming up are [financed by] out-of-state banks," she said. Be cautious, she advised, but be aware of the opportunities.

"The bottom line is that houses are selling now but they've got to be priced right," Bruyer said.

"Houses are selling and houses are moving, so get off the sidelines."

Reporter Nancy Kimball can be reached at 758-4483 or by e-mail at nkimball@dailyinterlake.com