2016
BREAKING GROUND A GUIDE TO NEW CONSTRUCTION IN SOUTHWEST MONTANA
A SPECIAL PUBLICATION OF THE BOZEMAN DAILY CHRONICLE
Summer 2016
Staff WRITER / EDITOR
Lisa Reuter WRITER
Heidi Reuter-Lloyd Hannah Stiff DESIGN
Table of Contents Intro: Building A Home in a Tight Market.............4 First the Finances.................................................6 Working with a Realtor®......................................8 Choosing a Lot.....................................................9
Matt Gasbarre
Working with a Builder.......................................10
ADVERTISING DIRECTOR
Turning a House into a Home.............................14
Cindy Sease ADVERTISING MANAGER
Sylvia Drain
Finding the Right Architect................................ 12
Add an Outside Room with a Deck or Patio...... 17 Thinking About a Remodel?...............................18 Give Thought to Lights & Fans...........................20
Locally Owned and Operated Located in the Gallatin Valley Mall • 587-2261 HOURS: MON.- SAT. 10AM-9PM SUN. 11AM-5PM
2
Breaking Ground
Summer 2016
Building a Home in a Tight Market By Lisa Reuter
As
The Chronicle has been reporting this year in its ongoing series “How Will We Grow,” the housing market in Bozeman is tight. In March, according to area Realtors®, the median purchase price for an existing home was $349,000. That’s also the starting price for most new builds. It’s tough to build anything for less than $200,000, and there’s not much available for less than $300,000 except condos, said ERA Landmark Realtor Kim Spain. Why? Partly because the median buildable lot, ready to be connected to streets, and sewer, water and power lines, costs $84,500. In Gallatin County, the median price for lots increased
4
Breaking Ground
$35,486 between 2012 and 2015, and there’s not a lot in the $30,000 price range unless you want to build north of Three Forks past Wheat Montana. Last month, 92 city lots were available, with another 309 available in rural Bozeman and 73 more in Belgrade. Lots aren’t likely to be more plentiful soon. Since the 2008 housing crash, local builders have tended to plat subdivisions in smaller phases. That doesn’t mean abandoning your homebuilding dreams. Instead, as we advise in this issue of Breaking Ground, work with your bank or credit union on getting your finances and financing in order, then on finding your builder and Realtor, then on planning that dream home.
ssmm a lal l e rl es r mar e ra r ht om stm eers low to mid $200's
homes
Living Smaller and Smarter makes sense to those low to mid $200’s who value their time, finanaces and their flexibility. Third Street Development represented by Diane s m aSmaller l lBozeman e r and sBroker m a rGroup t e makes r canhmake o m your e sto Ingalls of Living Smarter sense montana dreamlow cometo true. mid $200's
those who value their time, finances and their flexibility. Third Street Development D I A Nmakes E ING A L Lto S those Living Smaller and Smarter sense represented bytime, Diane Ingalls Bozeman Broker /of Partner who value their finanaces and their flexibility. 406.600.1914 Third Street Development represented by Diane Broker Group can make your montana dream www.live4bozeman.com Ingalls of Bozeman Broker Group can make your come true. montana dream come true. DIANE INGALLS Broker / Partner 406.600.1914 www.live4bozeman.com
Summer 2016
First, the Finances GOAL: TO PREQUALIFY FOR A MORTGAGE LOAN. TIMELINE: SIX WEEKS TO A YEAR OR LONGER. IF YOU ARE A U.S. MILITARY VETERAN: You need a credit/FICO score
of at least 620 to qualify for a low-interest, no down-payment VA loan. IF YOU AREN’T: You need a credit/
FICO score of at least 620 to qualify for a government loan program, a credit score as low as 620 to qualify for conventional loans. You also need a 20 percent down payment. In Bozeman, that’s a minimum $60,000 to $70,000 saved or in equity in an existing owned dwelling. If you have less than that? You can put as little as 3 percent down for conventional loans, but you will likely have to purchase mortgage insurance. IF YOU ARE A FIRST-TIME HOME BUYER: You may qualify for a Montana
Board of Housing loan and down-payment assistance program.
6
Breaking Ground
GETTING YOUR CREDIT SCORE: The
three credit reporting agencies are Equifax, Experian and Trans-union. Each is required to provide you with one free credit report annually. Get those at annualcreditreport.com. Or, for a fee, from myfico.com. Take the middle score of all three as your credit score. WHAT TO DO NEXT
Gather that credit score, plus your last three pay stubs, last two months of bank statements, last two years of tax filings, monthly budget and what you think is your home price range. Make an appointment with a home loan officer at your local bank or credit union. You need to prequalify for a mortgage before seeing a Realtor® or builder. “Come meet with us at least six months before you start looking for a mortgage,” suggested Elisha Grace, loan officer with Bozeman’s Rocky Mountain Credit Union. “We can help you start working toward getting the loan that best fits your needs. And we can give information to help you work on your credit score if it is necessary.”
Summer 2016
The loan officer will help you figure out the best type of loan for you (government vs. conventional, fixed interest rate or adjustable interest rate) and mortgage terms (30, 20, 15, 10 or fewer years), then help you estimate other housing costs, including insurance and condo fees. Most local lending officers enjoy this education process. Every lending institution has different types of loans and varying loan costs. Not all offer the Montana Board of Housing loans. And every personal situation is different. You’ll want to get quotes from several lending institutions, including national home loan companies and banks, before deciding on a mortgage. YOUR VARIABLES
“I highly recommend having a personal budget figured out, so we can figure what your housing payments might look like and customize a plan you feel comfortable with,” Grace said. Knowing what your credit card, car payments and student loans cost monthly is critical. Generally, the sum of those bills plus your likely mortgage cost can’t total more than 45 percent of your gross income. A loan officer can help devise a plan to pay off or lower some bills before you apply for that mortgage if necessary. COMING UP WITH MONEY
Would-be home buyers can tap sources besides personal savings to come up with down payments. “Down payments can be gifts from family
Remodeling Home owners thinking about remodeling may be able to finance that with a loan secured by their home’s equity. Two options are: • A variable-rate Home Equity Line of Credit. The interest rate is tied to the prime rate and there’s a one-time fee. You apply one time, and can borrow and repay as needed. Maximum pay-off time is 15 years. • A fixed-rate Home Equity Loan. The interest rate is fixed and based on your credit score and length of loan (five, 10 or 15 years). There’s a loan fee. Once you pay off the loan, you apply for a new one as needed. members,” Grace said. “Or they can come from a secured fund. Car equity might count here too.” Another option is to stretch your buying/building process. “If you’re looking to build five years from now, an option is to buy and secure the land now. You can amortize that over 30 years, and the payment will be low until you build the house,” Grace said. Some banking institutions and credit unions don’t offer home construction loans, but other lending institutions do. Some builders offer construction loans that can be rolled into mortgages later, and that can be a cost savings for the buyer. Breaking Ground
7
Summer 2016
Working with a Realtor
If
where you build is most important to you, your next visit after qualifying for a mortgage is likely with a Realtor®. In Bozeman and Gallatin County, a Realtor is the person who best knows what lots cost, what’s on the market, what’s coming on the market and what’s in the subdivision pipeline. They can then guide you toward builders too. The first thing they tell you: It’s a seller’s market. The second thing: Lot prices are lower the farther you drive from Bozeman.
8
Breaking Ground
“Outside the city, you’re going to need to dig your own well and septic system, and you need to factor in that added expense,” said ERA Landmark Realtor Kim Spain. But building outside city limits could save money too, in construction costs and inspection requirements. If you wish to employ a specific architect, build a specific house plan or construct certain structures, tell the Realtor upfront, as subdivision covenants and land restrictions can affect those plans.
Summer 2016
Choosing a Lot In Southwest Montana, one of the important factors when choosing a building site is the view. That definitely affects price. Other things to consider include: • If you have children, what school district or Bozeman school your children will attend. • Most Bozeman lots are smallish, between 6,000 and 7,000 square feet. If you can find a lot that’s 9,000 square feet or more, you’re doing well. Expect the lot to cost $69,000 to $86,000. • In a subdivision, the preferred lots are corner lots or those close to parks or open spaces. • Know where the nearest emergency services (police, fire, medical) are. • Find out about any area development plans (for buildings or roads) scheduled in the next five years. • Know which direction your home will face. If you’re building a deck, for instance, you will want it to face east. A west-facing deck will get too hot during warm months. • Also consider your driveway location in relation to the roadway and the sun. You want it to receive as much sunlight as possible in winter so ice and snow can melt. Breaking Ground
9
Summer 2016
Working with a Builder
If
what you build matters most, talk to a builder soon after you get that mortgage qualification. Choose one who works with a Realtor®, and you get all the benefits of that role too. If you have a definite budget, consider choosing your builder before you select house plans or an architect. “The builder is the one who can keep you and the architect within your budget,” said Nate Nehls of Avant Building Group, who has been building homes in various price ranges in Gallatin County since 1986. He formed Avant with his son-in-law Jake Lewendal, who is certified in green building and is a practicing real estate agent. If you choose an architect first, the architect will bid out your project to several builders. “Then you’ll end up choosing a builder based on a bid dollar amount, when what you want to be doing is forming a business relationship with a builder you can trust,” Lewendal said.
10
Breaking Ground
NATIONAL TRENDS
“The trends say people want greener and smaller homes,” Lewendal said. “But what we’re still seeing statistically is homes in the 2,200 to 2,500 square foot range.” That indicates many people are planning to accommodate growing families or adult children who might move back home. Younger home builders want to be closer to downtown and will take smaller houses to get that, he added. On the green side, people are shopping for energy and water efficiencies and savings. But most aren’t yet spending large sums to exceed insulation minimums or add solar panels unless they qualify for government subsidies. LOCAL PREFERENCES
The long popular Montana or mountain modern home, known for its natural wood and stone work, is giving way to a more contemporary look that favors white finishes, metal
Summer 2016
flourishes, open shelves and wire racks in pantries. Ninety percent of people still prefer an open-living concept, but they want intimate conversation spaces rather than ever larger televisions in their living rooms, Lewendal said. Surround sound, built-in wireless systems and better planning to hide plugs and cables are in demand. Also, older people are putting fewer steps in their homes and entryways. Oil-rubbed bronze door handles and hinges and knotty alder trim are suddenly popular. “But everybody still wants a three-car garage, granite countertops, dovetail cabinets and wood floors,” Nehls said.
Choosing a Builder The National Association of Home Builders website, nahb.org, has great tips for compiling a list of potential builders and questions to ask them. You’re going to work with your builder for a year or longer, and likely do business with them again later if you decide to add on, remodel or need repairs. So interview as many as you want until you find one you trust and get along with, who answers all your questions and is committed to transparency. “Building a home doesn’t have to be a horror story. But it is a relationship,” said Nate Nehls of Avant Building Group. “Everyone thinks they’re going to be taken advantage of,” added his partner Jake Lewendal. “But really it’s that everything associated with building costs a lot.” Choose a builder who gives you a spreadsheet of what your choices cost and updates that spreadsheet weekly, especially if changes are made in-process, Nehls said. “You decide the price of the house based on what you want, and you should be able to see and keep track of those costs throughout the building process. That’s transparency.” If you want to build in 2017 or 18, it’s not too early to begin the process.
Breaking Ground
11
Summer 2016
Finding the Right Architect By Ashley Cosgriff
Un
less you are a naturalborn designer, there is a huge payoff in working
with a good architect as you build a new home. But what do you look for in an architect? Good architects are experienced, reliable and personable. They shouldn’t rush or pressure you. Ask friends and neighbors with experience for recommendations. Because the relationship is such a personal one, most home owners and architects connect through recommendations. The American Institute of Architects advises seeing out an architect whose style and working methods are compatible with the scale and type of project you’re intending. Its
12
Breaking Ground
website, www.aia.org, offers an AIA Architect Finder that generates a list of architects within a designated radius of your ZIP Code. The Montana AIA affiliate has a list of all its member firms at aia-mt.org. Once you have those lists, check individual firms’ websites to determine whether a firm’s specialties match your desires and style preferences. If the projects they highlight online appeal to you, add them to your potential contact list. When you’re comfortable with the number of possible candidates on your list, begin checking their credentials. Membership in the AIA indicates that a firm’s architects subscribe to the AIA Code of Ethics, comply with the organization’s continuing education requirements and
Summer 2016
are committed to high standards of practice and service. After checking credentials, call the top firms on your list to schedule time for a brief phone interview. During that interview, describe your project and ask whether the firms can complete it within your time schedule. If they can, request literature outlining their qualifications and experience. If they can’t, ask if they might recommend another firm. Study their materials and answers to narrow your list. Next, it’s time for a longer interview. Some firms charge a fee for initial interviews or meetings; ask about that upfront. Then schedule the meeting at the firm’s office, where you can meet all of the people who will manage your project and
get a feel for compatibility. Ask to view their portfolio and a complete or substantially complete project, about their design philosophy and what contractors they work with. Ask about their fee structure and together compare it to your budget. You want the cost numbers to match up. They should have questions for you too, about how you live, whether you have children or pets, your style, and what your timeline is. Experienced architects should give you a detailed timeline for the project. They should also aim to finish the project under budget. Ask what steps they take to guarantee this. At the end of the interview, ask for references. Breaking Ground
13
Summer 2016
Turning a House into a Home: HOW TO FIND THE RIGHT INTERIOR DESIGNER By Hannah Stiff In the era of Pinterest and HGTV, it’s easy to believe an inner design star lives in all of us. Once you’ve failed a few attempts at re-creating a trendy room, however, it may be time to call in the real-life know-how of an interior designer. Your carefully curated Pinterest boards and hours of watching design shows won’t be wasted. Bozeman Interior Designer Abby Hetherington encourages clients to come to meetings with ideas and goals. “If clients have a clear goal and direction they want to go, it helps us allocate how much time it will take,” Hetherington said. “Picking a designer is like a first date,” she added. “Interview and decide who you want to go on a second date with. You need to feel comfortable, communicate and trust
14
Breaking Ground
each other. At the end of the day, when you’re hiring a designer, it should be an enjoyable experience. It’s fun.” Those first dates, or consultations, are free. That’s when Hetherington talks budget and scope. While some clients will complete design renovations in phases, it is still important to create a master plan for the feel and look of the whole house. Otherwise it can seem like a home is being “piecemealed together.” That can cost more for additional renovations later. “At the end of day, if you want to hire a designer and let them go for it, you’re going to save money,” Hetherington said. “If you can go in and have some ideas already put together, that saves time and lowers your fees. It gets expensive if you can’t make up your mind.” Some designers charge by the
Summer 2016
hour, others by project phase. Ask your
designer about fees and charges, esti-
collaborate with people,” she said. “If
mates and final budgets, at that first
the project has anything with structural
meeting, and be upfront about your
or electrical, we partner with an archi-
budget so you understand each other.
tect. We can give our suggestions, but
I always like having another person on
During a consultation, Hetherington
“Design is always better when you
gauges how involved clients want to
board. The client only benefits from
be in the design project. At its best,
having an architect.”
a home design represents the family
dwelling within it, she said.
the builder sits in on those initial meet-
ings. After sharing ideas and goals and
To accomplish that, she encourages
Likewise, the client benefits when
home owners to add their own accent
involving key stakeholders, Hethering-
pieces and art they have collected.
ton comes up with her proposal.
Each adds to the story of the family
and their home.
consider an interior designer for the
first time, Hetherington encourages
Many of Hetherington’s clients call
Though it can seem daunting to
her before they have broken ground on
homeowners to call and ask questions.
a new home. That’s the perfect time,
“It won’t ever hurt,” she said. If the
because the designer can work with
first designer isn’t able to help, he or
other decision-makers to bring the
she will usually refer you to another.
client the best value and aesthetic.
PELLA WINDOW AND DOOR SHOWROOM 1001 West Oak Street Bozeman, MT 406-587-5944 800-292-3240 www.pellaMT.com Breaking Ground
15
Summer 2016
DAN AUGHNEY
LORI CHRISTOPHERSEN
PETE EDGECOMB
AMANDA TORGERSON
NMLS#502114 406.581.6364
NMLS#417283 406.587.7711
NMLS#405721 406.581.5431
NMLS#1083564 406.539.1251
YOUR LOCAL LENDER. YOUR OPPORTUNITY. We have a variety of construction loan products to fit your needs! A Division of Opportunity Bank of Montana™
BOZEMAN — 1455 W. OAK ST. • 237 W. MAIN ST. NMLS#412554
16
Breaking Ground
OPPORTUNITYBANK.COM
Summer 2016
Add an Outside Room with Deck or Patio By Heidi Reuter Lloyd
A
dding a patio or deck to your home is like creating another room of living space, without the expense of walls, roof or insulation. Bozeman residents can plan on using that outdoor room a good five months each year, and Big Sky residents perhaps three or so, said Bernie DelValle, assistant retail manager of Kenyon Noble Lumber and Hardware. Do you prefer decks or patios? It’s generally a question of personal preference, unless the building site is small. “We’re seeing a lot of houses on smaller lots,” DelValle said. “They don’t have a lot of living space outside, so owners just pour a concrete patio.” That’s a good place for suntans and barbecues. But most people favor decks and the ability to personalize their space. “If people are putting in a hot tub, a lot of times concrete is the way to go because of the weight. So they will pour a concrete slab. This allows you to build your deck so you can walk right into the hot tub.” A typical deck is 8 feet by 12 feet, which matches the trend toward
smaller lot sizes. “Most everybody is going to a composite decking, like Trex®, which is pretty much maintenance-free,” DelValle said. “It comes in a wide array of colors. We stock 11, but others can be ordered.” The top choices locally are the neutral colors “Saddle” and “Gravel Path” from Trex’s Select and Transcend® lines, in the Classic Earth Tones collection. Trex’s Transcend products are fade-, stain-, scratchand mold-resistant and come with a 25-year limited residential warranty. “No sanding. No painting. No staining. No kidding,” the company advertises. That’s music to the ears of many homeowners, who already have plenty of outdoor chores. Other deck options are redwood, cedar or pressure-treated lumber or engineered wood. Should you build your own deck, or are you better off hiring a contractor? “People can do simple layouts themselves. That’s a one- or twoweekend project. If you’re getting into the bigger or multi-level decks, you’ll want to have a contractor do it. Fancy ones could take a month or two.” Breaking Ground
17
Summer 2016
Remodeling By Ashley Cosgriff
T
hinking about remodeling your home can be overwhelming. There’s so much to think about. Where do you start? Will you have to move out for a time? How much will it all cost? Take a deep breath. All those questions can be answered with the proper planning and hiring the right professionals for the job. Remodeling brings many benefits, even if you are only remodeling only parts of your home. A remodel can add value and net you more money when you decide to sell. Knowing what additions or changes can add value is important. That’s another reason to consult professionals as you plan and remodel. It’s not a job for amateurs. START WITH THE RIGHT CREW • An architect with solid remodel
18
Breaking Ground
experience can help you figure what to do and how, make drawings and models and give great suggestions you may not have thought about. • A contractor or builder will help with any required permits, and provide the materials and labor to do the job right. • A designer will listen to your thought about style and provide inspiration and color schemes to tie the whole house together. PLAN AHEAD Know that in a remodel – especially of a bedroom, kitchen or living room – you may have to move out for some period during construction. Some people devise work-arounds and stay in place. But think about the effects of sawdust, fumes and noise on your children
Summer 2016
and pets. How difficult will it be to continue your normal daily routine around construction? How long will you have to do it? How much stress will that cause? Moving out may be worth the cost. Plan your budget carefully, and track it throughout the construction process. The last thing you want to do is run out of money halfway through the project. Make sure your timeline is true too, to reduce stress as much as you can. Have your architect, contractor and designer consult with each other before construction begins to get these numbers right. BEST-RETURN PROJECTS Some remodeling projects bring
much more return on investment than others, including: • A kitchen remodel, which can return 182 percent of its cost. • Window replacement. Updating to more energy efficient windows and insulation can significantly cut utility bills for you and improve your home’s desirability at resale. • A wooden deck addition, which can return 73 percent or more of its cost at sale time, especially if you have a great view. • Other remodels that add value include putting a bedroom in an attic, putting a bedroom ior game room in a basement, replacing garage doors and adding a fireplace. Breaking Ground
19
Summer 2016
In the Overhead Department, Give Thought to Lights & Fans By Lisa Reuter
W
hether you plan to remodel or build a new home, think about your lights when you think about your plans. In the beginning. Because light affects everything in the room, from mood to functionality, said Bill Fiedler, owner of Distinctive Lighting of Bozeman. In a kitchen prep area, home gym or workshop, bright white light is generally preferred. In kids’ bedrooms, warmer lights on dimmer switches can
20
Breaking Ground
calm little ones down for sleep and ease fears of the dark. We all respond physically and emotionally to the level and quality of light around us. “You wouldn’t buy a car that only went one speed or had only one volume on the radio,” Fiedler said. You want your home lights to be as flexible, providing different layers, colors and intensities of light. Work with a lighting specialist to get the right mix at the best price.
Summer 2016
LED lights are ever more popular. They last 10,000 to 50,000 hours, use less electricity, provide light without heating surrounding space and offer a greater range of light colors from gold to blue. Incandescent bulbs still have a place, but they use five times the energy. You’ll want to use them in different places. LED bulbs do cost more, and LED bulbs can differ in price by $10 or more. The best bulb is the one that best lights up your space or fixture. Some LED bulbs, for example, direct their light primarily through the top of the bulb. That’s great for an overhead light that shines down on a table, but not for a lamp that’s beside you while you read. For that, choose a bulb with wider light distribution.
FAN FACTS
Most people choose ceiling fans
in the $99 price range. You may be better served by a fan in the $250 to $500 range, and the difference isn’t purely aesthetics. The more expensive fan will have a better, more efficient motor – direct vs. alternating current – that also uses one-fifth of the energy. That’s a cost savings over time. It will also move more cubic feet of air – something you’ll definitely feel.
A more expensive fan offers more
custom options for blade color, pitch and construction. The last two again improve air movement.
SERVICE VALUE SELECTION ■
■
VISIT THE LARGEST SHOWROOM IN SOUTHWEST MONTANA
START YOUR PROJECT TODAY! 2608 West Main Street ■ Bozeman, MT (406) 586.7172
www.distinctivelighting.com
MON-FRI 9:00AM-5:30PM
SAT 10:00AM-4:00PM
Breaking Ground
21
Summer 2016
L E D
L I G H T I N G
L I G H T
C O V E R A G E
G U I D E A N G L E S
TRADITIONAL LED LIGHTS
LED FILAMENT LIGHTS
170-180˚ LIGHT DISTRIBUSTION
320-340˚ LIGHT DISTRIBUSTION
C O L O R
T E M P E R A T U R E
Color Temperature plays an important part in the overall feel of any room. How warm or cool the light in the room is has been shown to affect people’s moods and how they behave. As a rule of thumb, use cooler white light for rooms where focus and productivity are key, and use warmer white light for rooms where lesiure or relaxation are key. Neutral white light is useful for rooms where color accuracy is important. 6500K
3000K
L I G H T I N G
P O I N T E R S
1. People tend to prefer warmer light quality in homes, cooler in work areas. 2. Light quality preferences differ by person. Age and eye condition are factors. Explore the range of light quality before choosing. 3. Use dimmers throughout the house for flexibility. 4. LED bulbs vary widely. Consider: a. Will the bulb last 10,000 hours, or 50,000? b. Is it an Energy Star? c. Is it rated for vertical mounting or enclosed fixtures?
22
Breaking Ground
Summer 2016
Breaking Ground
23