Being gouged in Gardiner, MT?

Question

I am seriously thinking about buying a property SFR, in Gardiner MT.  Over the last year, the prices have absolute skyrocketed!  I am not sure why??  Last year I was looking at a house for $180 and now the lowest downtown is $340 for a 2 br that could possibly become a 3 br.  I think because I am from out of state I may be taken advantage of.  The bank told me $1200 for an appraisal! What is the standard commission for a RE agent? I was told they do 50/50 split (like CA) but then I was told usually seller pays all commission?  Im looking for an honest RE agent....  Gardiner has not many building restrictions, so it is risky.  I find it a charming town & I believe I would like to rent it out long term for a year or so, then move in when I retire.

Thoughts?  I am getting a loan from a Bank in Livingston but interest rates have gone up as well.  Any precautions, advice about buying out of state?  I am putting an offer in and then going to MT to see the property, if I get it.  There is a feeding frenzy, for whatever reason, here and in Bozeman.  Can someone help me clarify whats going on in this area and why everything is so crazy in the RE market?  I don't want to be taken advantage of....but it is beautiful....

Thanks kindly to all!  Gayle

Michael Rutkowski · Answer

As Egan has mentioned, out of state investment has really driven prices through the roof. Locals with property have all been cashing out equity, and the ensuing feeding frenzy has been just about as active as in 2006ish, if not more. Currently, Bozeman is getting a large influx of money and investors, and Big Sky has picked up since their bankruptcy (this is fascinating to read about if you have a moment). So when a geographic area has a lot of exposure, people are cashing out, demand is very high, and supply is low, this is what you get. A lot of businesses have been started in the northern GYE as a consequence of this rush (including mine).

I'm a licensed agent, and investor. When out of state investors contact me, in the roughly 2 week period between their contact and arrival in own, the properties have turned over, and there are new ones on the market. More properties will start popping up around mid-May to mid-June. If you'd like me to keep an eye open for you, let me know. I also do LTR/STR property management in case the winters get rough.

Sales commissions range from 4-7% depending on the type of property. SFR are about 5-6%, and brokers negotiate who pays for what between agencies. $800 is what you should be paying for closing. Tell the title company that their price is too high, and you have been shopping around. Don't let your agent steer you to "their" title company and insist that the agent shops around for you (I would for you). Land and multi-million dollar properties are either a set commission or very low percentage (1.5-2.5%).

I just bought some commercial property right near Gardiner, about 20 miles up the state highway. If you need someone to hold your hand through this, I can help you at every step, and have references from out-of-state investors like yourself. There are deals, but by the time you find them on Zillow, you are too late.

Are you adverse to building a home? That would drastically open up your opportunities, and you will have that equity once you are done. Look at a comparable home to build, calculate at minimum $200/sq ft plus development costs and land price, and that difference is your instant equity. That can be appealing to some investors... Anyway if you do move here, you will be a neighbor of mine, so welcome to Montana!

Final Note: Gardiner might not be your best option for SFR. The demographics there are seasonal workers, full-time park workers, and the supporting staff required to keep the town and park running. Gardiner does have a nice SFR neighborhood, but as you're seeing, people aren't just letting property go anymore. They know they can get crazy rental income at 100% occupancy, at any time of the year, so why would they sell at a lower price? The demand around Gardiner will never be fulfilled because of things like land use regulations, lack of develop-able land, and large landowners surrounding almost all sides. As a consequence, prices will always be a bit higher out there. They may decrease a bit with a correction, but as long as development is limited there, it will always be in demand (It was expensive in 2002, when I first arrived in that town as a seasonal employee in YNP). Just outside Gardiner, you can find more options. I would suggest visiting Gardiner in the winter. It is a breathtaking place to live, and I love it, especially the silence (as opposed to Bozeman). It is very dead in the winter. You have a lot of snow-mobilers, and an occasional tourist on a stay-cation from the surrounding communities. Many businesses shut down in the winter. I know many areas of Paradise Valley, just north of Gardiner, which are much more affordable, have amazing views, are closer to civilization, and could possibly fit your needs better (size of home, amenities, etc that an older home in Gardiner won't have). Paradise Valley is surrounded by the Greater Yellowstone Ecosystem of 22 million acres, so you get all the benefits of living near the park, without all the regulations and negatives of park living (no dogs in the park, no mountain bikes, no off road vehicles, and many more regulations).

Egan Lohman · Answer

Hi Gayle!

Honestly - you and I are the reason :).  I moved back from CA last year.  Seriously though, there is a lot of out-of-state interest in MT right now, especially in Bozeman, and it's having an obvious effect on housing prices.  There is also a shortage of labor and lower-income starter-homes being developed.  The Yellowstone Club is pumping a billion dollars into new development and infrastructure (over the next 10 years) up towards Big Sky which is pulling a lot of local labor up that way.  Montana has gotten national attention and is no longer a hidden gem.   I am surprised Gardiner has inflated as much as you say though.  I did not expect that.

As for a real estate agent, I'm no help there for Gardiner.  But your information is correct.  Commission is usually 6% split and seller pays.

Hope that helps!  Oh, and I just used Guardian Title in Livingston and was happy with them.

Egan Lohman · Answer

Thanks @Josiah Pisel - you are correct - I was thinking inspections!

Josiah Pisel · Answer

@Gayle Eisner - I would agree with just about everything these two have weighed in on. However, I believe that @Egan Lohman may have misread appraisal for something else... Appraisals are running about $700 for Bozeman, Livingston, Big Sky areas. I am not sure if they are the same down in Gardiner but wouldn't be the least bit surprised to find out if they are more as I am sure that there are no appraisers in Gardiner. $1200 does seem excessive, however, they are about 6 weeks out and are as busy as they want to be here without having to drive down to Gardiner...

I've been watching the Gardiner market a bit over the last couple years and prices have really taken off there as well. National Park towns tend to be a bit more on the expensive side but Gardiner has run out of develop-able land. The word on the street is that they are trying to do a land swap with the feds in order create some more buildable land...

Gayle Eisner · Answer

what is the best way can I contact you?

Gayle Eisner · Answer

$1500 appraisal fee? Gouged.. can u recommend some lenders? What is your phone number? I could use a bit of guidance here...thank you!

Egan Lohman · Answer

Oh, and as for a lender - Caroline Roy at Prime Mortgage Lending in Bozeman is THE BEST!  Flat fee, so professional.  Not sure if they work in Gardiner though.

https://primemortgagemontana.com/caroline-roy-bozeman-lender/

Egan Lohman · Answer

@Gayle Eisner - oh yeah, forgot about that one.  No, that is way too high.  That should be more like $150.

Gayle Eisner · Answer

Hi Egan:  Thanks for your input.   $1200 for a property appraisal???!

Being gouged in Gardiner, MT?

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