In an effort to avoid the bidding wars that can add tens-of-thousands of dollars to the price of a Missoula home, a real estate firm and team of developers over the weekend completed a unique drawing that saw 19 homes sell for the asking price.
Gillian Edgell, an agent with Glacier Sotheby’s International Realty, brought the Hellgate Village property to Edgell Building and Hoyt Homes three years ago.
The subdivision has been in the works ever since and Phase 1 development is well underway off Mullan Road and Flynn Lane. The initial phase includes 19 housing units, and when the drawing period closed among qualified buyers, Edgell had received more than 50 applications.
“Of the 19, we’ve got 15 under contract and we’re working through a couple others right now,” Edgell said on Monday. “It was a wonderful way to do my job, making those phone calls to let people know they’d been drawn.”
According to the Missoula Organization of Realtors, around 83 homes have sold in the Missoula urban market this year at a median price of $438,500. Just two years ago, the median price of a Missoula home was $300,000, according to the organization.
With home prices soaring and the city’s housing supply critically low, many buyers have been forced to engage in a bidding war for a property. Agents across Missoula say it’s not uncommon for buyers to pay tens-of-thousands of dollars over the initial asking price.
“Everyone is so tired of being beat out time and time again,” Edgell said. “We’re basically telling people if they can’t offer $50,000 to $60,000 over asking then it’s probably not worth going.”
With construction now underway in Hellgate Village, the first batch of homes are slated for completion this spring. But instead of accepting multiple offers on a single property, Edgell held a drawing of qualified buyers to avoid any bidding wars and artificial inflation.
Those who were selected during the drawing were pleased to pay market rate, Edgell said.
“I had some people cry they were so excited,” Edgell said. “I tried to be very communicative with everyone in the process. Some people who were offered the first time around declined, but we expected that. We were able to go back through on Saturday to let some new people know.”
The Hellgate Village development took months to win City Council approval and it’s just one of several projects unfolding west of Reserve Street. But thus far, only the initial 19 homes in Phase 1 of Hellgate Village entertained a drawing and sold for the asking price.
While it remains unknown if the drawing process will catch on among builders, Edgell said the real estate industry came to embrace the concept as a matter of fairness, even if it seemed odd at the beginning.
“I haven’t heard a negative thing,” Edgell said. “People are initially a little resistant to change and something new. I’ve gotten in front of a lot of realtor office meetings in town and talked through the process. It was important to me to get the cooperation and participation of all our agents.”
Several homes associated with Phase 1 will be ready for occupancy this spring and others will follow throughout the summer. Phase 2 could begin later this year, though Edgell said it remains to be seen whether another bidding process takes place.
“We’ll have to see at that point whether it makes sense to do a drawing or try something else. It has to be a fluid process,” Edgell said. “We are going to have this inventory crisis for the foreseeable future, so I hope it’s a model that people will entertain.”