Friday, July 1, 2022

Real Estate: Terms you should know, G to Z

Submitted by Lisa DiBiase

Do you “Understand” what your agent is saying? For home buyers and sellers, the real estate jargon can be intimidating.

Some people are not comfortable asking what it means, therefore I have put together a list of the most common acronyms and real estate terms we use daily!

Good faith estimate: Under the Real Estate Settlement Procedures Act, within three days of an application submission, lenders are required to provide in writing to potential borrowers a good faith estimate of closing costs. Homeowner’s insurance: Coverage that includes personal liability and theft insurance in addition to hazard insurance.

HUD: U.S. Department of Housing and Urban Development.

Inspection Waiver:
Home inspection is waived by the buyer to assure the seller there will be no haggling for repair costs.

Interest rate lock: When the borrower and lender agree to lock a rate on loan. Can have terms and conditions attached to the lock.

Listing: Brokers written agreement to represent a seller and their property. Agents refer to their inventory of agreements with sellers as listings.

Listing agreement:
A document that establishes the real estate agent’s agreement with the sellers to represent their property in the market. 

Loan application: A document that buyers who are requesting a loan fill out and submit to their lender.

Loan closing costs: The costs a lender charges to close a borrower’s loan. These costs vary from lender to lender and from market to market. 

Loan commitment: A written document telling the borrowers that the mortgage company has agreed to lend them a specific amount of money at a specific interest rate for a specific period of time. The loan commitment may also contain conditions upon which the loan commitment is based.

Mortgage: A legal agreement by which a bank or other creditor lends money at interest in exchange for taking title of the debtor's property, with the condition that the conveyance of title becomes void upon the payment of the debt.

Mortgage broker:
A business that or an individual who unites lenders and borrowers and processes mortgage applications.

Off market: A property listing that has been removed from the sale inventory in a market. A property can be temporarily or permanently off market.

Payoff letter: A written document from a seller’s mortgage company stating the amount of money needed to pay the loan in full.

Pre-approval:
A higher level of buyer/borrower pre-qualification required by a mortgage lender. Some pre-approvals have conditions the borrower must meet.

Prepaid interest: Funds paid by the borrower at closing based on the number of days left in the month of closing.

Prepayment penalty: A fine imposed on the borrower by the lender when the loan is paid off before it comes due.

Pre-qualification: The mortgage company tells a buyer in advance of the formal mortgage application, how much money the borrower can afford to borrow. Some pre-qualifications have conditions that the borrower must meet.

Principal, interest, taxes, and insurance (PITI): The four parts that make up a borrower’s monthly mortgage payment.

Private mortgage insurance (PMI):
A special insurance paid by a borrower in monthly installments, typically of loans of more than 80 percent of the value of the property.

Purchase and Sale Agreement: A real estate contract between a Seller and a Buyer who have agreed to specific terms on a specific listing/property.

Special assessment:
A special and additional charge to a unit in a condominium or cooperative. Also could mean a special real estate tax for improvements that benefit a property.

Under contract/Pending: A property that has an accepted real estate contract between seller and buyer.

VA: U.S. Department of Veterans Affairs.

Walk-through: A showing before closing or escrow that permits the buyers one final tour of the property they are purchasing.

Agents have a big responsibility to handle your largest asset in most cases, please always have open communication to understand what your options are. As I have said before, please call a local REALTOR for all your real estate needs no matter how big or small. We are trained professionals here to make your life easier. It's best to surround yourself with the right team of professionals that can continuously give you the right advice for all your circumstances. <

Lisa DiBiase is a Broker/Owner of Landing Real Estate. She and her company represent buyers and sellers and is your trusted partner for all the years to come. For all your real estate needs contact Lisa at 207-653-0823 or lisa@landinghomesmaine.com

Friday, June 24, 2022

Real Estate: Why septic inspections are so important

By Carrie Colby

Are you wondering how septic inspections work? If you are buying a home with a septic tank, there are some things you need to be aware of. If you are selling your home, you could need an inspection of the septic system. 

What is a septic system?

Before we work through what you need to know about a septic inspection, it will be important to have at least a basic understanding of what a septic system is and how it works. Most septic systems consist of a septic tank, a distribution box, and a leach field. Septic tanks assist in digesting organic matter and will separate floatable matter such as oil, grease, and solids from the wastewater.

A septic system that is functioning properly will discharge the liquid from the septic tank to a distribution box to perforated pipes that are buried in a leach field. The pipes are designed to release the wastewater into the ground slowly.

Buying a home with a septic system

If you are purchasing a property with a septic system, you should find out a few things about it and the maintenance. Knowing how old the home is and when the system was last inspected or pumped will help you see if there are more likely to be problems.

Other questions to ask should include if there has been any standing water near or above the tank and problems with backups. Also, find out about any repairs that have been made to the tank or leach field and when.

You will want to hire a septic inspector to really make sure the system is functioning correctly. Spending the money on this type of inspection should ensure you don’t get surprised by a large bill soon after you’ve moved in.

If problems are found during a septic inspection your real estate agent should help you negotiate the repairs to be made by the seller or funds reimbursed to you to have the repairs made. These repairs can be a few hundred or more costly thousands of dollars.

Selling a home with a septic system

When selling, you should really consider having a septic inspection before the sale, especially if you have not given your septic system a thought in years. If you do know of a problem with your system, you need to disclose it to the buyer. If problems are discovered with the septic system in the process of selling your home, it is likely the costs will be your responsibility, though this can be negotiated with the buyer.

What is done during a septic inspection?

There are three things a septic system inspector will check during an inspection including the integrity of the septic tank, the proper function of the distribution box, and a leach field that is working as intended.

If all three of these components are working correctly you will have passed the septic inspection.

A septic inspector will open the septic tank and look around visually. The inspector will also open the distribution box and check to see that it's functioning as intended and dig a hole in the leach field to inspect it as well. A good septic inspector will have a camera they will send into the system that will allow them to inspect the entire system thoroughly.

How much does it cost to inspect a septic system?

The cost of inspecting a septic system will vary depending on a few factors, including your location. The size of the tank which is generally either 1,000 or 1,500 gallons will also have some bearing on the cost. You can expect to pay a few hundred dollars. This can be the best money spent when buying a home. I have personally seen new systems fail that were not installed properly. Never assume the septic system is working just by looking at the property and that the seller has disclosed there are no issues.

How long do septic systems last?

On average a septic system will last from 20 to 50 years. Being a real estate agent, I have seen septic systems fail sooner as well as last longer. If you take care of your system, it will last longer. <

Carrie Colby is a Broker with Allied Real Estate, 909 Roosevelt Trail in Windham. She can be reached at 207-232-5497.

Friday, June 17, 2022

Real Estate: Living the Dream in Vacationland

By Nicole Foster, Broker/REALTOR

Homes listed and sold for $1,000,000 or more are going under contract faster than ever before with the demand for luxury homes in Maine ever greater.  

In recent years we’ve also experienced an increase in the number of investor-owned properties which are rented for both short- and long-term use. Maine was recently reported to lead the nation in the number of vacant properties according to 2020 US Census Data with one fifth of the housing stock vacant for at least a portion of the year with the majority of that used seasonally for recreation or as a second home. Maine’s most premiere lakes, located only minutes from Portland where prices for the most expensive 1% of homes has grown by 27 percent, offer some of the most exclusive waterfront to be found.

Raymond: Happens to be where you will find the most expensive home listed and sold in the entire state of Maine last year selling for $8.5 million. The two previous years the highest-priced homes in this town sold for around half of that amount.  With so many pristine lakes and ponds with waterfront homes scattered throughout Raymond, homes listed and sold in the $1 million to $4.8 million range grew from eight properties in 2019 to thirteen in 2020 with tight inventory in 2021 limiting to 12.

Naples: The cost of owning a lakefront retreat in this town has soared in recent years unable to keep up with the huge demand.  In 2019 the highest sale here was for just under one million dollars while 2020 saw four homes selling between $1,000,000 to $2,000,000.  Last year prices continued to climb hitting $3,200,000 as Naples most expensive home sold with several homes selling for over two million and several more between the $1,000,000 to $2,000,000 price points. 

Windham: After only three days on the fiercely hot summer market of 2021 Windham’s highest priced listing located on Sebago Lake went under contract selling for $2.75 million. Homes which were listed and sold for above the $1 million mark rose from two homes in 2019 and three in 2020 to five last year with two exceeding $2 million compared to 2020 when the most expensive Windham home closed at $1.575 million or in 2019 for $1.6 million.

Standish: The demand for luxury waterfront homes which are located here has continued to grow and last year we saw the most expensive home sold jump from $1.490 million in 2020 to $2.722,500.  During 2020 only one home sale exceeded the $1 million price point with none the previous year but in 2021 that number reached ten properties sold.

Casco: Homes with private lake frontage have steadily climbed from $827,000 and under in 2019 to five properties selling between $1 million and $1.8 million in 2021. This trend is likely to continue here with a growing number of people choosing to make Casco their home or vacation spot.

Sebago: Limited inventory is likely the reason the highest sale for 2021 here was for $985,000 following 2020 when three homes sold for more than one million dollars and the highest sale of 2019 being $1,400,000. 

Bridgton: The real estate market of 2021 has blazed a trail including eight homes selling more than one million dollars with Bridgton’s most expensive home sale of the year at $2.95 million. This is over the previous year’s highest sale of $1.78 million with four other homes selling in that range and one in 2019.

Harrison: In early 2019 a rare 48-acre parcel on Long Lake with 1,500 feet of frontage topped the market at $5.1 million with three other properties selling over one million. Last year jumped from two homes selling in the low $1 million range in 2020 to seven homes in 2021 with the highest closing for $2.2 million.

Frye Island: This completely seasonal island normally has a limited number of sales, but we can see those numbers doubled in the market of 2020 with an increase to overall sales with several homes having sold between $1 million and $2 million. It is smart to move swiftly on a property of interest located here with most homes having a low number of days on the market in 2021.

Some of this echoes the effect of the overall increase seen in home sale prices, but it also undoubtedly shows that high end homes are moving now that we have more buyers for them. Sellers are wise to leverage the current market conditions and buyers should seek out an area specialist to assist in finding their Vacationland dream home in the Sebago Lakes Region.

Data sourced from Maine Multiple Listing Service. <

Nicole Foster is a Maine native and Windham resident with sixteen years of experience assisting home buyers and sellers who loves real estate and people Nicole@locationsinmaine.com or 207-615-7558.

Friday, June 10, 2022

Real Estate: North Windham sewers will benefit environment, commercial development

By Larry Eliason

The prospect of a public sewer coming to North Windham in the next few years is a welcomed initiative. North Windham is poised for well-managed and directed growth and a public sewer system will complement all the plans that have been made such as the Comprehensive Plan and the 21st Century Downtown Plan for North Windham. 

The addition of public sewer infrastructure in North Windham will certainly help protect Sebago Lake, other lakes and ponds, rivers and streams and the aquifers all around us in Windham.   Frankly, I think this is the absolute right time to approve a public sewer system and then take all the necessary steps to make it a reality over the next three to five years via the partnership the town has with the Portland Water District and obtaining federal funding to assist with the cost of this infrastructure.

North Windham is well recognized as a retail and service center for the Sebago Lakes Region.  We have a good base of local businesses, but we do not have nearly enough manufacturers that provide really good paying jobs and that pay a good portion of commercial real estate taxes to help with the balance of residential base and the commercial tax base.  

I believe that sewer infrastructure will help attract more companies that need higher per gallon sewerage capacity.  These companies will offer good paying jobs and pay their fair share of commercial real estate taxes.

Companies looking at Windham will also be looking at housing for their employees.  There are quite a few apartment and condo projects in the pipeline for North Windham that will hopefully take some pressure off the current demand. 

However, Windham currently has a Growth Ordinance specifically for single family homes.  Unfortunately, the Growth Ordinance has, in my opinion, contributed to Windham having a housing shortage.  The median price point for a home in Windham is currently $ 450,000 to $475,000 price range. 

If you limit building permits like Windham does, builders are going to build houses with a higher price and better profit margin as another permit for a second or third house package may not be available.

My point being that as soon as Windham residents pass the sewer initiative, we as a community should immediately ask our Town Leaders to rescind the growth ordinance and get single family housing options back that are more affordable for Windham residents.  I think a price point of $300,000 to $350,000 is a lot more palatable.   

This goal may require some zoning, density and minimum lot size changes. In Windham, like a lot of other towns, residential home building permits and all the related fees that go with a new home help pay the bills.

Adding sewer infrastructure is a high priority and an instrumental piece of the puzzle to again attract and also retain companies that offer good paying jobs and pay their fair share in commercial real estate and personal property taxes.

Windham like most other towns has lots of challenges ahead such as managing traffic flows, but Windham also has a bright future with well thought out plans in place.

I encourage all Windham residents to get out and vote on June 14.  I also encourage all Windham Business Owners and Residents to engage their Town Councilors on topics like the Growth Ordinance.

Larry Eliason is a Commercial Broker with Butts Commercial Brokers and is President of Windham Economic Development Corporation (WEDC).

Friday, June 3, 2022

Real Estate: Navigating this hot real estate market

By Matthew Trudel

Both buyers and sellers have plenty of things to deal with in a market that has houses selling for $25,000 to $50,000 over the asking price.  I even know of a couple of houses that went for almost $100,000 over asking price. How do buyers and sellers navigate such a crazy market?  Both should start with finding an experienced real estate broker to work with to assist them in achieving their real estate goals. 

How do you go about selecting the correct real estate agent for the job? 

Here are a few things to consider when making that decision and going through the selection process:

Almost everyone knows a handful of realtors.  The number of new agents over the last several years has increased significantly, even throughout the pandemic.  Experience and knowledge are some key things to look for when selecting a realtor to work with.  Try to find a real estate agent who knows the area in which you are looking to buy or sell.  Again, I would like to bring up experience as a key factor. 

There are so many things that come up in any transaction from problems in inspections, negotiations, legal documentation and/or financing problems.  Having the experience to negotiate and solve those problems can be the difference of a successful transaction or one that falls apart.  So, find a real estate broker who you are comfortable working with and get the process started.

Sellers are mostly concerned about the value of their home and the  price they should list their home for sale.  This is where it gets a little tricky and knowing the area and what the pulse of the market is in that area are crucial.  In the old days we would list homes a little over what we thought they were worth or would likely sell for.  Then wait for an offer to come in or slowly drop the price over time. 

That doesn’t work anymore in this market and is not a good strategy to get you the most money for your home.  Pricing it accurately and getting the most potential buyers at your home in the first few days is the correct strategy.  This creates more demand, more competition and produces higher offers generally well over the asking price. 

The number of potential buyers in relation to the listing price correlates very similar to a pyramid.  The higher the listing price the fewer the number of potential buyers will come see your house.  Raise the price a little more and that number of potential buyers shrinks a little more. 

Eventually, as you consider raising the listing price, you would run out of buyers altogether. This is what we call pricing yourself out of the market.  Buyers in today’s market are much too savvy and knowledgeable with all the technology out there with regard to home valuation.   However, when there is a lot of competition and interest in a home, the knowledge they have is used to try to outbid each other creating multiple offers well above the asking price.

Buyers right now do not seem to mind that the interest rates have ticked up a little to around 5 percent or slightly over that.  Inventory is still low even with all the new construction going on.  Buyers need to be prepared and ready to go as soon as a property hits the market. 

Your real estate broker should be working closely with you and your mortgage broker or lender, so everyone is prepared to get the offer in when you find right home.  It is likely going to be a competition between several buyers and yourself and having an experienced broker who has been through the process for years can give you the edge over other competing offers.

The highest offer is not always the best offer, so there is lot more to negotiating an offer than just increasing the price.  I have written several articles over the years about different strategies that can be successful in competitive markets like this one.  Sometimes it can be as simple as writing a short letter to the seller explaining a little about yourself and why you like their home and having your realtor present that letter along with the offer.  There are a lot of other things I like to incorporate into putting together my clients’ offers and all of that research has to happen quickly with time being of the essence. 

If you would like to learn more, feel free to give me a call to set up a confidential meeting.  <

This article was written by Matthew Trudel, Broker and Owner of Five Star Realty, Windham. Call 207-939-6971.

Friday, May 27, 2022

Real Estate: Three factors to consider before coverting attics into livable space

Submitted by Kristin Piccone

At the onset of the pandemic, many homeowners found themselves in need of more usable space in their home; whether being required to work from home OR home-schooling their children, millions of working professionals suddenly found themselves setting up shop at kitchen tables or islands, in alcoves, garages or even walk-in closets. Those makeshift offices were never supposed to be permanent, but as companies loosen workplace policies and embrace full remote or hybrid working arrangements, professionals are seeking more permanent home office solutions.

Home additions are a possibility for homeowners who need more usable space, but add-ons may not be the right option for everyone. If adding-on won't work, homeowners may want to look up ... at their attics.

Attics with ample space can make for ideal home offices or classrooms, as they're away from the hustle and bustle of a home's main floor. That can make it easier to concentrate when everyone is in the house and reduce the likelihood that video calls with colleagues, clients or teachers will be interrupted.

Attic conversions are not always possible, and the following are three important factors homeowners may need to consider before they can go forward with such projects.

1. Dimensions: Both the renovation experts at This Old House and the real estate experts at UpNest indicate that at least half of a finished attic must be a minimum of seven feet high and seven feet wide and 70 square feet. Requirements may differ depending on where homeowners live, but that 7-7-70 guideline is generally the minimum requirement. An attic that fails to meet such requirements won't necessarily be a lost cause, but it might be costly to make adjustments that ultimately align with local codes.

2. Access: Access is another aspect that must adhere to local safety guidelines. Many attics are accessible only through pulldown ladders, but that will have to change if homeowners repurpose their attic spaces. A staircase that complies with local laws will need to be installed, and contractors can work with homeowners to build that and estimate the cost. Homeowners who simply want to put desks in their attics without going with full-fledged conversions are urged to adhere to local access requirements anyway, as they're intended to ensure residents can safely escape attics in the case of a fire or another emergency.

3. Climate control: Attics are converted to provide residents with more livable space. Converted space is only livable if the climate within the attic can be controlled so it's cool in the summer and warm in the winter. An existing HVAC unit needs to efficiently heat and cool an extra room. If it can't, bills might spike because the rest of the home likely won't be as comfortable, forcing homeowners to adjust thermostats to offset that discomfort. That also could affect the unit's life expectancy. Before going forward with an attic renovation, homeowners should contact HVAC professionals to determine if attic spaces can be serviced with the existing units and ductwork, or if an alternative arrangement must be worked out to make the spaces livable.

Attic conversions can be great ways to make existing spaces more livable. Homeowners considering such projects should pay attention to three important variables as they try to determine if attic conversions will work for them.

If you find that an attic conversion will NOT work for you and you want to start the conversation about selling your current home and/or buying a home that will meet your needs, do not hesitate to reach out to me today!!

Kristin Piccone, Broker, at Landing Real Estate 207-951-1393, kpiccone@landinghomesmaine.com

Friday, May 20, 2022

Real Estate: How to be a winning buyer in today’s real estate market

By Richie Vraux

What I tell my buyers in this market is simple. You are in a hurricane of buyers all around you, be patient, expect to be let down, and most likely you will lose some properties before you are the winner of your next home. You have to stand apart from the other, several buyers looking at these same homes. 

First- Get pre-approved. There is a difference between getting pre-qualified and pre-approved. A prequalified buyer is one that has been given an estimate of the amount a buyer could qualify for, based on their current financial situation from a lender. This is usually a fast estimate from a lender based on what is told over the phone.

A pre-approval is a much more detailed review of your financial assets and debts you really have. A pre-approval letter from a lender is much more widely accepted in accompanying an offer today. Before looking at homes get one of these because most agents will not bring you to properties without one.

You have to be on the fast-track and aware that there are 50 other potential buyers waiting to buy this home- so be prepared!

Another winning method is the inspection clause. While I always, always, always recommend my buyers to have a home inspection after you go under contract, some agents are winning these offers by foregoing the inspections process to stand out over other offers. This can be very dangerous to buyers but some are willing to accept this in order to be the winning bidder.

Another method is writing in an appraisal gap addendum. What this means is that the buyer is willing to make up the difference if the bank appraisal comes in short from what the contract states.  The buyer will need to make up the difference. If the buyer is lucky enough this will not happen.

So, your offer meets the asking price, but the buyer is approved for way over asking price. The buyer may choose to write an escalation clause. This is a means of bidding higher than your offer without coming in way over on price.

This addendum allows, that if another offer comes in higher than your offer, this addendum allows you go higher in increments to beat the higher offer.

Example: your offer is $400K on a certain property, this addendum automatically allows you to incrementally increase the price by $1,000 up to, let’s say $475K so the other offer is $460K. Your accepted offer would be $461K.

Team up with a good broker who knows your wants and needs and knows the neighborhood. Listen to his/ her advice and you will be in your new home before you know it.

There are many ways of being creative to put you at the top of the offers, but it always comes down to the highest and best offer. And remember, cash is always king.

In my 25 years in this business, I have never seen a market like the one we are in today.       

Richie Vraux is a broker/ Realtor with Better Homes and Gardens-The Masiello Group, 76 Tandberg Trail, Windham. Call Richie if you need real estate advice 207-317-1297 or by email at richardjvraux@gmail.com <