Friday, March 15, 2019

FSBO - Good idea or bad?

By Kevin Ronan

What is a FSBO? No, it is not a strain of the flu or an invasive plant growing in our lakes. FSBO stands for For Sale By Owner. A seller has decided to market and sell their own property without the assistance of a local Realtor®. The most common reason for selling your own property is the desire to not pay a realtor's® commission and saving thousands of dollars in commissions is very attractive. However, many FSBOs also suggest their desire for  greater control  of scheduled buyer showings and open houses, listing activity, price negotiations, security and closing activities.

Are you considering going FSBO? With so much information online, how easy could it be to snap some pictures, write a property description and post online? The most common methods of marketing the old fashion way include yard signs, word of mouth with friends and family, open houses and advertising in local community publications.

In 2017 The National Association of Realtors® reported that FSBO sales accounted for only 7% of all residential sales. Why is it so low ? 

Experts agree, the number one reason is because the FSBO properties were priced too high for the market. By preparing a Comparative Market Analysis (CMA) with the assistance of a local Realtor®, they can help you understand the local market conditions and recommend a suggested list price. It is also reported that sellers do not have the time or the resources to market the property themselves. 

Incredible to believe that just under 50% of all FSBO sellers reportedly did nothing to market their property. A combination of poor listing visibility and lack of multimedia marketing resulted in low buyer traffic.

In closing while FSBO does work seamlessly for some sellers, that route is not for everyone. Carefully weigh your options and consider if you have the time, resources and emotional strength to go this route alone.  In the end, if you don't have the time and resources, then consider seeking a local Realtor®, who can help you with the market rate and marketing so that your property can be sold quickly and with expertise.

I hope this article sheds some light on the challenges you face when you follow the FSBO path.  Please contact me or your local realtor if you have any questions. 

This article was brought to you by Kevin Ronan, Associate Broker® affiliated with Alliance Realty, 290 Bridgeton Road, Westbrook .For more information, contact Ronan by email at or by phone at 207-838-4855


Friday, March 8, 2019

How to buy a house when you have one to sell

By Nicole Foster

If you thought that the processes of being a first-time home buyer was complicated then just wait until you join the ranks of repeat buyers! The majority of people will need to sell their current home in order to qualify for financing to purchase another property. Paying two mortgages each month is not something that everyone is in the position to attempt or sustain for very long.  I am often asked how this process works and I know that there are even more people who are curious but are not asking me, because the very thought is so overwhelming with helping people buying and selling at the same time.

Using one Realtor® to assist you with both the sale of your current property and the purchase of your next one can help to streamline communication and expedite the overall process. Even the most experienced and top-notch agents will have only so much control over the many variables which will need to be synchronized and move in concert, but together it can be accomplished!

Your Realtor® will help you to identify the range of market value for your current home, which combined with other factors will determine how much you will be able to afford. Explore what your financial position will allow you to consider doing with a trusted lender and weigh the pro’s and con’s of each option. There are inherent pressures that will inevitably come with each decision, so you will need to prepare yourself for how the byproduct of your decisions will impact your judgement, ability to negotiate and your motivation. If you are carrying two mortgages, will you feel inclined to settle for less on the sale of your current property? How will you be competitive when buying if you find something you really want? Selling your current property then moving into a temporary rental will make your offering power much stronger as a buyer, but it may not be the most cost-effective option because moving incurs expenses and you will be doing it twice. For many it is not only the expense but also impractical to store their personal property often elsewhere and provide the necessary resources for two moves. of the instruments available to us is to make an offer which is contingent on the sale of your current property. This will allow you to look for and make offers on properties of interest while staying in your current home.  Some people do not feel comfortable having their current property listed until they have found suitable housing, out of concern for being temporarily displaced and not wanting to move twice. If you have decided to wait until you find a suitable property before listing, the seller will most likely want to know the details surrounding the upcoming sale of your current property including: Where is your property located and which agency will you be listing with? What will the list price be, and do you have a clear marketing plan in place to get a quick contract? If the seller is willing to work with you during the sale of your current home then you will need to be prepared to get your home on the market typically within 5 calendar days of the agreement, so working with your Realtor® to develop a strategy in advance is essential.  In some circumstances an agreement can be negotiated with the buyer of your current property to allow you to rent back or remain in the home for 60 or 90 days while you continue to search, which can help to relieve a bit of pressure.

How will being under contract as a buyer impact my negotiating ability as a seller?  What happens if I get a contract on my house before I find something? Will I feel rushed into purchasing a home that I otherwise would not choose? Having a very clear Plan B or worst-case scenario plan will help to give you a bit of space and relieve some of the pressures when making tough decisions. If you are purchasing a newly built home or build package you may want to have an idea of what you are going to do should inclement weather or labor shortages cause the process to fall behind resulting in being temporarily displaced. You might be able to negotiate a certain amount of time to secure suitable housing, but you are then requesting a concession so it may cost you in other areas depending on the buyers’ necessary timeframe to close and move in. Your Realtor® can help to reviews the pro’s and con’s of disclosing this strategy when listing or waiting until negotiations with buyers. If you are under contract on the purchase of your next property you will need to be prepared to price your home more aggressively. Often you will be provided 30 days to get a contract on your current property and an additional 30-45 days to close depending on the financing of all parties, but these are terms and conditions which will need to be negotiated.

One of the most challenging maneuvers in this intricate dance following sucessful negotiations is to keep the timeframes moving along for both Property #1 and Property #2 concurrent and parallel on things like building inspections for both homes, negotiations for repairs and appraisal inspections for both homes. Scheduling the necessary professionals, how much they will cost you and understanding what their turnaround time for reporting will be is absolutely critical. Your Realtor® will assist with all of these details or handle them on your behalf. With grace, a certain amount of skill and an insane amount of luck; more often than not, we are able to hold back-to-back closings at the same table on the same day for both properties, but it is always a good idea to discuss what you may need to do in the event of a delay on either side.

Nicole Foster became licensed in 2005 and is a Broker with Locations Real Estate Group in Falmouth and resides in beautiful Windham with her family. Call, text or email with any real estate related questions.

Friday, March 1, 2019

The whys and hows of investing in multi-units

By Katie Kinney

Purchasing a multi family property can be an important first purchase in your real estate portfolio. By doing this you will produce more income and build your net worth faster. As an investor you may be interested in adding to your real estate portfolio and creating larger yearly rental profits. Keep in mind buying a multi-unit will require increased responsibility, liability and usually more capital reserves. Below are some tips to help with your due diligence and decision-making.

Choose the right professional to help guide you through the process. Buying a multi unit can be overwhelming and having a broker who is qualified and experienced in investment property transactions will make your purchase seem a lot less stressful. An experienced broker should have knowledge of local rental markets, physical aspects of buildings, be able to understand the financials and explain cash flow analysis. starting out as an owner-occupied investor. If you purchase a building with two to four units you will qualify for owner-occupied financing, requiring a smaller down payment. If the property is the right investment, the other units should help cover the expenses, allowing you to save money and keep your debt to income ratio lower for your next real estate investment.

Make sure to ask for all relevant documentation, current rent amounts, lease terms, utility expenses and any building maintenance costs. You should also become familiar with the vacancy tendencies in the location of the property. You don’t want to purchase a building and have lengthy periods in which your units are vacant. As a landlord you will need your leases to be sound and protective of you and your investment. It is a good idea to have an attorney look over your lease to make sure you are legally protected if any tenant related issues arise.

A multifamily property is not valued the same as a single-family property. A multifamily property is valued by its income and return on investment generated. You will need to consider the income and expense of the building and what is left over, this is called the net operating income. To determine your cap rate, you divide your net operating income by the purchase price. Generally speaking, four percent to 10 percent per year is a good investment.

You should keep adequate cash reserves. Unexpected events occur all the time when being a property owner. These events can be very expensive, especially if you own a larger rental property. The general rule of thumb is that you should have enough cash set aside to cover 2-3 months of mortgage payments. Many investors also hire property management companies. This may be appealing if you do not live in close proximity to your property. The fees for a property management company range from three percent to 10 percent of the rental income.

I have successfully helped many clients buy and sell investment properties during my career as a real estate broker as well as owning personal investment properties. Whether you are a first-time homebuyer interested in owner occupied properties or a seasoned investor, I have the skills and knowledge to facilitate your transaction. Feel free to contact me anytime to learn more about investment properties.

Katie Kinney, Broker Landing Real Estate 
Cell ~ 603 205 2276

Friday, February 22, 2019

Things your real estate agent wished you knew

By Mel Oldakowski

Buying or selling a home can be a lengthy and complicated process. Real estate agents complete classes and training to learn how to navigate this process best, hone their negotiation skills and learn the tricks of the trade. Years of experience teach industry best practices and how to avoid common pitfalls associated with the transaction process. There are inevitably misconceptions about the industry that real estate agents find themselves explaining to client after client.  Here are a few key points agents wished more people knew before starting the process.

-   It's best to find one agent and stick with them throughout the process.  Find an experienced Realtor® that you connect with, trust and work exclusively with them. You will get full attention from an agent if they know you aren't asking five other agents to work with you too.

-   Zillow is not for consumers. Websites like Zillow were not intended for consumers to use as their primary home search tool. They have no way to report correct numbers such as sales and what your property is worth. You’re better off getting the help of an agent who has access to the MLS (Multiple Listing Service), and in turn accurate comparable properties. “Zestimates” are often inaccurate and buyers will often find old data on the website!  Life is not an episode of HGTV.  HGTV has some great shows with some great design ideas for your future home. However, what you may not know - especially in today's market - is that homes don't sit on the market for weeks at a time like on the show, and they also won't accept 10% below listing price. Many of the homes shown are ones that have been on the market for quite some time, this is why they have so much time to pick between three of them.  When you see a home you like, make an offer quickly!

-  The lender you choose to work with is as important as your offer. When it comes to lending, the cheapest lender is not the best lender. Service and performance matter as well as experience.  Finding a lender that closes on time and is there to answer questions during ‘non-business hours’ is critical to keeping the deal together.  A good lender will help you understand your credit and sort through the best options.

-   Understand that there are costs and processes involved before closing. Many people don’t realize that purchasing a home involves earnest money, inspection and appraisal payment all usually out of pocket before you get to the closing table. Saving up before you start your search can help you prepare for these expenses!

-  Don’t change your financial situation before closing – seriously. Your debt to income ratio is extremely important when being approved. Be careful after you’ve been approved not to make big purchases (think appliances, furniture, vehicles) or open new lines of credit. 

-   Listen to your Realtor®’s advice – they negotiate for a living. They are there to offer the full range of expertise, help you negotiate the best deal and make the process as stress-free and enjoyable as possible. That means when they say to price your home a certain way, you should heed their advice.

To summarize, good agents want to leave you better off than when they found you.  We chose real estate as a means to support our families but just as important, is our use of real estate as a
platform to help people.  Together, we do our best to make a positive difference in peoples’ lives every day, whether that be enjoying that special property, getting top dollar from the sale of a home or a great ROI (Return on Investment).

Friday, February 15, 2019

Nicole’s real estate market outlook for 2019

By Nicole Foster

Many hopeful home buyers have recently been provided a bit of relief when the Federal Reserve voted to leave interest rates unchanged and indicated they are in “no rush” to raise rates in 2019. A newly revised forecast released by Freddie Mac also predicts 30-year fixed rate mortgages to average below 5 percent for the next two years, which is excellent news for a spring market that has become very conscious of any indications of rate increases. New mortgage applications of home buyers reached their highest level since 2010 in the week ending January 11, 2019, which was 9 percent higher than the previous week, according to the Mortgage Bankers Association. This combined with stabilizing home prices and recent increases in new construction inventory should finally help to ease some of the significant pressures buyers were faced with in the competitive seller’s market of 2018.

For the first time in many years, we could actually see income gains outpace the increase of home
prices, according to National Associations of Realtors® Chief Economist.

Sellers who have not yet listed may wish to leverage these market conditions which are now more encouraging for prospective buyers to make their move by preparing their homes to list in advance of the influx of spring competition to the market.
Many of us are experiencing a growing backlog of would-be sellers who are unable to find what they
are looking for with inventory still tight. Each day I speak with more and more real estate agents who are echoing this same sentiment where prospective buyers who are also would-be sellers, are at a standstill in their current home unable to find something suitable so they can sell their current property. It seems as though the list just continues to grow with every passing week. This is just one reason if you are looking for a place to buy on your own online then you are not necessarily aware of the properties which are coming soon, so you are at a bit of a disadvantage. Let a full-time broker help you to scout out upcoming properties and opportunities through their ongoing weekly networking.

In spite of the tension and uncertainty we are currently experiencing in our world right now, more people are moving to Maine than are leaving and almost every indication signals that the real estate market of 2019 will continue to be strong. There may still be snow on the ground and in the forecast but in real estate, spring may be loosely defined as “after Superbowl” and just like clockwork, we are already beginning to see an increase in activity with almost regular predictability this week. 
Considering what options may exist for you and your family this year? NOW is a great time to call a local experienced broker to schedule a time to discuss!!

Nicole Foster is a broker with Locations Real Estate Group who lives in Windham,

Broker, Realtor
Locations Real Estate Group
190 US Route One
Falmouth, Maine 04105
(o) 207.805.1811
(c) 207.615.7558
Nicole Foster
US Route One
Falmouth, Maine 04105
(o) 207.805.1811
(c) 207. 615. 7558

Friday, February 8, 2019

The ABC’s of Commercial Real Estate in Windham

By Larry Eliason

Commercial real estate in Windham is in many ways very similar to residential real estate as it is a tangible asset you can see and touch. It is, however, very different in terms of how it can be valued by Broker® or appraiser, owned, financed and ultimately used by a commercial business entity.

Location is key since many commercial real estate tenants and owner users are looking for specific sites for high visibility, signage, traffic count, ample parking for customers and employees, as well as, sewer capacity for restaurants, daycares, salons, breweries, commercial kitchens, etc.

Other than a very small area in the South Windham Village that has public sewer, the rest of Windham is private septic systems. This is currently a limiting factor for attracting some types of businesses to the town due to the “high cost” of large private septic systems.

Zoning is a key factor in the decision-making process. Windham has a variety of zones that allow some level of commercial activity. The C1 commercial zone is one of the most popular zones as it allows the widest variety of commercial uses including construction services. It is also one of the more expensive zones for commercial real estate.

Other zones that allow some level of commercial uses are; C2 commercial, C3 commercial, ED (Enterprise Development) zone and I (Industrial) zone. There are currently on-going discussions with the Town Council, Economic Development, local business owners and citizens about adding uses such as construction services in other zones in Windham such as the C3 zone. The ED zone and the I zone may also be considered as the Town seeks to attract larger employers that could add a stronger commercial tax base and good paying jobs. It is a good idea to pay attention to Town Council, Planning Board and Zoning Board of Appeals actions as those actions can have an impact on value. the valuation process, the comparison of similar properties sold can help gauge value on a per square foot basis.  Most of the time, commercial real estate is valued on an income approach; income less vacancy allowance, less other expenses, gives you a net operating income (NOI). 

Dividing the NOI by a cap rate such as 10% capitalization rate (debt and equity), will give you an estimated value. And of course, the underlying condition of the building(s), location such as Rt. 302 exposure and possibly a corner lot at a signalized intersection, quality and length of leases all are factors when you are considering the purchase of a commercial real estate property.

Just like buying a home, you need to make sure the property is in compliance with town ordinances, state law and in some cases federal law. As part of your due diligence investigating the property, you should meet with town staff in code enforcement, planning and assessing to “trust but verify” any information you have received from the seller or seller’s representatives.  And, I always recommend that a new business or developer coming to town take the time to meet with the Town of Windham’s Economic Development Director to look for tools that may help make a deal happen in Windham.
Buying commercial real estate as well as leasing commercial real estate requires some added work with professionals. You should consider engaging a seasoned commercial real estate professional for a property search and due diligence.  In many cases, you will also want to engage a legal professional, accountant - tax specialist, land surveyor, civil engineer and possibly other specialty engineers depending on the size and scope of your commercial real estate project.

Just like in school, “Do your homework.”

This article was brought to you by Larry Eliason, a commercial Broker with Butts Commercial Brokers in Raymond and serves the Greater Sebago Lakes Region.

Friday, February 1, 2019

Determining value versus pricing in 2019

By Matthew Trudel 

It’s that time of year again, when everyone is getting anxious for spring, filing taxes and thinking about perhaps purchasing a new home. If not for the first time, it might be a second or third home. It might be that you are thinking about selling your current home, so you can make that move to a bigger house or the house on the water that you have always wanted.

Whatever the circumstances are, both buyers and sellers are thinking about how to prepare and when to start the process. Start the process today, this market is not slowing down in 2019.

For both buyers and sellers, the first step is selecting a Realtor® to help guide and assist you.  Locating the right professional who listens to your real estate needs and has the experience and knowledge to successfully meet those goals is imperative. I have written numerous articles on this process and would be happy to email them to anyone who would like more information on some of the things to be looking for in a real estate professional.

Determining the value of your home is one of the top questions we are asked from sellers. They want to know what the value is, how much is it going to sell for, how long is it going to take to sell and what it’s going to cost to make all this happen. Without a crystal ball a couple of those questions can only be answered by experience, research and an educated guess.  Let’s focus on determining the value of house. value can be calculated several ways, and for the record, Zillow is not one of them. Looking at what similar style homes sold for in the past six to 10 months is one way of determining the value. This is what we call a market analysis. The key here is to be sure you are looking at SOLD houses, similar in age, condition, style, acreage, location, amenities, and much more. Houses that are currently for sale are not what you want to use for determining the value of your home.  Those houses can help with determining the pricing of your house, but not the value. The pricing of your home and the value of your home are two different things.

When working with buyers, I do the same process for houses they might be interested in purchasing. We put together a market analysis on the value to be sure they are not overpaying for the house, unless that home offers something that is unique to them that they find value in that other buyers may not. Value in this situation is based on what someone is willing to pay and what personal value they place on the house or extra amenities. Having a Realtor® with years of experience can help you with placing a value on those unique amenities.

Determining the list price after you have a solid grip on the value of the home is very important.  The amount a seller is willing to accept is part of the equation, and so is what a majority of people would be willing to pay for the house. Another important factor is what the competition is asking for other homes. All of these play a factor, as does the number of potential buyers.  Overpricing a home will greatly reduce the number of potential buyers, sometimes by over 50 percent.  Talk with your Realtor® and remember that having an accurate and realistic value is crucial when listing a home. 

Matthew Trudel is owner of Five Star Realty in Windham and can be reached at 207-939-6971