Friday, February 24, 2017

House hunting mistakes by Rick Yost



Buying a home is an exciting and emotional experience.  Our homes make up such a big part of who we are and how we live.  It is important to not let your emotional side lead you into house buying mistakes.  It is very easy to get caught up in the moment and the excitement of buying a home; but it’s essential to put emotions aside and make the most rational decision possible.  After all, you will be there awhile.

There are several common mistakes that home buyers make when dealing with an emotional decision. By being aware of these mistakes and avoiding them, you will be much happier in your home in the long run.

Don’t look at homes you cannot afford.  It is easy to fall in love with a home that is 10, 20, or even 30 thousand dollars beyond your price range; but this puts you in a position of stretching to buy a house you love. Often this leaves buyers “house poor” - a term used to describe having a home payment so large that you cannot afford life’s other pleasures. If your budget allows for a $1500 per month payment, but you fall in love with a home that requires a $1800 per month payment, sacrifices must be made. Some of those sacrifices may be more than you want to make after living in your home a few months.

In a market that is hot like, Windham is right now, it might be necessary to make an offer quickly.  Do not let the need to make a quick offer rush your decision.  Ask your buyer broker to monitor any offers and request a day to make an offer. Sleep on the proposal you want to make and make a rational decision the next day.  This allows you to contemplate living in the house and the home’s true value to you.

The second part of decision making in a hot market, is to not offer too much. There is a ton of competition out there for well-priced homes. It is easy to get caught up in a bidding war on a desirable property. You can find yourself in a position of having a home under contact that will not get the appraised value necessary to close the loan. You can also find yourself regretting overpaying for a home. While sleeping on your offer, determine the absolute highest price you are willing to pay for the home you are considering - and do not go over that amount if a bidding war ensues.

The flip side of that situation is getting too deliberative in your approach. Some people freeze when it comes time to make such a big decision. When a market is hot, you will not have weeks to decide whether to make an offer or not. Well priced homes can be under contract before you even make an offer. This is an important time to rely on your buyer broker to help you make a rational decision.  A good buyer broker should be able to intelligently speak to how long the home will be on the market and what a good offer-price would be. They will not always be 100% correct, but they should be able to speak from experience in similar situations.

Another emotional mistake that buyers make in a hot market is to get desperate. They start assuming that there is nothing better out there and want to jump at the very next house they see, because they haven’t found what they want yet. New houses come on to the market every week. A buyer broker can create an auto search that notifies home buyers when a new home hits the market that fits the criteria they are looking for. This is a very important tool in a hot market.  It is easy for a home to go on the market and already be under contract before a buyer is even aware of it if they are not on an auto search.

The last emotional mistake buyers make that I will talk about is: Overlooking serious issues and overestimating how realistic they are. It is easy to get caught up in a hot market and make an offer on a house that does not really meet your needs. It is also easy to say you are willing to commute for the right house - until you start driving it five days a week. You may think that you don’t need to be near schools - until your kids start activities.  The second part is: Saying you can change out windows, fix a porch, or repair anything else.  These decisions turn into nightmares after moving into your new home.  Make sure that home is what and where you want and any repairs that you plan to do yourself are in your skill set.

If you avoid these emotional mistakes when buying your home, you should have a pleasant buying experience and avoid home buyers regret.

Rick Yost is a realtor, real estate author, and a long-time Windham resident.  You can reach Rick with any of your real estate questions or needs at:  rickyost63@gmail.com

Friday, February 17, 2017

What to disclose when selling your home by Lisa DiBiase



It is important to understand as a seller, what is required by law, for you to disclose when selling your home. You are not required to disclose everything that could possibly be at issue with your home. Importantly, Maine doesn’t require you to hire an inspector or verify the information disclosed in your form. Rather, you are required to disclose only defects that you knew about when making the disclosure.  

Maine Rev. Stat. Title 33, § 173 states that: “The seller of residential real property shall provide to the purchaser a property disclosure statement.” There are 4 areas of issues with the home that Maine's Legislation has identified the seller must disclose. These include: (i) the water supply system; (ii) the insulation; (iii) the heating system; (iv) the waste disposal system; whether any hazardous materials (like asbestos, radon, or lead-based paint) is present in the property; and (v) any other known defects with the home.

While there is no one required form, the Maine Association of Realtors has created a sample form titled “Seller's Property Disclosure” that contains all of the required information that you must disclose to the buyer. Understand, that you cannot simply add an “as is” clause to the purchase contract in order to escape your disclosure responsibilities under this statute.

The work and upgrades sellers have done to their property are a common disclosure, whether the work was done with or without permits. If done with permits, buyers are advised to cross check the seller’s disclosure, with the city building permit report. Doing work without the city signing off with a permit, is a key disclosure. If the work was not approved by the city, it may not have been performed to code and may cause a fire or health hazard. Buyers should independently investigate any non-permit work that was done.

In most markets, disclosure documents are provided to buyers once the seller has accepted their offer. In addition to their inspections or loan contingency, the buyer has an opportunity to review the seller’s disclosures. If the buyer discovers something negative about the property through disclosure, he can usually back out of the offer without losing his escrow deposit.
Bottom line: If you know it, disclose it. If you try to hide something, it can come back to bite you long after the sale and it is just not worth it.

Lisa DiBiase is a Broker/Owner. She and her company represent buyers and sellers in the Greater Portland Area. For all your real estate needs contact:  lisa@landinghomesmaine.com.

Friday, February 10, 2017

Home inspection! Good idea or bad? By Kevin Ronan



The home inspection process is intended to inform the buyer as to the condition of the home’s structure, safety, and systems.  Equally as important, the Home Inspection Report is a tool used by buyers and REALTORS to address any deficiencies in the home during the property negotiations.

Today, most home buyers will get a home inspection on a property they are about to purchase. Not only do home inspections protect your investment from any surprises, but if you need financing, the lender will require it. One of the first steps is to hire a professional home inspector. Your REALTOR and The Greater Portland Board of REALTORS can assist you in the names of area home inspectors. A thorough home inspection can identify defects you may not be able see such as wiring in the walls not being up to code, high radon levels or even lead pipes.

You have just learned from the Home Inspector’s Report that there are some significant deficiencies. Ok, now is not time to panic! Remember, an inspection is not a pass or fail process and should not be an afterthought. The inspection is meant to provide the buyer with knowledge of unknown deficiencies. When reviewing their findings with you after the inspection, the home inspector may use terms such as, “not to code” or “past its useful life”.  Be familiar with both of these terms. When my family purchased our present home, the inspector reported the furnace may be, “past its useful life”. We replaced it soon after we moved in. In addition, a thorough home inspection should also include marginal deficiencies - requiring future repair or maintenance. By all means ask questions when you meet with the inspector so you can fully understand the recommended repairs 

As you are preparing an offer, consider what issues were disclosed in the pre-sale inspection. Do you want any of them addressed by the seller? Sellers may also consider a pre-sale inspection, and in some instances it just might be worth the expense. For instance, if you have an older home - you may be unaware of some problems. A home inspection will allow the seller to disclose defects that were taken into consideration when pricing the property at fair market value. Also, a home inspection may uncover minor, inexpensive fixes that you may consider fixing in order to ask more for the property. 
Finally, major problems such as: the electrical system, the plumbing, roof, mold and HVAC can all be addressed before you are under contract. This may eliminate a drawn out negotiation, a cancelled contract or having to significantly reduce your selling price.

Here are some final thoughts. You are very handy and may be considering conducting the inspection yourself. This may be a very risky decision! The home inspection is one of the last lines of defense to protect a buyer’s investment. If you are a buyer you want the confidence to know you are purchasing a safe, sound home for your family. A home inspection is worth the expense. If you are a homeowner, try to prepare for a home inspection in advance. Your REALTOR can help you navigate through the home inspection process.   

Kevin Ronan, Associate Broker affiliated with Alliance Realty, 290 Bridgton Road in Westbrook, brought this article to you. 

Friday, February 3, 2017

How to maximize your selling potential during winter By Carrie Colby, Broker/Owner of Premier Properties



Some say winter is the worst time to sell a home. Given the cold and stormy weather we have been experiencing, there are definitely challenges, but don’t be discouraged. First impressions and lasting impressions are key to progress the potential buyers into active buyers. Be very wary, as the slightest discomfort or issue can sour this experience and turn a buyer away from your home - but by addressing a few key areas, any winter woes can be easily avoided. 

Here are a few simple tips to maximize the showing potential of your home during the winter months:
It’s storming or just post-storm, but you have showings booked for your home. (You must have motivated buyers to go out in that weather!) Don’t make it even more of a chore for them, be sure to shovel your drive or walkway so that the first impression is a clean and accessible entry. Buyers have been known to turn away, rather than hike to the doorway in knee deep snow and risk snow in their shoes, wet pants, and wet socks.  

Make sure the path to the lockbox is clear. If you are using a lockbox for real estate agents to enter your home, make sure they can get to it without tromping through the snow.
Clean gutters, and make sure there are no places ice dams can develop. You want to demonstrate to a prospective buyer that you are meticulous about maintenance and that spring won’t uncover surprise issues that require repairs.

Offer information about systems that can’t be inspected. If the roof is covered by snow, an inspector may not be able to get a good look at it. Offer prospective buyers information about when the roof was installed and any previous inspections. Offer to put money in escrow for repairs that can’t be completed in winter.

Remember, buyers are usually viewing more than one home at a time, and thus traveling around and running in and out of cars. Typically they will be dressed for the great outdoors, so although having the heat way up is great for lounging on the couch; it can be oppressive for visiting buyers. Be sure to monitor the temperature of the entire house and set it appropriately.  

The winter months also mean shorter days and less natural light. Be sure to have adequate lighting in every room. Dark rooms are depressing when coming in from the cold. Keep it bright in the winter. Some may object for energy saving reasons, but it is best to leave all the lights on before showings or use timers. This allows you to set the mood lighting, and saves the buyers fumbling for light switches.  Remember: first impressions.  Is your home a sanctuary or an oasis from the cold? 

Be sure to prepare for those wet and snowy shoes and boots. No one likes having snow and dirt tracked around there home by shoes or wet socks, just as no one enjoys having wet socks and dodging puddles in the doorway.  Be sure to have a “Shoes Off” sign. Place an absorbent mat protecting your stone or wood flooring. Be sure to have a shoe tray or appropriate storage area for shoes, not only to avoid the puddles but to show off the organization of your home.  Apply this also to winter jackets, hats and scarves. Show functioning and organization by thoughtfully arranged set ups, don’t just have outerwear exploding out of closets or haphazardly hanging on hooks or coat racks.

Friday, January 27, 2017

How home improvement projects impact the value of your property By Nicole Foster, Broker

The art of property valuation requires skill and experience. Opinions of a “range of value” for a particular property can vary, which some homeowners find confusing and frustrating. A current snapshot of your local real estate market will generally cover the activity over the past 180 days in your geographic area. Many appraisers and realtors focus on the data available on the Multiple Listing Service (MLS) and not necessarily on all transfers recorded.  There is no way of placing a value on raising the quality of your life and satisfaction with your home; therefore,  if you will not be selling for the next 15 years, naturally, the resale impact will be less pertinent than if you plan to sell your home in the next 5 years.

Some home improvement projects may add to the appeal of your home for some buyers, such as an in-ground pool - but may not have as much impact to the market value.  Other projects may actually have a negative impact on your home’s value. For example: Knocking down a wall and losing a valued bedroom or built-in audio/visual electronics, which may grow obsolete quickly and become an added cost to have removed.

Cost does not equate the increase in value. A $40,000 kitchen renovation does not mean your home’s value will be increased by $40,000. That is not how any of this works. You may be surprised to learn how much impact to your home’s value a renovation will actually yield.  Do your research on which home upgrades will generate the highest return on your investment. To help identify your budget spending, contact a realtor or an appraiser as a first step to help you to determine the market value of your home. After knowing the market value of your home, you can then factor a percentage of the home’s value as an upper limit that you would be willing to spend on a specific home improvement project or upgrade.

DIY or hire a contractor? Buyers can spot shoddy work at first glance, which can cast doubts on the integrity of the work throughout the property. Before saving yourself some money by searching YouTube, consider your level of resources, skill and ability to complete the project(s).  Even with the proper construction permits, work which was not completed by a professional can have a negative impact on both the appeal and value of your home. It may be possible to do a portion of the work yourself while hiring out other parts.

What types of improvements should you make to your home first? Before focusing on the more exciting cosmetic upgrades, it is wise to first confirm, that the structural and mechanical components of your home are functioning properly. You should be sure they are not in need of repair or replacement, especially if you plan to sell your home in the future. Buyers know what the expected, usable life is of: Heating & plumbing, electrical systems, roof shingles and leech fields; and they know that they will have to deal with these issues. This can impact both the value and the appeal of your home.  Improvements which require maintenance, such as central air conditioning or irrigation systems, may require more upkeep than buyers wish to take on.
 
The National Association of Realtor’s 2015 first ever “Remodeling Impact Report” ranked these improvements as projects likely to add value for resale (highest to lowest):

Exterior
New Roofing
New Vinyl Windows
New Garage Door
New Vinyl Siding
New Wood Windows
New Fiber Cement Siding
New Steel Front Door
New Fiberglass Front Door

Interior
Complete Kitchen Renovation
Kitchen Upgrade
Bathroom Renovation
Add New Bathroom
New Master Suite
New Hardwood Flooring
HVAC Replacement
Basement Conversion to Living Area
Attic Conversion to Living Area
Closet Renovation
Insulation Upgrade

Finishing a basement is a great way to increase your living space - but do not make the rooms over personalized in function if you want it to appeal to the masses on the resale. Valuation on finished basements varies, based on quality of finish, grade, natural light, ceiling height and more. Finished basement square footage brings less value than above-grade, finished square footage. A garage can be expensive to construct - but here in Maine, it can be very desirable. If adding a two car garage with a single door, confirm that there will be enough space for the number of cars it’s designed for, to be parked and entered at the same time - so you do not risk having an appraiser identify it as being only a one car garage when it’s time to sell.  Expanding your outdoor living and enjoyment by adding a deck to your yard or a patio? Those precious ninety days of the year could be spent scraping and staining your deck – potential buyers may view it that way.  So, you may want to consider stepping up to the plate and use composite, maintenance free decking.

Seeking out the advice of trusted professional is always a great first step when it comes to your largest asset. So take your time and do your homework, to maximize your return and limit costly surprises.

Nicole has been a real estate broker at Regency Realty in South Portland for the past 11 years; specializing in single family, residential and new construction.  She lives in Windham with her husband and four children. Follow Nicole at www.facebook.com/sellingmaine/ or nicolefoster.mainelistings.com