Friday, June 18, 2021

Real Estate: Waiving inspections?

By Kristin Piccone

It is no secret that we are well into a seller’s market across the nation. Record low mortgage rates, record low home inventory are some of the contributing factors to this competitive real estate market. More times than not, buyers are experiencing multiple offer situations on more than just one occasion. Depending on the property and the buyers experience, knowledge and comfort level, inspections are being waived~ but is that the smart choice? 

When I represent a seller in a real estate transaction, I always explain that there is more than just price within a purchase and sale agreement (P&S). A learned trait in presenting offers to my seller clients is to, “start from the bottom”. In today’s world, there are five pages to a P&S. Within, there are many conditions and contingencies, and price is on page 1. To give my seller clients a full understanding of the offer, I start on page 5 to ensure they are fully aware of its contents and not just waiting to hear the price; other conditions is on page 4, seller concessions is on page 3, financing is on page 3, due diligence or inspections is on page 2, and finally, price, earnest money and closing date are on page 1.

Previously, I have explained to seller clients that an inspection waiver could be “worth its weight in gold.”

Now, where it is more and more common to have several offers with the same waiver, it can make for a more difficult decision and the other contingencies are taken into consideration.

For example, amount of earnest money deposit, non-refundable deposit, seller concessions, financing type and down payment, to name a few. The point here is, that it may not always be in the seller’s best interest to accept an offer just because of an inspection waiver. Looking at the other contents of the P&S and having a clue as to the strength of the buyer is really what I would recommend. With this, you know that all parties are aiming to reach the closing table and you, as a seller, are giving the buyer an opportunity to learn more about the home and how to maintain it.

A seller is able to have their home pre-inspected prior to listing their home actively in the Multiple Listing Service (MLS), as well.

Personally, I love coming across a home that has been pre-inspected, for my buyers, and, I always recommend to my seller clients that it is an option that they can take advantage of if they have any uncertainties or unknowns and do not want to face any surprises later on in the transaction that could impact the sale altogether.

When I represent a buyer in a real estate transaction, I learn about them, their knowledge and experience in regard to real estate. If I am working with a buyer or investor who has purchased real estate a time or two, and maybe they are going to renovate anyway, it may not be as bad, if they decide to waive inspections.

Any other buyer, on the other hand, shouldn’t always react and waive the inspection. There are strategies, even, that I have experienced where a buyer can have an inspection of the home, however, let it be understood by the seller that unless there is a structural, health or safety concern, you, as the buyer are simply looking to learn more about the home and what it may need for maintenance.

During what is the largest transaction in one’s life, if a buyer can have their fair share and opportunities at the home( i.e. due diligence), they feel much better during the transaction and can make other negotiable items go that much smoother further along in the transaction.

If you have any questions or want to talk about how you can be competitive in this market as a buyer or seller, I am always happy to help!

Call and text friendly 207-951-1393 or email: kpiccone@landinghomesmaine.com. Be well and I look forward to hearing from you soon! <

Friday, June 11, 2021

Real Estate: When will the market slow down?

By Matt Trudel 

That is a question many people are asking these days.  How long can this market sustain at this increasing pace it has been on?  Market values have been escalating consistently for the past 4 years and the last year and a half we have seen a solid 15 to 20 percent increase.  This of course means it is a great time to sell and cash in on your equity, but you have to have a place to live.  Renting may be an option if you can find one.  Just like the supply of houses on the market are low, rentals are hard to find.

The number of buyers that are out competing for homes is at an all time high because the inventory is so low.  More companies have learned that having employees working remotely is cost effective, and this has led to a lot of out of state people purchasing homes here in Maine.  The more buyers competing drives up the price and it turns into a bidding war.  A year ago, approximately 20 percent of homes would sell for more than the listing price.  This past month over 57 percent of homes sold for more than the listing price.

In order for things to slow down we really need more inventory.  There are a lot of houses being built right now, but most of those are already under contract.  Even with the cost of building materials skyrocketing, builders have no problem selling new homes.  Getting a building permit is a different story, especially in Windham.  That’s another article for another day perhaps.  Well, let’s just give you a quick explanation of what is slowing builders down.

In Windham, they only hand out a certain number of “Growth Permits” per month.  You need a growth permit in order to be able to turn that into a building permit.  The growth permits are not handed out on a first come, first serve basis.  It is done by a point system method.  If you are a resident of Windham, you get more points for every year you have been a resident.  I know someone from Casco who bought a lot in Windham in February to build a house on.  Early March he applied for a growth permit, and today he still doesn’t have one.   That’s four months he has been waiting, and the cost of building his house has gone up probably 20 percent.  He should be finishing the final touches and moving in, but instead he just has to wait while others get their growth permits because he lives in Casco.

I do not see any slowing down of this market anytime soon, and definitely not this year and it is very unlikely to slow down next year.  The demand is just too strong right now, and interest rates are still low.  When interest rates get up around 6.5 percent, that will likely slow things down, but we are a couple years away from that happening in my opinion.

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

Friday, June 4, 2021

Real Estate: Your guide to homeowners associations

Submitted By Richie Vraux

A homeowner's association, commonly referred to as an HOA, is an organization of community residents that establishes and enforces community property rules. Typically, HOA members reside in a condominium complex, a planned community, or a subdivision of single-family homes. Buyers who purchase a home within an HOA community automatically become HOA members subject to rules and regulations under the HOA guidelines.

What is the Purpose of an HOA?

The main purpose of an HOA is to establish community goals that benefit residents and implement rules and regulations that provide community safety. An HOA is responsible for managing the community's business affairs and budget, overseeing community projects, and maintaining communal areas for residents.

Most HOA organizations are made up of a group of board members and community residents. HOA residents usually elect a Board of Directors that includes a president, vice-president, secretary, treasurer, and auditor. The Board of Directors is responsible for enforcing community rules and regulations under HOA covenants, conditions, and restrictions.

In smaller HOA communities, the Board of Directors may appoint a property management company or onsite property manager to handle duties and collect fees from residents. State HOA laws and community regulations mandate regular meetings to discuss association policies, budget, and finances.

What are Covenants, Conditions, and Restrictions?

All HOA rules and regulations are outlined in Covenants, Conditions & Restrictions (CC&Rs), governing bylaws for HOA members. CC&Rs are legally binding documents describing guidelines on home and property modifications. Common regulations cover:

  • Exterior paint colors
  • Roofing types and colors
  • Lawn maintenance and landscaping
  • Fencing and exterior structures
  • Outdoor trash receptacles
  • Recreational vehicle parking
  • Family pets

If homeowners don't follow CC&R guidelines, they are usually issued citations and fines by the Board of Directors. Typically, CC&Rs are given to all homeowners with their closing paperwork on the home's purchase.

What are HOA Fees?

All HOA communities have mandatory fees paid by residents to make sure there are available funds for special projects and regular maintenance. Depending on location, home values, and community amenities, HOA fees may vary significantly from $200 to $1,000 per month.

HOA fees are usually deposited into a special account and used to pay for regular landscaping and maintenance, trash pickup, shared utilities, community repairs, and homeowners' insurance that covers public spaces and amenities. Additional assessment fees may also be collected if the community experiences unexpected expenses for damages caused by natural disasters such as earthquakes, fires, floods, high winds, hurricanes, and tornadoes.

HOAs can periodically raise fees according to CC&R guidelines. Fees may be increased to cover inflation, rising operating costs, and necessary community projects to increase resident safety. If HOA fees increase, residents must be given at least a 30-day notice required by law.

What are the Benefits of an HOA?

Millions of homeowners prefer living in an HOA community rather than a privately-owned residence. For homeowners who want a lifestyle with more amenities and less home maintenance, an HOA community offers many benefits.

Because HOAs have regulations that promote a uniform community environment, most residents enjoy cleaner grounds, well-maintained structures, and manicured landscapes without the hassle of scheduling maintenance and repairs.

HOA communities also have shared amenities including swimming pools and hot tubs, barbecue grills, clubhouses, sports facilities, ponds and gardens, and walking paths. Many provide special events throughout the year such as cookouts, swim parties, dances, and holiday events.

Living in an HOA community may not fit everyone's lifestyle, but it may provide the perfect opportunity for homeowners who are searching for more free time, fewer outdoor tasks, and neighborhood activities.

This article was brought to you by Richie Vraux, Broker with Better Homes and Gardens Real Estate/The Masiello Group. If you are contemplating buying in an HOA community and have questions, call him at 207-317-1297.

 

Friday, May 28, 2021

Real Estate: Home inspection a key part of buying process

Submitted by Brandon Lussier

The process of buying a home can be unlike any experience prospective buyers have ever had. After finding a home they like and coming to an agreement on a sale price with the seller, buyers can expect to add many items to their to-do list. One of the first things to jot down on that list is scheduling a home inspection. 

Home inspections are a vital part of the home buying process. Such inspections can protect buyers as they're on the cusp of making what will likely be the most significant investment of their lives. Understanding the home inspection process can help buyers during an exciting yet potentially nerve-wracking time in their lives.

What is a home inspection?

The American Society of Home Inspectors defines a home inspection as an objective visual examination of the physical structure and systems of a house. Inspectors will conduct visual examinations from the roof to the foundation of the home. Additional structures on the property, such as sheds or detached outdoor living areas, are not typically included in the examination.

What do inspectors examine?

The ASHI notes that inspectors will examine the condition of various parts of the home. The heating system, central air conditioning unit, interior plumbing and electrical systems, roof (though inspectors will not climb onto the roof), attic and insulation will be examined. Inspectors also will examine walls, ceilings, floors, windows, doors, the foundation of the home, basement (or crawl space), and structural components.

Can a home fail inspection?

Homes cannot fail home inspections, which are just assessments of a home's existing condition. Municipal inspections are separate inspections conducted by government agencies to verify that a property is in compliance with local codes. Home inspectors will provide detailed reports describing the condition of a home and indicate if any repairs are in order.

Do I really need a home inspection?

A home inspection is a vital component that can help buyers make the most informed decision possible. Forgoing an inspection can leave buyers vulnerable to potentially costly repairs and issues with a home that might have been detected with a proper home inspection. In addition, some lenders insist that buyers have home inspections conducted before they will allow them to borrow money.

Home inspections can protect home buyers as they prepare to make the most significant financial investment of their lives and almost inevitably, the subject of the home inspection will come up during the buying process.

Some buyers may be inclined to skip the home inspection; there is so much else going at that time that it may just seem like another task to check off the list. However, a professional home inspection is the perfect opportunity to gain insight into the condition of the home they’re considering – an unbiased evaluation that can provide much-needed peace of mind at a stressful time. This information can prove extremely useful and help avoid unpleasant surprises.

A professional home inspection includes a visual assessment of the home’s systems and structural components, including heating/cooling, plumbing, electrical, roof, foundation, walls, chimneys, doors, and windows. Appliance systems as well as heating/cooling and plumbing are tested to ensure proper operation. These evaluations are then included in the written inspection report, which should include detailed findings and identify any potential concerns. The report should also indicate any recommended repairs based on the inspection results. At that time, you might recommend that the seller complete needed repairs, or if they choose not to, that the cost of doing the repairs be reflected in the selling price.

However, in many of today’s overheated real estate markets the home inspection contingency may be waived in order for an offer to be considered at all. In these cases, a home inspection is still extremely important because it allows buyers to learn about the home and provides comprehensive picture of the home’s condition. Some buyers are now opting to have a home inspection after the purchase has gone through so they can plan for future repairs, upgrades, or address other issues.

To get the most out of a home inspection, buyers should accompany the home inspector during the process. This allows for asking questions on site and getting any needed clarification about potential issues that come up along the way. It’s a great way to get to know the home and locate key items such as key shutoff valves, the breaker panel and more. Attending the inspection will also provide a better understanding of any repair recommendations.

The home inspection is truly a key part of a smooth transaction and a confident purchase and the inspection report will serve as a reference for details about the home for years to come. <

This article is brought to you courtesy of Pillar to Post Home Inspectors. Contact Brandon with The Lussier Team at (207) 749-3775 for your next home inspection.

Friday, May 21, 2021

Real Estate: Lawn Care 101

By Nicole Foster, Broker/ REALTOR

New homeowners will need to decide if they will invest in the necessary tools and equipment or contract with a professional landscaping company to maintain their lawn. Many homeowners enjoy the time spent outside but do not always know the right steps to take to make the best use of the limited growing season. Creating a garden journal for your property including dates can help you to remember each year what steps were taken in each season, as well as map out the additions you’ve planted along the way. When you move the new homeowners can keep adding to this garden journal or refer to it through the seasons to better understand how to maintain the lawn, perennials, trees and shrubs.

Evaluate the square footage that you have to work with and decide how much area should remain or be designated for your lawn. This will help you to determine how much seed, fertilizer and other materials you will need. Think about how much time and effort you are planning to routinely devote to lawn care during the season. Consider allowing less used areas to “go wild” and having more natural growth. Encourage native species of wildflowers to grow by planting. Many homeowners are finding this style can save them a significant amount of time as well as water.

If there is equipment or tools that you do not have and need to budget for consider whether or not you can borrow or rent the item(s) including things like a riding or push lawn mower, weed whacker, leaf blower, loppers, bow rake, aerating tool, grass seed spreader, leaf rake, hose(s), watering sprinkler(s), garden bags and gloves. Do not overlook the logistical considerations like where you will be dumping things like grass clippings, leaves, etc and if not located on your property how, where and when they will be removed.

Great looking grass begins with having the right amount and type of topsoil with adequate drainage. Observe the sloping of your lawn to confirm that it slopes away from the house and there are no low areas where water can puddle. Small grade (slope) changes for better drainage can be done with small equipment like a wheel barrel and bow rake but larger projects will require the use of a tractor or a bulldozer. There should be a minimum of 4 to 6 inches of topsoil and to learn what should be added to your soil for optimal growth send a sample to the University of Maine Cooperative Extension for testing. Dethatching is a critical step removing all of the dead grass and letting new grass seed to reach the soil and may be done using a bow rake or renting a thatcher. Aerating your soil can be done with a variety of tools which drive 3 inch spikes down into the ground to loosen the soil. Remove weeds and any damaged sections of grass to be replaced.

Buy new grass seed each year and choose the correct type for our area and purpose. Using a drop spreader helps to consistently spread the seed. To get the best results do twice by dividing seeds in half doing two passages; the first passage in one direction then the second in right angles to the first passage. Water and cover with clean straw to help keep moisture in while germinating and prevent from being washed away. It is important to consistently water the grass seed so having a sprinkler set up that can be intermittently left running to reach these areas will be helpful. Once new grass reaches around 4 inches you can begin to mow it.

Keeping your grass a little bit longer during the hot summer months can help to reduce or prolong it from turning brown by being scorched in the sun, and water on occasion in the evening or early morning.

Nicole Foster is a Broker with Locations Real Estate Group who resides in Windham and loves people and real estate.

Friday, May 14, 2021

Real Estate: How to be a stronger buyer in a sellers’ market

By Carrie Colby

Do you keep losing in bidding wars due to multiple offers? Low inventory in a sellers’ market can be difficult for buyers and knowing how to position yourself is key to buying the home of your dreams.

Be a stronger buyer with this advice.
Hire an Experienced REALTOR®
An experienced agent can help you gain the upper hand as you navigate a multiple offer bidding war.

Multiple offer scenario requires mortgage financing in place
Hire a mortgage broker and get pre-approved for a mortgage loan. You may have heard the terms pre–qualification vs pre-approval and are unclear of the difference. A pre-qualification can be a good starting point to shop mortgages without having your credit pulled and get your documentation together.

However, in seller’s market or any market for that matter it is best to be pre-approved for a loan. Pre-approval requires you complete an official mortgage application where a professional will help you do an analysis on your income and asset documents, analyze your credit report, and help you choose the best mortgage product.

You will have a commitment letter to attach to the offer signifying you are pre-approved to obtain home financing. A commitment letter will set you apart from other offers a seller may be considering. Having this legwork completed up front will simplify the mortgage process, close on the home faster and reduce last minute surprises.

Up your earnest money deposit. This shows a seller you are serious and will not walk away if a better property comes along.

If you are looking to buy a home in a sellers’ market, it is key to sell your home before buying. Having a contract with a contingency to sell your home will put you on the bottom of the pile in a multiple offer scenario. With multiple offers there is little chance a seller entertains contracts with a clause contingent on the sale of your house. Sellers will not likely be willing to wait for you to sell your home with other stronger offers on the table even if your offer is higher.

Shorten all your time frames for home inspections, mortgage commitment, appraisal contingency dates, and closing dates. Working with the seller to meet their time frames for moving will be a benefit.

Offer over asking with an Escalation Clause when there are multiple offers
When in a multiple offer situation homes can go for thousands over the asking price. Maybe you are willing to pay more but you are concerned the home will not appraise preventing you from obtaining a mortgage. Your realtor and mortgage broker will be able to help with this. Putting more money down upfront might be the solution.

Many buyers use an escalation clause that says you are willing to outbid any other offers on the home by a certain amount, up to a certain price which is the most you are willing to pay. This puts a cap on price. An escalation clause protects you financially because it prevents you from paying more than you need to.

Cash is King
Cash is king and in a sellers’ market many sellers will only entertain cash offers. Many buyers will borrow against their 401k or withdraw from their IRA. Some use a bridge loan or an existing home equity line of credit. A cash offer eliminates the need for an appraisal and bank approval for a loan contingency. A cash offer shows the seller you are serious about the house and ready to buy it today.

Eliminate Contingencies
Real estate agents will most likely tell you not to remove contingencies. This tactic can move you to the top of the pile of multiple offers but be aware of the risks you take by buying a home without doing home inspections which can cost you later if there are structural, safety or mechanical issues with the home.

Write a Personal Letter

It is possible to tip the scales with the seller by writing a sincere expression of how much you love the house, and how you can see you and your family living there happily for many years. Homes hold many memories, and it is often very difficult for sellers to move on.

It is important to sellers that someone will love and care for the home they raised a family in. In a bidding war a personal letter could earn you enough goodwill to move you to the front of the pack.

Writing a Strong Contract that Appeals to Sellers
Another angle to simply come in with the best possible offer you can reasonably afford, one that still meets all the other parameters. Then live with it whether you win or lose the house.

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

Friday, May 7, 2021

Real Estate: Flipping Houses

By Rick Yost

House flipping is all the rage right now.  In a quickly appreciating market, everyone thinks they can make money.  While the hot housing market is creating opportunities, house flipping is a business that has many costly mistakes.  

A good flip can earn tens of thousands of dollars, but a bad decision can cost tens of thousands of dollars.  

When considering flipping homes, there are four golden rules to profitability:

1. Get familiar with the market – the first thing one should do is educate themselves on the particular area that they are interested in or where opportunities present themselves.  The goal is to learn everything about that particular area, what distressed properties sell for in that area, what renovated properties are selling for, and how long homes are on the market.   This information will give a good indication of the profit potential of a particular area and what's happening in that area.

2. Buy low and sell high-- the second thing to remember when doing a flip is that buying cheap is essential (dirt cheap).  Being a good negotiator is essential to successfully flip houses.  It is important to not act too quickly on any property.  

Waiting for the right deal in the right area and buying it cheap will lead to a profitable flip.   There is much truth to the old saying "you make money when you buy, not when you sell.”

3. Wow with renovations-- thirdly, property renovations should exceed similar properties with which it will compete.   Knowing the comps in the market allows for choosing the proper place to spend renovation dollars.  For example, are furnaces typically replaced, are hot water heaters high efficiency, are granite counters the norm? Should appliances be stainless steel?  Do comps have tile floors or ceramic backsplashes?  If these things are the norm, they must be done in the house to be flipped and go even one step further.   Knowing what the comparable homes on the market have for amenities and matching or bettering them is essential to profitability.

If the house looks better than the comps, it will sell quicker than the comps.

4. Price it right--fourth and lastly, it is important to price the property right.  The price should be similar to or even a little lower than for what comparable properties are selling.  This maybe counterintuitive.  If the home is better than the comps, shouldn't it be priced higher?   Simply --No.   By selling a slightly superior home to the comps at a slightly lower price than the comps, the time the home is on the market is minimized.

The goal is to sell the home as quickly as possible.  The home sitting on the market is not the way to profitability. There is truth to the other old saying "Time is money.”

Holding a house for a few thousand dollars more is a bad strategy.  Carrying costs eat up profitability quickly.   List the home a bit cheaper than the comps, sell it as quickly as possible, get the money out, and move on to the next house.  Flipping multiple properties in a year is where the significant profits are.

These four tips will lead to profitability and success.  Those that fail to heed the tips are flirting with disaster. <

Rick Yost is a real estate broker, real estate author, and longtime Windham resident.  You can reach him with all your real estate questions and needs at
rickyost63@gmail.com