Friday, November 15, 2019

The do’s and don’ts of buying vacant land

By Carrie Colby

Buying a home can be complicated but purchasing land to build on is a whole new ball game.

Finding your dream home isn’t easy. You’ve spent a lot of time scouring online listings, attending open houses and scoping out neighborhoods – and you and your REALTOR® have still come up empty-handed. As a result, you may want to consider buying vacant land.

But before you get serious about laying a foundation, be aware that a land purchase may yield more surprises than buying a home – from easements and zoning restrictions to soil conditions that could easily turn building your dream home into a headache.

Whether you’re buying vacant land to build a home for your family or you hope to sell the plot for a profit in the future, follow these rules to avoid buyer’s remorse. Here are the do’s and don’ts of buying vacant land:

Do work with a pro who knows land with a real estate agent when you purchase a home helps you navigate the finer details like negotiations, due diligence and closing the deal. But when you’re purchasing land, it’s important to hire an agent who has extensive experience negotiating land deals. Use an agent who actually has represented both buyers and sellers in a number of land transactions.

Do consider the value of homes in the neighborhood and resale value
One of the biggest draws of building your home is the ability to customize it, but be sure you’re building your dream home in a neighborhood with similar taste. Be careful not to make the house too
specific for your needs and taste. Even if you never plan to sell, life happens, sometimes making it is necessary to sell unexpectedly.

Paint and carpets can be changed but for example lowering or raising counters and cabinets to fit “your” height will be much more costly to change.
You may be turned down for a construction loan if your plans for the home of your dreams is significantly more than home values in the neighborhood.

Do take utilities and road access into account
It’s easy to take for granted access to running water, electricity and sewers when you’re buying an existing house, but with vacant land these are not always a given.
Depending on how developed the area is around the land, you want to know if it’s going to cost money for infrastructure to be run to that land or if it’s already serviced. Is there town water and sewer or will you need to drill a well and put in a septic system.

Don’t expect to get a loan
A land purchase can’t be leveraged with a bank the same way a home purchase can, so you’ll likely have to pay cash if there’s no structure on the property yet.

But if you have a piece of land, you might be lucky if (a lender) gives you 40% or 50% of the value – and that’s typically if you have a good bank relationship or other collateral. You’re more likely to get zero. You’ll have a much better chance of being approved for a construction loan on the building you want to put on the land, since the house you’ll build serves as collateral on the loan.

Don’t skip the survey or soils tests
Similar to a home inspection and background research on a house, a plot of land needs to be subjected to tests and checks to ensure you know what you’re buying and that you’ll be able to build on it.

It’s best to buy land that already has a completed survey and soils report. And make sure they are up to date. If there is none, your REALTOR® should be able to recommend a surveyor and soils expert to do a soils test and septic design. This tells you that there is adequate space and the soils are right to put in a septic system and well.

Buying land is more complicated, but in the end you may end up with a home that works best for you and your family.

Friday, November 8, 2019

What to do with you house as you get older

By Richie Vraux

Not only have your children left the nest and produced their own happy and busy family lives – but now, your children have grandchildren of their own. You are facing a whole new life. Your nice big home that once was the setting of holiday gatherings are no longer needed. If truth be told, you are ready to downsize, anyway.

At one time, you could scale those stairs in your three-level home two at a time, but now your body has slowed down and you just can’t do those things you used to do.

Not only may it take a little longer to hop those stairs, but you are also on a fixed income. Your only means is Social Security  - or if you were lucky enough to put some money away for your retirement., you may have a little extra. But who knows how long you will live? this is the case for you, it might be time to speak to a Real Estate Advisor. Although it is true you can reach out and speak to any agent, as a senior citizen you may have other options.

You may want to speak to someone that specializes with your needs. A Senior Real Eestate Specialist Advisor is an accredited agent with the knowledge in the field of elder real estate and can help you make the right decisions.

Depending on your financial situation, there are different avenues you can take to help with your specific needs.

One way is a Reverse Mortgage. This type of mortgage is issued by a bank but is set up through FHA (Federal Housing Administration) and is only available to you if you are 62 years of age or older. The bank pays you for the equity still remaining in your home. It does not have to be paid back until the last surviving homeowner dies. The estate has approximately 6 months to repay the balance due or the bank will take back the home.

There are a lot of things to be considered when you get older in life. You should speak to a trusted Real Estate Advisor to make sure you are making the right decision for you and your family. Richie Vraux is a Raymond resident and Broker with Maine's Premier Team at Better Homes and Gardens Real Estate/The Masiello Group. For your real estate needs call him at 207-317-1297.

Friday, November 1, 2019

A final walk-through before closing is an important component of the home purchase experience

By Kevin Ronan

Buying a home is like going on a journey, you must stay focused throughout the entire trip.    From the completion of the mortgage application, to visiting properties, making an offer and finally getting the home inspection - it all could take weeks or even months.

An extremely important final step before the closing is the final property walk-through. For some buyers, this critical task may not seem that important, but if a buyer knows what he should be looking for, a thorough walk-through can alert a buyer of expensive issues that may have been missed during the home inspection or of contractual repairs that were not performed correctly.

When you are doing the final walk through, make sure the property is in the condition you agreed to in the Purchase and Sales Agreement.  Let’s understand that a final walk-through is not a home inspection. The goal of the final walk-through is to ensure the home is in the same condition as when you last viewed the property and equally as important to check that all repairs agreed upon with the seller were performed.

Who should attend the final walk-through? Generally, the buyer and the buyer’s agent will attend without the seller and seller agent. This allows the buyer the freedom to inspect the property at their leisure without the seller or the seller’s agent.  In cases of new construction, the contractor or builder may request to be present, as a new building walk-through will be looking for both defects in the construction as well as any cosmetic issues. Most buyers expect a new home to be pristine - however in many instances this is not the case and the final walk-through is extremely valuable.

In most cases the final walk-through is scheduled the same day as the closing or within 24 hours prior to the closing date. I suggest you work with your real estate agent to establish a time with the seller’s agent as to when you can access the property and when the property will be vacant during your visit.
So, the final walk-through day has arrived. Depending on the size of the house, the walk-through can take between 30 to 60 minutes. Don’t forget about inspecting the exterior including the detached garage, sheds or pool area. Remember, this is your last opportunity to give your new home a final once over before it’s yours. Take your time!

To be certain your new home is move in ready, make yourself a checklist of things you want to review during the inspection, such as the property disclosure, inspection report and any repair amendments you and the seller agreed on and receipts of work performed.

Last week, Maine residents experienced a nasty nor’easter causing significant property damage throughout the state. When mother nature does not cooperate with your plans to close, I strongly suggest you consider rescheduling or repeating the walk-through. A walk-through will help you determine if any damage was caused by the storm and give the buyer the recourse to have the seller make the repairs before you close. The most common damage we are looking for includes water intrusion, fallen trees and related structural damage. Your mortgage lender may require the damage be remedied before the loan is approved.

If you are considering purchasing a home in the future, make the final walk-through inspection an important component of the home purchase experience. Take the time to protect yourself and your new home.

This article was brought to you by Kevin Ronan, an associate broker affiliated with Alliance Realty, located at 290 Bridgton Road in Westbrook. If you have any questions or need any assistance with your real estate needs please contact him at, or 207-838-4855. 

Friday, October 25, 2019

Active versus passive real estate investing

By Dan McDermott

Individual private investors who are looking for a reliable stream of income often turn to real estate and face an age-old question: Is it better to be an active or passive real estate investor?

Given real estate investments inherent ability to provide steady passive cash flow from rents or loan payments plus some very generous tax benefits, it is not a wonder why they are a popular investment vehicle.  Additionally, there may also be a worthy prize at the end too; the potential to realize capital appreciation and possibly double or even triple your investment. This combination produces higher returns than traditional passive income sources such as bonds or dividend-paying stocks.

When investors decide whether to pursue real estate investing on either an active or passive basis, they need to consider the pros and cons of each strategy. In order to determine which investment strategy is best for you, you should first understand the main differences between the two.

Active investing is when an investor directly purchases a property for rental cash flow or to fix and flip for a profit. The property could be anything from a commercial building to a single-family house or a large multifamily property. The investor will personally manage all aspects of the investment process. This includes finding the deal, negotiating the deal, securing the financing, closing the deal, and managing the investment. The process of identifying a suitable market, property, financing can be time consuming and complicated.  However, it can also be very rewarding and if the investment goes well, the investor will get to keep the largest share of the profits.

Passive investing is a hands-off approach which allows an investor to place one’s capital into a real estate vehicle – more specifically, an apartment, commercial, or self-storage syndication – that is managed entirely by a management company. Investing passively in real estate means the investor outsources the acquisition and management of their real estate investment to a management company.  The management company pools together many investors capital and buys larger or even entire portfolios of properties. The management company is responsible for the day-to-day operations of the properties and charges a fee for their services. The investors will then get a monthly or annual share of the profits earned from the rents collected on the property or portfolio of properties.

Based on my experience in working with active and passive real estate investors, I think there are many important factors to consider when deciding which investment strategy is right for you. One of the most important factors is control.

Most investors consider an investment to be either active or passive depending on the level of control you have.  As a passive investor you are opting to relinquish most of the control to an experienced management company who will use your capital to acquire and manage a portfolio of properties. When you give up control, the investor is putting a lot of trust in the management company to execute the goals/business plan of the investment.

As an active investor, you can directly control the nature of the investments you make. You decide which investment strategy to pursue. You decide the type and level of renovations to perform. You decide the quality of tenant to accept and the rental rate to charge. You determine when to refinance or sell. With passive investing, all of the above is determined by the management company.  

Normally from an investment fit an investor is either active or passive, but not both, and it usually comes down to whether the investor wants to have control or not.

In the end there are many ways to become a successful real estate investor. Not all strategies are the same, so it's important to understand the pro's and con's and to identify which path (active or passive) is best for you.  If you have any questions or are interested in learning more real estate investing, please contact me today at 207-712-3152.

Friday, October 18, 2019

Buying or selling a home with unpermitted work

By Nicole Foster, Broker/ REALTOR®

Maine is home to much of our nation’s oldest housing stock, which is evident when you look around. As real estate professionals we are seeing daily the building trends of years gone by and how they have either stood the test of time or not at all as well as everything in between. Would you rather purchase a home constructed in the 1920’s or the 1970’s?  Ask a local REALTOR® and they can help by explaining some of the current market inventory distinctions and their most common upgrades.

Homeowners are held responsible
Any change or improvement to a property’s original size or condition other than very minor upgrades (i.e. new sink faucet, interior paint) requires a permit from your local municipality, regardless if the homeowner is doing the work themselves or hiring a contractor. You or the contractor doing the work will need to complete the application and pay the required fee (if curious about permit costs then you can view the fee schedule online for most municipalities). When interviewing contractors to do home renovations do not just assume that they are pulling the required permits that YOU the homeowner are required to. Ask them if they will handle this and then take a moment to confirm that they did by either calling the Code Enforcement Officer or looking in the file yourself because you, the homeowner, are the one responsible, not the contractor.’ve recently seen a very expensive home using a high end, professional contracting company who
simply forgot to pull the necessary permits on a kitchen remodel and the seller was not made aware until they were selling. Also, recently I learned of a local case where a homeowner was denied an
insurance claim after experiencing a fire due to an electrical issue after it was confirmed the electrician they hired forgot to get the necessary permits for a small job.

Reasons homeowners do not get a permit
It is possible that the homeowners do not want to have their property taxes increased and if they can keep the improvements unknown to the Tax Assessor then they can continue to pay the same amount. Sometimes the homeowners are concerned that the work would not be allowed how they want it to be done or that the requirements will be to a standard they do not want to have imposed on them.

A homeowner may not want to spend the extra money on the cost of the permit fees, or they may feel that welcoming the Town into their home could reveal other potential violations so want to avoid a visit. Some just don’t realize that they were supposed to get one.

How do you recognize if work was done without a permit?
There are instances where it is quite apparent that work was done “on the cheap” and you can assume that you will not find the permits for it in the Town’s file at first glance. However, there are other properties where the quality looks like or is professionally done but the permits were never pulled, either intentionally or accidentally, so it can be quite difficult to recognize. Often, we compare what we see visually to what is reflected in the public records for the home. A professional and well-seasoned building inspector can help to identify areas that you should be concerned about but may not always be able to determine if work was permitted or not by visual inspection necessarily.

Buying or selling
Work closely with a local real estate professional who can provide you with a steady stream of information regarding what options exist for your particular situation and then advocate strongly for your best interests through this complicated process.

Sellers are required to disclose any work which was done without a permit during their ownership to prospective buyers when selling.  Buyers may be unable to obtain their financing from their bank if unpermitted work is flagged either by the underwriter or appraiser.

Each Town has their own approach and fee structure for how they deal with work after it’s already been completed and depending on the scope of the work can be cooperative or punitive. Unpermitted improvements may not bring the increase in valuation and appeal that competitive homes with all the permits will.

Nicole Foster is a real estate broker with Locations Real Estate in Falmouth and a Windham resident who loves people and real estate.

Friday, October 4, 2019

Getting your home ready for the cold season

By Mel Oldakowski

The cool autumn air and changing colors are upon us! This serves as a reminder to start prepping for the cold season ahead. Yes, it’s coming! Imagine, on the coldest winter day, you get out of bed and realize you can see your breath. You check the thermostat, only to realize the furnace has stopped working. That’s why fall and winter home maintenance is so important! Letting it go until it’s too late can lead to bigger problems and big-time headaches. Here’s a few things you can tackle while the weather is still nice.

Service your heating system. 
Early fall is a great time to beat the rush and have a heating specialist come out to look at your furnace. To keep your furnace from failing when you need it most, you should have it serviced at least once a year. These tune-ups keep it running longer and can identify deadly carbon monoxide leaks. It’s always best to have a professional give your entire furnace system an overview. Don’t be a jack of all trades!

Have your fireplace and chimney cleaned professionally. 
A chimney should be cleaned after each season—ideally before summer hits, because humidity plus the creosote can damage masonry. However, if the chimney wasn’t swept last spring, make sure it’s done before you use it this winter. A dirty, blocked, damaged, or improperly built chimney can result in CO poisoning, which can be deadly. screen doors with storm doors. 
Storm doors are typically made of aluminum and strong glass and are designed to create a tight seal. This seal will prevent heat from escaping, improving your home’s energy efficiency.

Add attic insulation and check for gaps in existing insulation.
Proper insulation is one of the most important ways to keep the heat inside your home where it belongs. Gaps and thinning areas of insulation occur naturally over time. Attic insulation keeps heat inside the house (lowering energy bills), keeps temperature consistent between rooms, and helps prevent ice dams.

Insulate hot water pipes.
Unfinished basements, crawlspaces, and attics typically don’t get heat from your central heating system. This makes any pipes running through these spaces susceptible to heat loss and freezing. Install simple foam pipe insulators to keep them warm and conserve energy.

Add or replace weather stripping. 
Weather stripping blocks outside airflow through cracks on moving components, such as doors and windows. Blocking this airflow can help reduce energy loss and lower your energy bill by as much as 20+%.  If you already have weather stripping installed on your doors and windows, now is a good time to check it out and replace where necessary.

Take care of your gutters. 
Once the leaves have fallen and before the first snow, take time to make sure your gutters are in good shape for the winter. They’ll need to be clear of debris, free of leaks, and strong enough to handle snow in order to be effective all season long.

Trim tree branches and remove brush. 
Dead or weak tree branches can pose a physical and financial risk if not taken care of before winter. Strong winds and snow can break susceptible branches, which could fall on your house, your neighbor’s house, or power lines. Clear any leaves, brush and piles from your yard, particularly around your foundation.

Don’t forget to stock up on supplies. 
Stock up on ice melt, candles, matches, flashlights, batteries, ready-to-eat food, and plenty of warm blankets for those times when the power checks out. Check your snow shovels and snow blower. Are all your tools in good working order? 

It is best to be prepared for a long winter ahead so you can enjoy the warmth inside.

Friday, September 27, 2019

How to prepare for an appraisal - kind of

By Greg Swander

Selling your home can sometimes seem like a marathon instead of a sprint. Your first step is finding a REALTOR® that you feel confident in that when you hand them the baton, they will get you to the finish line. Your REALTOR® will game plan with you discussing the multiple hurdles you will have to clear going forward. (Ok, I am done with my track and field analogies now!)

First you need to list your home. Your REALTOR® will take some photos and write up an appealing listing paragraph for potential buyers. After posting online, you have a buyer interested in coming and viewing your property. Next you find out the buyer is very interested in your property and they provide an offer with the buyer being financed through a mortgage lender. You and your REALTOR® work through the details and negotiations and now you are under contract! Phew that was the hard part, right? Time to sit back and start packing and get ready for closing. Well not just yet, most likely your contract includes a due diligence period to allow time for your buyer to do inspections. buyer schedules inspections and you hold your breath. After inspections the buyer provides an ICA (investigation contingency amendment) which outlines some issues found during inspections that the buyer would like resolved prior to closing. You and your REALTOR® huddle up and determine how to tackle these findings in the inspection (I said I was done with track and field analogies, not sports in general). After some continued negotiations by your REALTOR® you come to terms on an amendment that satisfies both you and the buyer. Yeah, you are through the due diligence period and now you can start packing!

But then you receive notification that the buyer’s lender is sending out someone to do an appraisal on your property. Wait, they already did inspections so why is there an appraiser coming out to inspect the home? 

You wonder, ‘what do I need to do NOW after everything I have already done up to this point.’ The answer is - nothing really. You may think you need to spend the time to make your house look pristine or else the appraiser is going to undervalue your home. The truth of the matter is that the
appraiser will simply come into your home to do measurements and take a few pictures of the property. The appraiser is simply there to take a "snapshot" of the house in order to do a comparison with other homes in the area. You could clean every nook and cranny and it wouldn't do a thing to increase the appraisal value.

So, the answer to "how to prepare for your appraisal of your home" is to simply not worry about it
and go on with your day as normal. Once the appraisal is complete the buyer’s lender will make a call to the bullpen and bring in the closer. (As we are going into October, I figured it was appropriate to end with a baseball one!)

This article was brought to you by Greg Swander. Real Estate Agent with Coldwell Banker Team Real Estate in Windham. Call him anytime at 207-650-1095 or email him at for any and all of your real estate needs.