Friday, February 14, 2020

Real estate terms to know before buying a home


By Rick Yost

Lenders, like many professions, have their own
unique terms and acronyms that are used
regularly. It is easy to forget that home buyers
are not familiar with these terms that realtors 
use daily in the home buying process. The most
confusing part of buying a home is the mortgage
process and the many confusing words used. 

Here are some of the more common terms and
what they mean.

Conventional loan - The most typical loan. This type of loan is best suited for home buyers with
good credit and a 20 percent down payment. New rules from Fannie Mae and Freddie Mac allow for
down payments as low as 3 percent.

FHA loans - These loans are good for first time home buyers. They are also good for those with less
than pristine credit, typically less than a 650 credit score. These loans can require a down payment as
low as 3 percent.

Fixed-rate mortgage - These mortgages feature interest rates that will not change over the life of the
loan. If a home buyer gets a 4 percent interest rate on their loan today, the interest rate they pay for
the next 30 years will be 4 percent.

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Adjustable-rate mortgage - The interest rates on these mortgages change over time. The initial
interest rate is locked for a predetermined amount of time (five years for example) and then the
interest rate will rise and fall with a selected index (often the prime rate). These mortgages are
attractive for the initial interest rate that is typically less than a fixed-rate mortgage. Adjustable rate
mortgages are often referred to as ARMs.


Private mortgage insurance - If a home buyer has less than 20 percent for a down payment, lenders
require private mortgage insurance. The private mortgage insurance fee is tacked on to your monthly
mortgage payment. This fee can range from .03 percent to 1.15 percent of the loan amount divided by
12. The fee can go away after the homebuyer has 20 percent equity in their home. These are general
guidelines and home buyers should check with their lender for the exact terms of their private
mortgage insurance. Private mortgage insurance is often referred to as PMI.

Points - Points are prepaid interest. Homebuyers can prepay interest on their loan in order to lower
their monthly mortgage payment. Points often make sense if the homebuyer plans on staying in the
home for a long time. One point is equal to one percent of the loan amount. For example, one point
on a $150,000 loan is $1,500.

Closing cost – These are the costs associated with the purchase of a home. They are paid when the
home is legally transferred from the seller to the buyer, also known as the closing. These costs can
include lender fees, points, title insurance, pre-paid taxes and interest, appraisals, survey fees and
more. These costs can run between two and five percent of the home purchase price.

Prequalified/ pre-approved - These terms refer to a home buyer’s status with their lender.
Prequalified is a general term that means with very little documentation a lender has determined that
a homebuyer qualifies to purchase a home in a certain price range. Pre-approved means that a lender
has stated that the home buyer can borrow the amount needed to purchase the home they want as long
as there are no drastic changes in the homebuyer’s life (job loss, missed payment). This requires
much more documentation and time. Pre-approval is usually not sought until the home buyer is truly
ready to buy.
I hope that knowledge of these terms will make the home buying process a little less intimidating.

Rick is a realtor, real estate author, and a long time Windham resident. Rick can be reached with all of
your real estate questions and needs at rickyost63@gmail.com.


http://www.hallimplementco.com/

Thursday, February 6, 2020

What to do when the real estate market has low inventory

By Carrie Colby

Once you’ve taken all the steps to prepare for buying a home, you’re ready to begin the house hunt. But what happens when you’re out scouting neighborhoods — in person and on-line — and you realize there’s not much to look at? Finding few options, or maybe even nothing for sale in your price range is increasingly common for many homebuyers. But hang in there. You can buy a starter home, even if your market has low housing inventory. Here are some tactics you can employ right away.

1. Offer a higher price — within reason.

It’s supply and demand. Prices rise when inventory is low, and demand is high. I recommend going in with your best and final offer immediately. Offering a higher price can be tricky when you’re buying a home. You’ll need to make sure you can afford — and get — a bigger mortgage. But you also need to be able to make up the difference in cash if the house appraises below your offer. Most lenders will not approve a mortgage for more than the appraised value.

You could also offer more money upfront. Consider making a bigger earnest money deposit. Instead of the usual $1,000 consider $5,000. This shows the seller you’re serious, and it may make your offer stand out.

2. Act quickly, but practice patience.
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Landing a home in a competitive market can mean a lot of hurry up and wait so be ready on a moment’s notice to make an offer on hot new listings. But be prepared. Although you need to be ready to pounce on a home as soon as it becomes available, the deal might not be right for you. Or your offer may be turned down.

3. Be flexible on closing dates.

Besides being fast on the offer, you might need to close quickly too. If your seller needs a quick closing because of a job relocation or divorce, your offer might have more weight. But how can you
speed up this process? Shorten your inspection time frame. Ten days is long enough for a home inspection if you’ve got an inspector ready. Also, if you’re pre-approved, you may be able to close as quickly as an all-cash buyer. Your mortgage lender will have everything in hand to start underwriting your mortgage.

4. Rent the home back to the sellers.

Consider how hard it can be for a seller to sync the sale of their home with their new home’s move-in date. In a competitive market, sellers could end up homeless if their home sells before they have a new home to move to. If you can postpone your own move, offer to rent the house back to the sellers for a short time. This might give the sellers the flexibility they need — and a competitive edge for you.
https://www.egcu.org/home
5. Write a great offer letter.

Many sellers, especially those who plan to keep in touch with their neighbors, care about who will
buy their home. So, write a thoughtful letter explaining who you are and why you love the house and neighborhood. Sellers love a good story. They want to see their pride and joy go to someone they like. Selling a home that you have lived in for a long time can be emotional for the homeowner. I have seen actual lower offers get accepted because a buyer has written a letter from the heart.

6. Approach landlords.

Here’s a think-outside-the-box idea: Approach landlords who are advertising a home for rent. Ask if they’d be interested in selling. You might be turned down, but you never know. Not all landlords want to be in the rental business. Some reluctant landlords who can’t find a tenant would be happy to entertain your offer.

Friday, January 31, 2020

How to buy the wrong house (AKA what NOT to do)

We spend a lot of time talking about how to buy the right home, and for good reason! Buying a house is a complicated process, and the right advice can have a big impact on your bottom line. But... don’t you ever wonder what it would take to buy the wrong house? Sometimes knowing what not to do is half the battle, and that’s certainly true when buying a house. So without further ado, we present to you the perfect plan for buying the wrong house – AKA what not to do when shopping for a home.

Definitely don’t do any research online
If you’re trying to buy the wrong home as quickly as possible, then there’s no time for little details like researching homes and communities. Knowledge will only slow you down. Instead, go entirely with your gut, and ignore the information that most shoppers rely on when buying a house. Just to be safe, avoid asking for opinions on potential destinations from trusted sources. If you want to get technical, you can always print out a nice map and throw darts at it.

http://www.hallimplementco.com/Why bother with a real estate agent?
A real estate agent takes a small commission from the sale, but what do they really do for you? If you
have no need for community expertise, a comparative market analysis, or trusted, personalized advice from a real estate expert, then you have no need for a real estate agent. After all, it’s not like the right agent could save you thousands in negotiations, or scour the market to help you find the perfect property... right?

Who needs mortgage pre-approval?
Sure, you’ll probably need a mortgage to purchase a home unless you happen to be sitting on a pile of cash, but that can wait. Getting pre-approved might make it much easier to negotiate when buying a house, but that would take the time you could be using to not research communities. Better to just wait until the last minute, and let the chips fall where they may.

Any neighborhood will do the trick
Everyone knows that the neighborhood you choose has nothing to do with how happy you’ll be with the house. After all, it’s not like you’ll be spending years of your life there, visiting local attractions, getting to know the neighbors, and becoming part of the community. If you want to make sure you get the wrong home, try pulling neighborhoods out of a hat, or just pick the one with the nicest name.

Love at first sight
https://www.egcu.org/cardWhen shopping for the wrong house, it’s important to know what you want. There’s no time for debate, careful consideration, or expert advice. Instead, focus on a property that causes you to fall in love at first sight, and avoid doing any further research on the property. Don’t get bogged down in unimportant details, like whether the home will still be standing five years from now.

No need for an inspection
Once you fall in love with the wrong home at first sight, you’ll want to avoid anything that will make
you fall out of love. The foundation may be crumbling, but did you see that breakfast nook? A thorough review of the home’s health will only raise questions, so it’s better to avoid it entirely.
Buying the wrong home may feel like it takes a lot of work, but nobody said it would be easy. Or you could do the opposite of these tips and find a home you’ll love long-term... but where’s the adventure in that?

This article was brought to you courtesy of Richie Vraux, a Broker with Maine’s Premier Team at Better Homes and Gardens Real Estate/The Masiello Group. Call him for your real estate needs at 207-317-1297.

Friday, January 24, 2020

What you need to know about buying a condo

https://www.egcu.org/card
By  Kevin Ronan

As inventory for residential properties in Cumberland and York Counties continues to be low, a condominium or townhouse may be a good alternative to a single-family home. Local purchase prices for a condominium may be lower than a single-family home and as an owner you enjoy the added benefit of having external repairs and maintenance taken care of by the homeowners association (HOA). 

If you are exploring a condominium, it is important to be familiar with some relevant terms and language. Please be aware that the rules and regulations may be different in different states. With the help of a local Realtor® you can access the information you need to make an informed decision. Let's start with some of the following basics. 

The Homeowners Association (HOA) refers to a group of owners. If you purchase a property in the condominium complex, you automatically become a member of the HOA with voting rights on all HOA topics.

A Board of Directors composed of condominium homeowners are elected to represent the members of the association. The Board is there to enforce rules, access financing, change bylaws, establish capital reserves and work with the property management company. 

The association is required to generate meeting minutes which highlight all board and association discussions. As a potential buyer, you may request meeting minutes. Common topics include elections, length of service and member voting guidelines. You may hear the term proxy which simply refers to a document that allows members of the homeowners association to vote in the event that they cannot attend any scheduled homeowners meeting. The bylaws will define the rules which governs the operations of the Board of Directors.

Most HOAs have a budget outlining routine expense line items such as landscaping and plowing. The budget also should include any out of the ordinary project expenses planned in the near future. 

Look out for any planned special assessments that require owners to pay in addition to normal monthly fees. Special assessments can be for anything including roof replacement, chimney repairs, exterior painting or replacing exterior siding. These special assessments can be quite significant and needs to be factored into your purchase decision.

Common areas are shared areas available to owners and their guests. Shared areas are paid for by the HOA as part of the monthly charges.  Examples of this may be a community pool, parking lots, tennis courts and the property grounds.

In the State of Maine, a buyer can expect the present condominium owner to provide to you, the buyer, a resale certificate. The resale certificate will include any restrictions on conveyance or sale of the unit, monthly expenses, anticipated capital expenditure, a recent balance sheet and expense statement, association bylaws and rules and regulations.

You may hear the term proxy which simply refers to a document that allows members of the homeowners association to vote in the event that they cannot attend any scheduled homeowners meeting. 

I hope this information assists you in your residential property search. At the time of this article there were 120 condominium or townhouses for sale or sale pending in Cumberland County alone, at some price points greatly increasing the inventory available. You can anticipate list prices ranging from $140k- 1.5 million, with condominiums offering many of the same features of single-family houses. Buyers, enjoy your search!

This article was brought to you by Kevin Ronan, Associate Broker affiliated with Alliance Realty, 290 Bridgton Road, Westbrook brought this article to you. Kronan388@gmail.com, 207-838-4855.


Thursday, January 16, 2020

How to build a real estate investment team

By Dan McDermott

What new year’s resolutions are you planning to tackle this year? While most people may be thinking of joining a gym or better themselves you might be thinking that this is the year that you finally make that real estate investment you have always wanted. If you are thinking about purchasing an investment property you may find yourself overwhelmed and asking the question “where do I start?”

I would urge you to consider building a high-performance real estate investment team as your first
step. You may be tempted to take the lone wolf approach and start tackling the task on your own. However, most new investors will quickly learn that real estate investing is a team sport.  To be successful, a new investor will need to build a team of experienced people that you can trust and rely on. Below is a list of professionals that you will want to be on your team and what they can offer:

Mentor
Any successful real estate investor needs a good mentor or guide to help them succeed. By closely training under the watchful eye of a more experienced investor, we can only become more sophisticated and wiser. New investors can offer a lot of value to experienced investors.  Tasks that might seem mundane or time consuming to a veteran can often be a valuable learning experience that can provide a solid foundation for the new investor to build their real estate career. So, go find a mentor now and establish a great foundation for success!

Mortgage broker or banker
danmcdermott@masiello.comA mortgage broker can offer a variety of different financing products, but a lender is the one who can make the loan decision. Both have their advantages and a place on your team. What is most important is that they understand what is important to your investment strategy (fast closings, lower interest rates, or flexile terms). You will want a team member who has previous experience working with other investors and wants to see you succeed. They need to be creative and clever!

Accountant
You will want to look for a CPA (Certified Public Accountant) or accounting firm that is aware of the pros and cons of real estate. Preferably an accountant who is an investor like you or at least has extensive experience in working with investors. With recent tax law changes keeping accurate books and records for investments will be extremely important. Additionally, when tax season comes around, a seasoned accountant will be able to help you reduce your tax liability and save you money.

Real estate attorney
http://www.hallimplementco.com/An experienced real estate attorney is someone that will be familiar with the laws of your investment area and that has extensive experience with the types of investment assets you intend to pursue (If you are buying short term rentals, the attorney should be familiar with short term rental contracts and zoning requirements/code, for example). It is critically important to have someone on your team who can review/prepare contracts, has knowledge about asset protection strategies, understands your investment strategy and the laws and legalities of all your actions.

Real estate agent
A broker or agent with experience in the areas you invest in and that has access to off-market deals, the MLS (Multiple Listing Service) can be a great help. An experienced real estate agent will be able to help you determine the market value of an acquisition process and help you promptly sell your asset or 1031 exchange if that is more preferable.  

Start building your real estate investment team right away. While this is a list of professionals you will want on your team, you may find that you need additional support from property managers, appraisers, inspectors, and contractors.  Investing in real estate can be a whole lot less stressful and more profitable with the right team on your side. Assembling the right team will not happen overnight, however once together, they will give you the support and help you’ll need to make your real estate investing dreams a reality. If you have any questions about real estate investing, please don’t hesitate to contact me at 207-839-1981.

Friday, January 10, 2020

February is the new April

By Nicole Foster

Spring has historically been the most popular time for sellers to list their home for sale, but when does the “spring market” officially begin? Pantone’s Color of the Year for 2020 is Classic Blue, but don’t wait to start seeing it in the great Maine outdoors, because you could miss out this year if you are waiting for the green grass, trickling waters, daffodils and tulips.

The spring market is at our doorstep right now, and it will start to knock loudly during the NFL
playoffs. By the end of January, we will already be seeing signs of spring with an uptick in new listings coming to the market, an increase in open houses and the ringing of our telephones. It happens each year with almost routine predictability, but this the year has all the conditions for an earlier start, perhaps.

Increasing rental prices in the Greater Portland area coupled with an election year could cause some first-time buyers to make their financing and housing details a priority out-of-the-gates of the calendar year instead of foot dragging. Many Boomers and Gen Z are also predicted to be on the move and taking advantage of the surge in new construction inventory for its ease in maintenance, energy efficiency and the ability to make some customization.

http://locationsinmaine.com/Entry level or first-time homes are where the competition has been and will remain highest in 2020 due to numerous factors. More expensive homes may see the need to be thoughtful in their list price this spring. New construction is on the rise, but can you get in? Newly built homes can be presold or
go very quickly, especially those which fall in an affordable price range.

Currently the Consumer Finance Protection Bureau (CFPB) is working towards providing lenders with clarifications to help streamline the lending process. This could result in even more buyers being able to get approved for a home loan this spring than in recent years.

The buyers today are often very efficient and more prepared than ever before. The myth that millennials can’t get approved for a home loan and live with their parents has been debunked in a very big way. Many are projecting that millennials will make up roughly 50% of the buyers in 2020 and will drive the housing market possibly over the next decade. If you are a potential seller, do you know and understand WHAT millennials are looking to buy or are you still listening to the myths?

You only get one chance to hit the market.
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How will your listing stack up next to the rest and how do you plan to hold YOUR property’s value in the competitive spring market of 2020?

Strategy is critical when you are buying or selling property, whether it be a primary residence or an investment. Timing is just one of the many components to consider in your strategy. Ask your REALTOR® if it is best to hit the market at the beginning or the end of the week. Should we “go
live” in the morning or in the evening? Discuss with your lender whether it is best to close at the beginning of the month or the end.

Start to watch for signs of the spring market arrival and they will become perfectly clear. Be sure to check in with your lender and REALTOR® now that the holidays are behind us to “Get On It” so you do not miss out on any opportunities!

Nicole is a Broker with Locations Real Estate Group and mother of four. She is a Windham resident who loves people and real estate. Follow her on Facebook @sellingmaine or Instagram @207nicolefoster.


Friday, January 3, 2020

What you should know about home inspections

By Abby Cross

Home inspections are a critical part of the home buying and selling process. Failure to obtain a home inspection could potentially cost you a great deal of money and hassles in the long run. At first glance, property inspections can seem daunting, especially if you’ve never been through the process. Here’s a quick glance at what to expect during the home inspection process!

Buyers are responsible for inspections
To those unfamiliar with real estate, it can seem like inspections are just what’s expected. However, it is up to the buyer to decide which inspections they would like completed – if any at all. As a buyer, you agree to hire a home inspector, have the inspections completed within a reasonable amount of time, and shoulder the cost. This is for your benefit. The home inspector works for you, not the seller. They are there to point out all the potential concerns in the home. The seller has no impact on the inspector when you pay, and you can rest easy knowing your report is sincere.

What home inspections cover
tombiczak@allstate.comA home inspection is an overall determination of your home’s condition. Since every property is different, the specifics of what is checked during your home’s inspection may vary slightly. The American Society of Home Inspectors suggests that qualified inspectors check the following areas: foundation and basement, any additional structural components, interior plumbing systems, interior electrical systems, heating, and cooling systems, condition of windows, condition of doors and door
frames, condition of floors, walls, and ceilings, the attic and any visible insulation.

What home inspections do not cover
No single inspection is going to cover every aspect of your new home. Be aware that there are limits to what an inspector will check. Some areas will require a referral to a specialist. Here are some areas that don’t often make the cut for home inspectors and may require another professional: inside the walls, roof or chimney repairs, septic tanks, wells, sheds, or additional structures separate from the main house. Just because something isn’t covered in a home inspection, don’t think that it can’t be inspected. Ask your REALTOR® about getting specialists if needed.

https://www.egcu.org/riseYou can attend inspections
Most home inspectors recommend that buyers attend their property inspection. They see it as an
opportunity to thoroughly answer any questions that the buyers may have about the property’s condition. Coming out to view the property is only half of a home inspector’s job requirements. After their site visit, they are required to provide an official home inspection report, which details their findings in writing. It should include pictures of the damaged areas as well.

Repairs after inspections are negotiable
There are three typical outcomes to these negotiations: the seller can perform the repairs before closing, the seller can credit you money for the repairs, or they can become your responsibility. Prioritize! Focus on a few, key points from the report and the sellers will be more likely to assist you. Hire professionals and be sure to collect any repair estimates and invoices. If you get the inspection report back and it features a larger problem, or you and the seller have gone back and forth in negotiations and can’t reach an agreement, as a buyer, you have the upper hand. As long as you respond to the seller within the inspection timeframe and have a legitimate reason you will likely be able to walk away from the transaction.

Whether you’re in the process of buying your first home or your tenth investment property, home inspections can seem overwhelming. After all, there are many aspects of the property to consider, lots of paperwork to read over and negotiations to consider, not to mention the worry that there could be something truly wrong with your dream home. Don’t let yourself get too worked up, let us help to guide you through your inspection with the knowledge and experience to make informed decisions.