Do I have a good rental? by Margaret Krainin

So you're starting to consider renting your cottage or home. How do you know if it will make a good rental? There are three main factors.

First, to apply an old cliché, the most important attribute of real estate is location. For rentals in the Sebago region, that means attractive, safe, usable lakefront in a quiet, well kept neighborhood, and relatively convenient access to amenities and stores.

The highest demand, of course, is for sandy beaches, but not all our lakes have sandy beaches all around them. If your lakefront is neat and well-maintained, with easy access into the lake, even if it isn't a very large beach, or if you have rocky access made more convenient by a dock, you will still be able to rent your cottage.

Cottages with shared access or difficult terrain will be harder to rent, but still not impossible, and you will need to put more emphasis on decor, amenities and "toys". Your best ally is an accurate description, to allow your prospective renters to make well-informed decisions about whether your landscape will work for their particular needs.

The next most important factor is condition. Take a careful, unsentimental look at your property. If it's getting run down, in need of paint, with holes in the deck, roof leaking, porch doors unhinged and junk in the yard, that won't be seen as "charming campiness" by your renters. Everything will have to be fixed before you can rent your cottage – and preferably before you even offer it for rent, because we all know how deadlines can slip and good intentions become "didn't happen". Actual campiness is fine, and still sought after by many renters (especially those who came here for summer camp in their youth), but even though plain and simple, everything still has to be in excellent repair and completely clean.

The third factor is furnishings. Needless to say, furniture and beds must be comfortable and not broken, musty or moldy. Thirty or forty years ago, the mismatched furniture (we call it 'eclectic') that had made its way from your living room to your family room to the dorm was perfectly acceptable for the cottage – today, not so much. The trend is now for a more coordinated style. Out of date furnishings can get by for a while, but for top rental income, upgrade your decor, and make it feel like Maine with great accent items picturing moose and bears, chickadees and pine cones.

The best way to find out if your cottage is ready for renting, and to get tips on what needs to be done if it isn't, is to have a local rental agency give you an estimate of rentability.

Saving on property taxes by Lisa DiBiase

We are always looking for new ways to lower our monthly nut! This rings true when it comes to property taxes.  I hope this information helps our Mainer's. Homestead Exemption - This program provides a measure of property tax relief for certain individuals that have owned homestead property in Maine for at least twelve months and make the property they occupy on April first their permanent residence. Property owners would receive an exemption of $10,000. To obtain an application, please visit www.maine.gov and click on the link Property Tax on the left, then clink on the link Property Tax Exemptions.  There you can download the Homestead application and save money.  

To our Veterans, you too can save money with the Veteran Exemption.  A veteran who served during a recognized war period and is 62 years or older; or is receiving 100 percent disability as a veteran; or, became 100 percent disabled while serving, is eligible for $6,000. Veteran Exemption application is located on the same page described above.

For more information about other ways to save on your property taxes please utilize the State of Maine's website as well as for general information about our great State of Maine. 

It's best to surround yourself with the right team of professionals that can continuously give you the right advice for all your circumstances.  Please call a local realtor for all your real estate needs no matter how big or small.  We are trained professionals here to make your life easier.

Short sales and bank-owned properties by Rick Yost

We have all heard about the great deal someone got on a bank owned property (also known as a REO) or a short sale and everyone loves a great deal.
Shouldn't we all buy an REO or a short sale then?  Ah, not so fast.  I have some words of advice for those of you considering buying an REO or short sale property.

First and foremost, consult with a realtor or attorney that understands the REO and short sale process.  Short sale offers have to be approved by many people including all lien holders, mortgage insurers and investors.  The lender may have several people that have to approve the offer.  An experienced realtor can help you understand the document process, approval process and time frames typical of a short sale or REO purchase.

Second, get pre-qualified. It will help you better understand how big a mortgage you can afford. Also, many lenders require you to be pre-qualified.  For example, Bank of America requires all offers on their bank owned properties to be pre-qualified by one of their loan officers even if you don't use them for your mortgage.  FHA also requires you to be pre-qualified to make offers on their properties.

Third, search thoroughly for the right short sales and REO properties.  Many properties listed in the multiple listings service will state "short sale" or "REO".  A realtor will have quick access info to those.  You can also check lenders’ web sites. For example, both Bank of America and FHA have easy to use site that list their properties for sale.

Forth, make your best offer first.  The lenders have a fiduciary duty to their investors to get the best price possible for these properties.  Most listed prices are close to fair market value. Please keep that in mind when making your offer.

Fifth, absolutely get a professional home inspection.  Many REO and short sale properties are sold "as is". A professional home inspection can reveal property defects and issues.  This can also help you determine the true value of the property. Paying $40,000 under market value is not such a great deal when the property needs $60,000 in repairs. 

Sixth, get a title search done.  This is especially important on an REO property. Sometimes liens aren't found until the closing process has started.  The seller should clear all liens during the approval process for short sales, so it is less of an issue later.

Seventh, insist your realtor work closely with the seller's agent. They are the ones who work directly with the bank that owns the home or the mortgage service company for the short sale property.  In order to avoid delays in the approval process, respond to document requests quickly, communicate any changes immediately and check in with the seller’s agent often.

Lastly, good luck and enjoy your search.

Rick is a long-time Windham resident, realtor, and real estate author of a book on short sales.  He can be reached at columnist@thewindhameagle.com.

2013: "A Good Time to Buy" by Carrie Colby

In my last article I explained why now is a great time to sell your home. While this remains true, it is also a great time to buy a home.

Home ownership is now more affordable. Owning a home is a great investment for building long-term wealth through accumulating equity and tax benefits.

With interest rates so low, it is a perfect time to provide security and stability for your family. Rentals in the area are often hard to find and rates are on the rise.

So if you are thinking about buying, I recommend taking the following steps:

1.Find a reputable real estate broker to work with. A good real estate broker will help you in all aspects of buying. The best way to find the right broker is to ask your friends, family and business associates. Your local banker or someone you can trust is a good referral source. You should find someone who specializes in the area where you are looking. You can also look on different websites like Realtor.com or Trulia.com to see who is selling homes in your area.

2.Get preapproved before you start your search. Meet with a few mortgage brokers and/or banks to get your best rate and payment that works for you and your budget. Your real estate broker can give you referrals for these professionals as well. Don’t be pressured to spend more than you can afford. You should also calculate all of the expenses associated with home ownership including taxes, utilities and maintenance.

3. Do your research. If you have children, check out the schools. Talk to other families in the area and ask questions about the town. Are there future plans for the town, such as new businesses coming to town or a factory that may affect home values for better or worse.

4.Do your due diligence. Once you locate the home for you make sure you have a thorough home inspection done. Your real estate broker can help you to find a reputable home inspector. He or she should recommend a few inspectors that you can call and feel comfortable hiring. Be wary if the price is too low. Also ask what kind or report you will get. You should get a written report with photos. I also recommend hiring a certified inspector. The State of Maine does not require certification.

Carrie Colby is the Owner and Designated Broker of Premier Properties located at 1263 Roosevelt Trail in Raymond. In 2012 Premier Properties had $14.7 million in real estate sales. Reach her at columnist@TheWindhamEagle.com.

The Counter-offer by Rick Yost

In my last article I discussed "The Offer", this week we will talk about counter offers. Once an offer is made on a piece of property it is very typical to get a counter offer. These counter offers may go back and forth several times before a deal is struck. It is during this process that decisions will be made that will impact the bottom line in your new property.  There are several items that can be negotiated in the offer and counter offer process that will effect the bottom line.

The seller's price is the most common point of negotiation. Buying the property at the lowest possible price is the easiest way to lower your bottom line.  While negotiating price, I always suggest an offer that starts a dialogue on price, but doesn't insult the seller. As a buyer, you want to entice a counter offer price that is lower than the asking price. You do not want to elicit a response that includes no counter offer. Remember that negotiating for a property is adversarial in nature. You want to pay the lowest price possible for the property and the seller want to sell for the highest price possible.

Repair work is another negotiable point that can effect the bottom line in your new property. You can make your offer conditional upon repairs to be completed before closing. These repairs can be as simple as a little touch up paint to something involved such as replacing the heating system.  Any repairs that are done before your purchase will affect your bottom line, though many buyers will use needed repairs as an excuse to make a lower offer instead of actually asking for the repairs to be done.

Closing costs are negotiable also. Closing cost can run into thousands of dollars. Any of these costs that you can shift to the seller will affect your property’s bottom line. Some types of loans require seller participation in closing cost and first time home buyers sometimes lack the financial resources that complete closing costs require. In these cases, it is fine to offer a bit higher sales price in exchange for the seller paying some of the closing cost. I know that this seems counter intuitive, but you want the property, right?

There are several fees that are paid to parties involved with the transaction that can be negotiated. They often appear in the closing cost and include origination fees, home inspections and title company fees. All of these fees can be negotiated and effect your property's bottom line.

Other personal items can be part of the offer and counter offer. These could include certain appliances, prices of furniture and even portable out buildings. There may be sentimental value attached to personal items, so be careful when you decide to include them in your offer or counter offer. You don't want to lose the property of your dreams over someone's grandmother’s hutch. 

Keep these things in mind while negotiating with your counter offers. Try to get the best deal possible, lower your bottom line on the property, and always negotiate in good faith. My final piece of advice is always consult a realtor or attorney when doing any real estate transaction.