Sunday, February 23, 2014

Why home ownership is a good investment - By Carrie Colby

If you’re like most first-time home buyers, you’ve probably listened to friends’, family and coworkers’ advice, many of whom are encouraging you to buy a home. However, you may still wonder if buying a home is the right thing to do. Having reservations is normal. The more you know about why you should buy a home, the less scary the entire process will appear to you. Here are some good reasons why you should buy a home.
Pride of ownership is the number one reason why people yearn to own their home. It means you can paint the walls any color you desire, turn up the volume on your CD player, attach permanent fixtures and decorate your home according to your own taste. Home ownership gives you and your family a sense of stability and security. It’s making an investment in your future. 

Although real estate moves in cycles, sometimes up, sometimes down, over the years, real estate has consistently appreciated. Market forecasters predict that 2014 will be another year of gains for the real estate market, even though the rapid pace of sales in 2013 cooled off a bit at the end of the year. On Dec. 30, The National Association of Realtors said its pending home sales index, based on contracts signed last month, rose 0.2 percent in November, below the 1 percent rise forecast.

Home ownership is a superb tax shelter and our tax rates favor homeowners. As long as your mortgage balance is smaller than the price of your home, mortgage interest is fully tax deductible. When you rent at the end of the year you have a pile of 12 cancelled rent checks, however, the homeowner has a pile of 12 cancelled mortgage checks that are nearly fully tax deductible on your tax return. Interest is the largest component of your mortgage payment. 

When you do sell as long as you have lived in your home for two of the past five years, you can exclude up to $250,000 for an individual or $500,000 for a married couple of profit from capital gains. You do not have to buy a replacement home or move up. 

Paying your mortgage builds equity in your home. Each month, part of your monthly payment is applied to the principal balance of your loan, which reduces your obligation. The way amortization works, the principal portion of your principal and interest payment increases slightly every month. It is lowest on your first payment and highest on your last payment. On average, each $100,000 of a mortgage will reduce in balance the first year by about $500 in principal, bringing that balance at the end of your first 12 months to $99,500.
Consumers who carry credit card balances cannot deduct the interest paid, which can cost as much as 18 percent to 22 percent. Equity loan interest is often much less and it is deductible. For many home owners, it makes sense to pay off this kind of debt with a home equity loan. Consumers can borrow against a home’s equity for a variety of reasons such as home improvement, college, medical or starting a new business. Some state laws restrict home equity loans.

Carrie Colby is a Realtor® the Broker/Owner of Premier Properties in Raymond she can be reached at Check out all of her current listings.

Saturday, February 15, 2014

Checklist to buying a home - By Lisa DiBiase

In honor of the spring market and all the new buyers, I thought it would be helpful to review a standard checklist on what to expect when purchasing a home. Depending on the location and type of property will determine the finer details of purchase. For this article, I will present a general checklist for buying a single family home:
1.         Begin by understanding your finances – You will need to know what you can afford to pay monthly as well as determining how much money you will need for a down payment. Prepare a monthly budget to put everything into perspective. This budget should include every expense each month.

2.         Choose your realtor - You want to choose a realtor you trust. The cost to a buyer for their service is “free” and they will represent you and your best interest throughout the transaction. In many cases, your realtor can refer you to a mortgage broker as well as other vendors throughout the entire transaction. This becomes your “team of professionals” that will help you along the way to successfully purchase a home you feel comfortable with. The realtor acts as the “conductor” of the entire process from beginning to end just like in an orchestra.

3.         Get pre-approved before you start looking for a home – Understanding what you can afford before you step into a property will make the process more smooth and straightforward.

4.         Look for a home – After meeting with your Realtor, you now should have determined what your want, how much you’re willing to spend and where you want to look. Start house hunting!

5.         Make an offer – Working closely with your realtor, they will help you understand what the best strategy is to offer on the property based the most recent sales in the area.

6.         Under contract – This is the most exciting moment for the buyer! Your realtor will guide you through the all the timeframes that are important within your contract. 

7.         Inspection of home – By now, you are anxiously wondering what condition the home you are about to purchase is really in. Your realtor should be able to have a preferred vendor list ranging from home inspectors to air/water testing and everything in between when it comes time to inspect the home. 

8.         Obtain Homeowners Insurance – It is best to get a few quotes from various companies to get the most affordable and best coverage for your new home. 

9.         Pack and move – If you plan to use a moving company, secure this early on in the process so you know how much you are going to pack and how much the company will pack and set the date. The rates vary depending on how much you pack yourself.

10.       Final walk through – Either 24 hours or an hour before the day of closing, walk through the home to make sure it is in the same condition it was when you last viewed it and all the repairs have been completed to your satisfaction, if applicable.

11.       Closing – Once the title company receives your loan documents, you will receive a HUD statement which reviews in detail your fees and then amount of money needed for closing. In most cases the money need to close must be in the form of a cashier’s check, so make sure you allow time to go to the bank prior to going to the closing. Your realtor will arrange with the title company the day and time of closing where you will sign the loan documents.

12.       Congratulations, you are now a home owner – After signing the documents, you get your keys and move in! If there is any personalization you want to make to the home, its best to do it prior to moving in if possible.

13.       Enjoy!

As I have said since the beginning, 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. It's best to surround yourself with the right team of professionals that can continuously give you the right advice for all your circumstances.

Lisa is the owner/realtor of Landing Real Estate in Portland. To contact Lisa with questions, email

Saturday, February 8, 2014

The three keys to finding great tenants - By Amy Beth Brochu-Krikken

Perhaps you did not plan on becoming a landlord, but your family grew, and the house you outgrew was underwater (you owed more money on it, than it was worth at the time). So it made sense to rent out your house. Maybe you are an investor and you bought another property to add to your portfolio. However you became a landlord, you have one pressing need in common: The need to find quality tenants.
So how do you find quality tenants?

Before we get to the three keys to finding great tenants, you must get to know the Fair Housing Laws (in addition to other laws relating to landlord obligations). You cannot discriminate on the basis of race, religion, national origin, gender, age, family status or disability. However, your decision can absolutely be based on any information you find in regard to a criminal record or credit history.

First and foremost, you ask the prospective tenants to fill out a rental application form. This document gives personal information about the applicant and any co-applicants. The information includes the names of all the people who will be living in the home, as well as any animals they own. Knowing information about pets and other animals will help prevent surprises with property damage, insurance coverage or a homeowner’s association.

As part of the rental application you should ask for permission to call their most current landlord. This five minute conversation can tell you a lot about the individuals as tenants. There are certain things that the former landlord may not wish to say, for fear of any legal backlash, so do not put them in a predicament. Simple, to the point, factual questions will offer you the information that you need. Did they pay their rent on time? Would you rent to them again?

I highly recommend having a background and credit check completed on the potential tenants. It will cost you some money, but consider it a safeguard that could save you money and headaches. A few dollars can spare you from having to find out the hard way that your tenants have horrible credit and are unable to fulfill the terms of the lease.

I have saved the best for last. A competent landlord always insists on a lease, even if it is an abbreviated (short-term) lease. Perhaps you have a seasonal property and only rent for nine months out of the year, but engaging tenants in this legally binding contract is a smart move. It affords you and your tenants a clear understanding in writing of what the expectations are.

There are several online resources that offer sample forms, leases, etc. Find a company that you trust to perform the background and criminal records check. You can easily find what you are looking for by conducting an online search, or better yet, talk to other landlords and find out which website or service they use. 

Becoming a great landlord is not rocket science. Follow the law, complete your research on potential tenants, and once they are calling your house “home”, treat them with the same respect that you would wish to receive.

Amy Beth Brochu-Krikken is working toward her Real Estate License, and will hit the ground running this spring. Amy is a mom of three elementary school aged boys, and lives with her husband in Windham. They own two investment properties, and pride themselves on a history of happy tenants.

Sunday, February 2, 2014

Home buying steps - By Rick Yost

So you found a house that you want to make your home, now what? This is what to expect on your homeownership journey.

Make an offer—if this is the house you want, it is time to make a formal offer and sign a real estate contract. This is a legally binding contract, so take it very seriously. Once the contract is signed, you are committed to buying the house if the seller agrees to all your terms. The contract should contain all your terms and contingencies. Those contingencies might include a property inspection, appraisal, loan approval or a survey. Contingencies enable you as a buyer to opt out the sales contract if concerns or problems are discovered during your due diligence. Once you come to terms with the seller, both sides will sign the contract.
 Inspections—as part of your contract, you should have established the right to property inspections. The most common type of inspection is the “general inspection”. In the general inspection, the inspector will check everything from the basement to the shingles including all the systems. Other types of surveys can include water quality, air quality and zoning. I always suggest going to the property inspection with the professional inspector. It is a great way to get to know the house better. Pay attention to what the inspector says and follow his recommendations. If large problems come to light, this is your opportunity to ask the seller to fix them or adjust the sales price to allow for the problem. If you cannot come to a resolution on the problem, you have the right to void the contract based on your inspection contingency.
Appraisal—if you are taking out a mortgage to buy the house, the lender will insist on an appraisal. A third party appraiser will visit the property and determine the market value of the property. You will have to pay for the appraiser, but it will protect you from paying too much for the house.
Loan commitment—you should have gotten a pre-approval from a lender before you started your home search. Now that you have a house under contract, your lender will do its diligence on you. They will check your credit, work history and debt level. The bank will also check the title report on the property. When the lender is done with its review, and found everything satisfactory, you will be granted a full loan approval.
Walk-thru—the day before you close or the morning of the close you should do once last walk thru of the house. Check for any new damage, repairs that were supposed to be done, and for everything that was supposed to be left.
Closing—the closing can take place at the title company’s office, the lender’s office or even your realtor’s office. At closing, you will sign dozens of documents and turn over a cashier’s check for your share of the purchase price and closing costs. You will also pay the seller for any oil or propane they left behind. 
 When you leave the closing with keys in your hand, it is time to start turning the house you bought into your home.

Rick is a Realtor, real estate author and long- time Windham resident. You can contact Rick with any of your real estate questions or needs at