Friday, July 27, 2018

The conversation between Realtor® and client by Mel Oldakowski

Once you’ve made the decision to buy or sell, naturally the next step is to start interviewing real estate agents. 

In your initial conversation of substance with an agent, that agent is required to present you with a copy of the Maine Real Estate Commission’s “Real Estate Brokerage Relationships Form” which explains your options as a “consumer” and is intended to encourage a conversation with the agent about those options. 

To be represented by a real estate agency as a buyer or seller, you must have a signed representation or listing agreement with that agency, to be entitled to the benefits of a fiduciary relationship. It is not mandatory that you sign such an agreement but unless you do, the real estate agent will be unable to provide you with advice, counsel and the benefit of the agent’s judgment and expertise in the market. 

When you decide to sign a contract with an agent, one question you may want to ask is, “What type of agency does the company practice?”  In Maine, real estate agencies are allowed to practice one or more types of agency relationship with buyers and sellers.

Here is a summary of the different types of agency relationships allowed in Maine: 

Single Agency – With the buyer’s or seller’s written consent, the entire Agency represents only one party in a transaction, either the buyer or seller. 

Appointed Agency – With the buyer’s or seller’s written consent, the agency may appoint one or more agents to represent a buyer or a seller. 

Disclosed Dual Agency – With the buyer’s and seller’s written consent, one or more agents may represent both buyer and seller in a transaction. 

Single Agency with Disclosed Dual Agency – With the buyer’s and seller’s written consent, the entire Agency may represent both buyer and seller in a transaction. Agency with Disclosed Dual Agency – With the buyer’s and seller’s written consent, the agency may appoint one or more agents to represent both the buyer and seller in a transaction. 

Transaction Brokerage – In this type of relationship, the agency does not represent the interests of the buyer or seller in a transaction. The transaction agent’s job is facilitating the transaction, giving advice to neither party. Written consent is not required for this type of agency relationship as the Agency/Agent is not providing representation.

It may be a bit of information overload but it’s important to know what you’re agreeing to and how it could play out in your real estate transaction. 

A few questions to ask an agent during the initial conversations might be, “How long is my contract for and what is typical?”  “How does the agent get paid on the buying or selling side?”  “What are realistic expectations in the current market?”

 It’s your decision. Take your time and ask questions. 

Ultimately, your open communication with an agent is the key to a successful transaction and we want to exceed your expectations. 

Mel Oldakowski is a real estate agent/associate broker at Better Homes and Gardens/The Masiello Group in Windham.

Sunday, July 22, 2018

The pitfalls on closing day by Randee McDonald

You've been assigned your date, time and location for your property transaction closing, but you’re not in the clear yet. There are still some things that can compromise the closing and prevent it from happening. 

Power of attorney issues 
Cumberland Title can, will and prefers to draft this document so we know for sure it will be correct and acceptable for use at the closing. There is specific information that must be contained in a Power of Attorney to be valid for a real estate closing. Some people attempt to draft one themselves but if the document is deemed invalid, the closing cannot happen.

Out of state parties (2.5% withholding)  
If you are selling a home in Maine and Maine is not considered your permanent residence state, you will be subject to the 2.5% out of state withholding tax. Make sure this is addressed before the closing, or you won’t be closing that day due to additional paperwork needing to be submitted. In the case of those that consider themselves “snow birds” or split their time between two homes in different states, the state where they reside a total of 6 months + 1 day or more, is considered their legal residence.

Last minute changes
Do not pay anything or change anything in the days leading up to the closing. This includes taxes, homeowner’s insurance, home equity lines, in-store credit cards. All of these things affect the outcome of the already approved closing details/figures, and new documents need to be issued by lender and the title company.

Funding issues 
Please do not bring cash to a closing. A bank check better protects both you and the title company. If your funds are being wired to the title company, make sure that you allow time for that wire to come through. Wires do not necessarily happen “automatically” and can take up to a few hours to arrive into the account. If you were instructed to bring a check to closing, make sure that you do. If you were told that it had to be a bank check and not a personal check, make sure that it is.

Side deals discussed at the closing table 
If you want to ask the seller if you can buy his riding mower too, make sure you do that before or after the closing. Under no circumstances are any side deals or transactions to be discussed at the closing table during the real estate transaction. The law requires that the title company stop the closing immediately and not allow it to continue.

Improper I.D.
You are required to provide proof of identity at your closing. When you check in to the title company, chances are they are going to ask you for this right up front. You should be prepared to hand them a current, valid ID with photo. Think driver’s license, state ID, or passport. These should be valid and not expired.

A real estate closing should be a happy occasion. Please do your best to avoid these scenarios that will turn this happy occasion into a frustrating one. And a good rule of thumb is: if you are unsure about anything leading up to the closing date, call your lender or title company for guidance.

Friday, July 13, 2018

A day in the life of a real estate professional by Amy Krikken

What does a real estate agent do on a typical day? Do they sit around and eat bonbons all day, or do they actually have a job to do?

While I'm sure every career has its share of bonbon-eating-folks; but in this career, you do not get paid unless you perform. But what do we actually do? 

To the novice, it would be easy to think that an agent simply finds their buyer a house or represents a seller by snapping a few photos and putting their house on the market; then just sit back and wait for the inevitable to happen, since the market is so hot. I am here to tell you that is NOT the case.
The very first order of business for a real estate agent is generating business.

People do not come knocking on our doors begging us to sell their house. We have to pound the pavement to find business, by either door knocking or email/social media marketing, or via paid leads through Zillow (yes, those are paid for by us). we have secured the opportunity to help a client find a home to buy or a client with a house to sell, we then have to bring it to market. 

We have to develop a strategy of how to advertise the home and showcase its unique strengths. Sometimes we’re selling a house because of a tragic situation like a divorce or death and maybe the house is in disarray because the person’s life is in disarray. We must make it look its best so that we can help our clients achieve the sale. 

Sometimes we have to have difficult conversations with sellers about cleaning up the dog poop in the yard or the dead animal in the front yard (no I'm not making that up and yes it really happened).

After we have shimmied items around so that we can take photos that look their best, we must come up with the pricing strategy for the home. How do we do that? We look at the most recently sold homes, the data, and compare those homes to the home in question. We do some adjusting, since no two homes are alike, through a process known as a Comparative Market Analysis and we arrive at a price that we deem a fair asking price.

Side note: In a crazy hot market as such as the one that we are in currently, there are a lot of sellers testing the market. Sellers try by putting a high price tag on their home to see if it will sell. You see this on Zillow with their new "make me move" campaign.  

Once we have taken pictures and chosen the asking price, it's time to write our description and then we are ready to put the home on the MLS (Multiple Listing Service).

When acting as the listing agent, we stay busy coordinating with the homeowner to get buyers into the property to view it and hope to generate an offer, or several.

When acting as buyers’ agents, we are constantly watching the market for properties that match the criteria that our buyers are looking for.

In either case, once the property goes under contract, this is where the real heavy lifting begins.
The buyer usually has ten business days to conduct their inspections. As agents, we help them coordinate inspections. Maybe they don’t know the name of the septic person, a specialist on mold issues or a general home inspector. We connect our clients to those resources. We refer many other resources from movers to home stagers, cleaning services and contractors of all specialties. Agents often meet these people at the property and show them firsthand the issue that needs to be remedied. 

After inspections we counsel our clients which items are deal breakers and which ones the client can live with. We also aid in helping them determine the costs of the items that need to be fixed. Often, we call in an expert to offer a quote on the work. also talk to our clients’ lender to make sure all the things they need are satisfied so that our client gets the loan. Concurrently, we are also arranging for a title search to be done on the property. 
We will negotiate on our clients’ behalf and work to find a happy medium with the other side of the transaction, so that the end goal is met: a successful closing. 

We are doing all of this (hopefully with multiple clients and properties) while we continue to try to create more business in our pipeline, go to closings, write new offers, show properties, conduct open houses, and write/answer several emails and calls per day. 

In the midst of all of this, we are handling the associated paperwork documentation necessary throughout the transaction, for the state, ourselves, our clients, and our agency. 

Though this career affords a flexible schedule, the best way to think about our job is that we are always working; we make hay when the sun shines.

It’s a wonderful career, full of personalities, problem solving and negotiation. I’m proud to help my clients move to the next chapter of their lives.

Call Amy Krikken, The Rock Star Realtor/Better Homes and Gardens/Masiello if you wish to buy or sell. 207-317-1338

Friday, July 6, 2018

It’s summer! Take the plunge by Matt Trudel

Have you been renting, living at your parents, sharing a place with way too many roommates and are thinking it is time to purchase your own place?  There’s no better time than now to make that plunge and be on your way to home ownership. Here are some tips on a few things to do and a few things you should not do.   

First, check your credit score and history before getting pre-qualified. You want to make sure there are no errors or incorrect reporting that you need to fix. This will also give you your approximate credit score, so you can share it with whomever you plan to use to get pre-qualified. Getting pre-qualified before you start looking at homes is very important because you know what your purchasing power is and that it fits comfortably into your budget.

Once pre-qualified, there are a few things you want to avoid. Do not go out and make a large purchase such a new car, truck, atv, or boat. Doing so will likely affect your debt to income ratio, which can have a very negative affect on the amount you qualify for. 

Do not go out and apply for credit cards or other loans and do not run up the balances on your current cards. Keep them below 30% of their credit limit. These things can drop your credit score by multiple double digits, and perhaps disqualify you from being able to purchase at all.   
Secondly, it’s time to pick a Realtor® to work with on what is probably going to be the biggest purchase you will have ever made to date. This is something you should give some purposeful consideration.

It seems everyone knows a handful of Realtors® these days and there has been a large increase in the number of new real estate agents over the last two years. While working with a friend may sound fun, remember this is one of the biggest investments you will make and having someone with plenty of experience can be the difference in landing that new home you want or watching someone else get it. 
Once you choose a Realtor®, have a lender in place and are qualified to purchase, do not forget to review your budget and your targeted monthly expenses.

Discuss with your Realtor® what your closing costs will be and the various ways you can get someone else to pay them for you. This way you can keep your cash as a reserve. 
There are several options from the seller paying them to using the first-time home buyer program to get yourself $3500 towards your closing costs. 

There are various mortgage programs and lenders with title companies that offer group savings of up to $1000. Again, this is where an experienced Realtor® can help guide you through various options and save you a lot of headaches, not to mention save you a lot of money.

This article was written by Matthew Trudel, Broker-Owner Five Star Realty, Windham.