Friday, April 26, 2019

Three reasons to hire a REALTOR® to sell your home

By Sarah Nielsen

We are living in an age of DIY where many people would rather save money by completing a task themselves rather than hiring a professional, but when that task involves selling real estate, it is best to hire a licensed Realtor® who understands the process inside and out. Real estate transactions are complex and forgoing an expert’s guidance can cost you. The standard commission a REALTOR® will charge to represent you is five to six percent, but when you consider the ways that investment in a professional can save you in liability, time, and money, you may rethink trying to sell your house on your own.

REALTORS® can protect you from liability

In order to become a REALTOR®, a person completes extensive training in how to navigate the market. From adhering to deadlines, to properly filling out contracts and forms, REALTORS® fully understand how to protect their clients from the legal consequences of not abiding by state laws and regulations. When a client makes an offer on a home and it is accepted, they enter into a legally binding contract and it is the job of their trusted REALTOR® to ensure that there is no breach in that contract. If a person is selling their home on their own, it is likely that they do not understand the significance of the established deadlines, or consequences of pulling out of a transaction after the inspections and appraisal have been completed. Nobody wants to be sued, so it is best to hire a Realtor for protection.
Selling a home is a full-time job

Deciding to place your home on the market in the easy part, but what happens next can be daunting if you do not understand how the process works. Some questions to consider when listing: how will you market your home to get it in front of as many buyers as possible? How will you ensure that you have all your legal paperwork in order? How will you coordinate showings, especially if you work a full-time job? How will you negotiate with buyers, or the agents representing them? If the answers to these questions leave you feeling overwhelmed, it is best to hire a REALTOR® who can handle all of these tasks with ease and confidence.

REALTORS® can save you a lot of money

According to the National Association of REALTORS®, “the typical FSBO (For Sale by Owner) home sold for $200,000 compared to $265,000 for agent-assisted home sales.” The reason for this is that REALTORS® know how to evaluate the market and best determine the price that buyers will pay for any given property. REALTORS® know how to use a Comparative Market Analysis to set expectations, which leads to less time on the market, and more activity on a listing. Realtors also have professional contacts such as home stagers and photographers who can ensure that your home is properly showcased to get you the most money possible.

In summary, if you do not wish to risk being sued, do not want to work two full-time jobs while your house is on the market, and want to save money, my advice is to hire a licensed Realtor who will happily take on the responsibilities of selling your home so you can focus on the next chapter of your life without added stress.

Friday, April 19, 2019

The impact of Marijuana on commercial real estate

By Larry Eliason

The State of Maine has passed legislation for both medical marijuana and recreational marijuana.  A multitude of rules and regulations such as licensing of retail shops, cultivation, manufacturing, processing and warehousing have been passed.

Although medical marijuana is fairly well-established, the implementation of recreational “adult-use” in Maine has taken a very long time to come to fruition. There are many business owners, real estate investors and individuals on the sidelines still waiting for adult-use legislation to actually kick-in.

In addition to Maine state laws, many local towns have adopted or are in the process of adopting guidelines on where these facilities can be located. Many towns like Windham, have engaged a board of volunteers to look at zoning and regulations to help develop ordinances for the community. Maine towns have an opportunity to review and consider “opting-in” to capture the economic development force this industry has to offer such as: good paying jobs with benefits, commercial real estate tax base, business equipment tax base and some potential tax on the sale of the end product.

At the federal level, marijuana remains a Schedule I controlled substance so transactions involving marijuana activities could violate federal anti-money laundering statues.  Nonetheless, the marijuana industry is growing exponentially, and people are lining up to get into the business and/or invest in it.

How does the marijuana industry affect commercial real estate? The marijuana industry needs commercial real estate to grow, cultivate, warehouse, manufacture, process, extract and sell a variety of products. Many of these commercial building occupancies are, in essence, indoor marijuana farms.  So, the “pot guys” are actually farmers in addition to being entrepreneurs.

In states, cities and towns where cultivation and the manufacturing and processing of cannabis is legal, the marijuana industry has caused a spike in commercial real estate leasing activity, leasing rates and also commercial property values.  Many retail spaces have already been converted to medical cannabis stores and warehouses and industrial properties are being repurposed for cannabis cultivation.

Now, since marijuana can’t be transported across state lines due to federal law, it must be sold and consumed in the state that it was cultivated. Just as specialty beer breweries have helped revitalize some of the older commercial and industrial districts, so has the marijuana industry.  

Unfortunately, Maine has lost a substantial amount of manufacturing jobs of the past several decades.  The traditional manufacturing jobs are now being replaced with jobs like marijuana retail, cultivation and manufacturing jobs.  It appears that some of those jobs are very good paying jobs and, in many cases, with health and dental plans.

In many states like Maine, property owners who are considering transacting business with the marijuana industry need to plan for the conflict between state and federal laws. Banks with federal charters and that are also regulated and insured by federal agencies, can’t do business with marijuana business owners.  However, more and more state-chartered banks in states that have legalized marijuana for medical or recreational use, are willing to work with the marijuana industry and its commercial landlords. And, there are also credit unions that offer deposit relationships.

Where banks are unwilling to lend money to cannabis industry operators, owner financing and other private lenders are a source of loans for commercial real estate transactions. Landlords that are fortunate enough to own their properties outright can lease space to marijuana businesses without the risk of having a commercial lender call their loan due to federal banking laws that may apply.

Commercial warehouse and industrial leasing rates that were traditionally $5 to $6 per square foot for many years in the Greater Portland market have approached $10 per square foot.  In some cases, a turn-key facility may fetch up to twice this amount as it saves time and money for those looking to set up an operation for cultivation and they do not have to make an expensive fit-up and/or make leasehold improvements out-of-pocket.

Just like when you engage a commercial real estate professional to locate commercial space for lease or a commercial property to invest in, you should also engage your accountant, real estate attorney and banker to seek advice and guidance on making a decision to participate in this fast-evolving industry.

Larry Eliason is a Commercial Broker® with Butts Commercial Brokers® in Raymond, Maine and serves the Greater Sebago Lakes Region.

Friday, April 12, 2019

$100,000 reasons to buy and sell this spring

By Matt Trudel

There are a lot of reasons why people decide to buy or sell a home. Sellers may want to upgrade to a larger house or perhaps downsize to a smaller one, depending on if the family is expanding or shrinking in size.

There are the financial reasons for wanting or needing to sell. Those can vary from getting a large promotion at work to losing one’s job.  It’s probably one of the top five questions buyers always tend to ask, “Do you know why they are selling their home?”  Sometimes we may know or can speculate given our experience and local knowledge. 

A client of mine purchased a house through me a couple years ago. It needed a lot of work and was a total dump in my opinion. (Hopefully he won’t be mad that I said that if he reads this) He has done a lot of work to the house, fixed many things and made a lot of improvements. We talked about a month ago and he asked what I thought about him selling his house. I told him it was a great idea if he was okay with moving, and of course it might be hard to find a good deal in this market. 

The upside is he is selling in what’s probably close to the peak of the market, and he had owned his house over two years, so he wouldn’t have any capital gains on the nearly $100,000 he would make in selling. 

“Find me another house” he said, “and let’s do this.”  So that is what we did, we found another house that needs a little work, and he is on his way to solidifying that financial move. Pretty good reason for selling.

Some buyers would hesitate at purchasing his home, stating he is going to make $100,000.  He can obviously accept less; he doesn’t need to make that kind of money. It would amaze you how often it happens that the amount a seller is going to make would affect a person’s decision on purchasing or not purchasing a home. The value of the home is what the home is worth and keeping that in my buyer client’s mind is always a priority. Let’s not worry about the reason that someone is selling or how much they are making.

Some good reasons that buyers may want to know why they are selling is if the neighborhood is dangerous, there are issues with association and a large assessment is looming in the future, and the list goes on for miles. These are all things that a good buyer’s agent will research for you so that you can make an informed decision based on facts. My point is that there are multiple reasons sellers want to sell. You are better off making your decision to purchase a home based on solid research, assistance from an experienced broker, and your own personal desires for a new home. 

If you are thinking about purchasing a home this spring or summer, one of the first steps is finding an experienced broker that you are comfortable working with to help you through this process. 

This article written by Matthew Trudel- Broker/Owner Five Star Realty, Windham 207-939-6971

Friday, April 5, 2019

Are you ready for home ownership?

By Rick Yost

One of the lessons we are taught early in life is the value of home ownership. We are taught that it is a goal we should all strive for and accomplish as soon as possible. The younger the better. But the rules have changed a bit. It is time to evaluate whether you are ready to buy a home or not and there are several questions you must ask yourself to determine your readiness. The trick is to answer the questions honestly.

Can I afford it?  

You can find mortgage calculators on line everywhere. Find one and plug in some base numbers such as how much you have for a down payment, what current interest rates are, what homes you would want to own cost in your area and get an estimated payment. Did you get sticker shock?  If yes, you’re not ready. The truth is - interest rates are low, and rents are high. You may be able to afford more mortgage than you think.  

Do you know the true costs of buying a home?  

You have the down payment, but there are many other costs associated with closing on a home. You will want a home inspection. Your mortgage company will require an appraisal, pre-paid property taxes, pre-paid mortgage insurance, title insurance, and an origination fee.  You also must pay the title company to do your title search, have a mortgage survey done, handle the closing. All these costs add up quickly to thousands of dollars. If you’re ready to buy a home, you will have these costs saved also.

Do you have some extra? 

It is important to have a small emergency fund on top of your other expenses associated with buying a house. Emergencies happen, and you should have a savings account just for them.  Many things can pop up when first moving into a house, it is important to have the ability to cover those expenses when they arise.

Is the home going to be an investment?  

A home can be a fine investment, but it is not very liquid. Your ability to pull profits from a home are limited. There may be better places to put your money in the short or even long run if you are simply looking for an investment vehicle. Make sure you are buying a home to be a home. It is the only way you know the cost is justified.

Those are the tough money questions that you should ask yourself prior to purchasing a home.  There other questions that are very important but these are more personal and emotional questions you must consider as well.

Are you going to be happy living in that area for the next five to ten years minimum?  

Buying a home is very much a commitment to an area and its school system if you have or are having kids. As your life changes, will the area meet your wants and needs.  A condo in the Old Port at 25 might be great, at 35, not as much, and at 45, no thanks. If your job is not stable, your interests are ever changing, or you yearn for far-away places, you are probably not ready to buy a home.
Are you going to have time to care for a home? 

Maintaining a home is a commitment that costs either time or money;  a lawn to mow, snow to shovel, repairs to be made, and general upkeep to do. If you are not ready to make that type of time or money commitment, you are probably not ready to buy a home.

Are you buying for the right reasons?  

Homeownership is not for everyone. You shouldn’t buy just because you are a certain age or making a certain income. We have always been told that homeownership is the goal, but maybe it shouldn’t be your goal. At least, not right now.

Rick is a realtor, real estate author, and long-time Windham resident.  You can reach Rick with all you real estate questions and needs at