Real Estate: Why homes come back on the market

By Carrie Colby

Why do pending home sales fall through?

When a buyer and seller agree on a home, everyone hopes things will go according to plan. Unfortunately, sometimes life throws you a curveball. Some issues can lead a home under contract to come back on the market, some more difficult to deal with than others.

Nobody wants to go through all the work of completing a real estate sales agreement only to fall short. Some of the reasons houses come back on the market are out of the seller’s control. Other times that is not the case. Right or wrong, sometimes houses that come back on the market are considered damaged goods. Remember, just because a home comes back on the market does not mean it is undesirable. If you can verify the issues that caused the original agreement to fail and that those issues have been resolved, such homes can still be a good buy.

Some of the most common reasons homes are back on market

There is a Problem With The Home Inspection. A home inspection will look at all of a home’s major components to identify any problem areas. Home inspectors can make mistakes from time to time, but generally, they are well-trained and competent—so if they find a serious issue, chances are it is worth worrying about.

Some examples of what home inspectors could find include the following:

Mold Found in The Home. Mold indicates moisture penetration which is undesirable for many reasons. Mold remediation is an option, mold can be remediated from your home fairly quickly. There are professional companies that provide mold remediation services.

The Septic System Fails. Every home needs a working sewer or septic system. Unfortunately, a poorly maintained septic system can fail. An inspection can discover such a failure and cause a buyer to back out of a transaction, but most issues can be repaired. The buyer and seller can negotiate and come to an agreement to get to the closing table.

Here is a great tip!

Get a home inspection before going on the market! Knowing the condition of your home before listing it for sale makes a lot of sense. It can save a lot of heartburn as well.

The Buyer Does Not Get Their Mortgage Commitment.

Mortgages are not fully guaranteed until the buyer has signed a final agreement with a lender. While buyers can get pre-approved and pre-qualified for mortgages, things can change between these pre-verifications and when the money needs to exchange hands. A buyer that makes significant financial changes, like losing a job, changing a position, taking out another loan, etc., may find that the mortgage they thought was a sure thing is no longer available.

Title Defects Are Discovered on The Property.

Title defects can be a real pain when it comes to home sales. There are so many ways that these can occur, so it is essential to conduct a title search as soon as possible. Title defects include illegal deeds, public records errors, unknown easements, forgeries, and more. The main reason to purchase title insurance is to help you overcome these defects, should they arise.

Misrepresentation by The Seller or Their Agent.

There are times when home sales fall apart because of misrepresentation on the part of either the seller or their real estate agent. There are lots of examples of how misrepresentation can take place. It could be factual, like the home’s condition or where the property line is located.

One of the more common misrepresentations in real estate sales is the number of bedrooms in a home. When selling a house, you are only allowed to market the number of bedrooms based on septic capacity.

Final Thoughts on Back on Market

Home sales fall apart from time to time for various reasons. In some circumstances, the deal could have been kept together with better planning. Back on the Market doesn’t mean the home is unsaleable and someone may have discovered all the reasons it failed to close, and those defaults have been fixed and the buyer will have an easier time getting the home to close. <

Carrie Colby is a Broker with Allied Real Estate, 909 Roosevelt Trail in Windham. She can be reached at 207-232-5497.

Real Estate: Be prepared when making or accepting offers

By Nicole Foster, Broker/ REALTOR

Whether you are a soon to be seller who has been working hard to prepare your home to hit the market or you’re a prospective buyer who has taken all the preliminary steps and is tirelessly looking for a home, it is important to prepare for the critical steps that lie just ahead. When the time finally arrives for you to work with drafting or responding to an offer or more than one offer, do you know what to expect?

In 2014, the Department of Professional & Financial Regulation Maine Real Estate Commission approved consumer guidelines for working with offers and counteroffers in a real estate transaction. These guidelines are required to be provided to clients and are often shared when you first enter into a brokerage agency agreement as a buyer or a seller. This four-page brochure includes guiding principles, as well as a list of commonly asked questions and helpful information that is specific to both seller and buyer clients.

This brochure is an excellent reference highlighting what options and obligations you have during the important offer and acceptance process during what can feel like a fast-moving part of your transaction. Take the time to familiarize yourself with this, especially if you are entering the market for the first time and be sure to ask your agent any questions you have about this part of the buying and selling process before getting started. When you know how offers and counteroffers will be handled, you will feel more confident in your decision-making.

The guidelines state that listing a property for sale is “an invitation by the seller for buyers to make offers”. When you begin to work with a listing agent, they will ask for your written permission to disclose the existence of a competing offer or other interest in your property, after discussing both the benefits and hazards of doing so. Disclosing that an offer has been made or received is not confidential and the agent must keep their client informed of stated interest in the property.

It goes on to emphasize that “the decision about how offers will be presented, negotiated and ultimately accepted or rejected are made by the client ~ not the agent.” Because the seller is not obligated to respond to an offer or to disclose the existence of a competing offer to buyers, it is important for buyers to understand they may not get the opportunity to change the terms of their offer after it has been presented to the seller and “….only one offer may result in the sale and the others will be faced with disappointment.”

It outlines that offers, counteroffers as well as the withdrawal of an offer should be made in writing to ensure that the terms, timeframes and legal obligations are understood by both parties. The terms in offers and counteroffers are confidential and may not be shared by the agent without prior written consent from the client.

The first or highest offer made does not bind or otherwise limit the seller to act upon that offer before considering any other offers. Sellers do not have to place priority on offers based on the order that they are received. Sellers are not obligated to accept a full price or cash offer and may accept an offer based on terms other than price.

A buyer or seller who is not represented by a real estate agent in the transaction is a customer, and not a client, who cannot receive advice or counsel from the agent who represents the other party. If you are a buyer who wants to write an offer while unrepresented by a real estate agent, the seller’s agent is permitted to help you by filling in the blanks on a purchase and sale agreement after providing you with a copy of the Maine Real Estate Brokerage Relationship form.

Ask your real estate agent about the best ways to develop a strategy based on the options which are listed in the Offer and Multiple Offer Guidelines and be well positioned to meet your real estate objectives when it is time to take action!

Nicole Foster is a Broker with Locations Real Estate Group and a Windham resident and parent who loves real estate and people. Call her at 207-615-7558 or visit www.LocationsInMaine.com

Real Estate: Conference outlines 2023 forecast for Maine

On Jan. 26, Tom Bartell, Executive Director, of the Windham Economic Development Corporation (WEDC) along with WEDC Board Members and Town Staff represented Windham’s Economic Development Opportunities while attending the MEREDA.org Annual Conference and Forecast held at the Cross Arena in Portland.

Over 800 of Maine’s real estate and development professionals gathered at the Cross Insurance Arena to learn about the latest trends and predictions for the real estate economy at the Maine Real Estate & Development Association’s (MEREDA’s) Forecast Conference and Member Showcase. MEREDA also streamed the conference for those who could not attend in-person. “Even though Sugarloaf was having an incredible powder day, there is no other place I’d rather be than the Forecast Conference,” shares MEREDA President Craig Young. “This is a day where you have great conversations and make great connections. You get to be in the room with the people who are driving responsible development in our state.”

With a dynamic lineup of industry experts presenting on the ins and outs of Maine’s real estate economy, the Forecast Conference provided an opportunity for real estate professionals to learn from each other and map out what lies ahead for their industry. The day began with a discussion of one of the most pressing issues in Maine: affordable housing. Keynote speaker Greg Payne, a Senior Advisor on Housing Policy with the Governor’s Office for Policy Innovation and the Future, said “We have got to rededicate ourselves to investing in affordable housing and working on solutions.” Payne went on to outline the ways in which Governor Mills has made a historic commitment to building more housing in Maine. “As big and frustrating as our housing challenges are, we’ve never been in a better position to do more,” Payne said, urging people to participate in the effort to ensure all Mainers have access to safe and affordable housing. Next, James Marple, a Senior Economist from TD Bank provided an economic outlook on both a national and state level, sharing an expectation for the economy’s growth to slow, the real estate boom prices to unwind, and for the labor demand challenge to continue to impact Maine’s economy.

Looking at the industrial sector, Justin Lamontagne and Sam LeGeyt of The Dunham Group reported on another healthy and competitive year that was also beginning to show signs of a plateau in the future. That said, demand continues to be there for industrial spaces, with Lamontagne wondering if there will be zoning changes to facilitate the conversion of office space into low-impact industrial use, and if speculative construction will move north where there is land to develop for new Innovation Districts.

Dava Davin of Portside Real Estate Group gave a presentation on the single family residential market in Southern Maine, an $8 billion market, succinctly summarizing, “In 2022, prices went up and sales went down.” Diving into the details, Davin put a spotlight on three “stand out” towns that were seeing incredible increases in home prices: Lewiston, Westbrook, and Cumberland. Looking at the luxury market, Davin reported that homes selling for over $1 million have tripled since 2019, and in 2022 the most expensive home sold in Maine was in Camden at $13.7 million. Predicting that housing prices will level off, there will be fewer transactions, and a return of the seasonal market, Davin sees less frenzy and more thought in 2023’s residential market. Especially since many Mainers cannot afford to buy the home they live in today, so they aren’t able to move anyplace else.

Bricks and mortar retail locations continue to create great demand in the Portland area, Peter Harrington of Malone Commercial Brokers reported. “The demand is there and it’s getting really expensive to get a retail space in downtown Portland.” With more national chains moving into the Old Port district, Harrington discussed how there is a need for a mix of retailers in the market. “It brings life; we need that at street level,” he said while recalling the old days when offices occupied prime locations and had their shades perpetually drawn. Harrington predicts that retail will continue to be a strong market with growth opportunities: its healthy demand is helping historic buildings get rehabilitated and bringing more people to shop and eat downtown.

Other presentations included Elizabeth Frazier of Pierce Atwood with an update on MEREDA’s Legislative Agenda. In the year ahead, Frazier said that MEREDA’s Public Policy Committee will be focusing efforts on reducing the barriers for housing creation and has three bills in the works for the upcoming session. Reporting on the Bangor area market, David Hughes of Epstein Commercial Real Estate cited the challenges of low inventory in the industrial and office sector, and also highlighted a few game changers for the area including downtown apartment conversions, the Maine Savings Amphitheater, and the transformation of Main Street. Brit Vitalius of Vitalius Real Estate Group provided a report on the multi-family market in Southern Maine, highlighting the incredible growth of Lewiston/Auburn in particular. In a look at the Central Maine market, Frank Carr of Maine Realty Advisors echoed the story Vitalius shared of a booming market in Lewiston/Auburn, and shared his outlook for Augusta and Waterville. Dave Holman of RE Max Riverside Commercial gave an update on the Midcoast Maine market, highlighting the renaissance that Bath is seeing, and outlined the exciting projects in the pipeline for the Brunswick area including a community recreation facility and housing for asylum seekers. Matt Arrants of The Arrants Company discussed how the return of business travel and international travel were impacting the Maine hospitality sector, predicting that Maine will continue to be a popular travel destination and lamenting the labor shortage for hotels. Nate Stevens of The Boulos Company provided a report on the Southern Maine Office Forecast, saying that there are still a lot of unknown questions post-pandemic. Outlining the difference between downtown Portland and suburban markets, Stevens sees opportunities for conversions to housing and industrial spaces, and opportunities for office tenants if they know where to look.

Overall, strong demand and limited supply continue to shape many of Maine’s real estate sectors. How that demand will continue to drive growth is one of the remaining questions. What’s clear is that MEREDA members will be working together to ensure that growth will be defined by responsible development, which must include more affordable housing for Mainers. Sponsors of the event include TD Bank, Mainebiz, The Downs managed by Maine Properties LLC, Bangor Savings Bank, FirstPark Business Park, Haley & Aldrich, Landry/French Construction, Partners Bank, and Pierce Atwood.

The Maine Real Estate & Development Association (MEREDA) is a non-profit entity whose members – commercial real estate owners, developers, and related service providers – banded together in 1985 to found the first statewide association established specifically to present the views of participants in the state’s commercial real estate industry to lawmakers in Augusta.

MEREDA’s mission is the same today as it was at its founding – to promote fair and responsible development and ownership of real estate throughout the State of Maine. MEREDA remains firmly committed to vigorously presenting the views and concerns of its members on issues that affect them to state lawmakers and other government officials, and advocating effectively on their behalf. <

The above article and information has been authorized for reprint by Shelly R. Clark, Executive Director, of MEREDA.org.

Larry Eliason, a Windham Resident, is a Commercial Broker with Butts Commercial Brokers and is currently President of the Windham Economic Development Corporation (WEDC), a subsidiary of the Town of Windham.

Real Estate: New Year and a Fresh Start

By Matt Trudel

2023 is off to a solid start considering where interest rates are at currently.

Many home builders are already booked out for this year. There are still some issues with getting certain materials for new construction and remodeling jobs. Cabinets, doors and windows are just a few of those items. All in all, I feel 2023 should be a good year for the real estate market. Not as good as the last couple of years but holding steady pricewise in our area.

So, what should someone do to be sure they are ready if they want to buy a home for themselves this year? And what about if your credit is not so credit-worthy shall we say?

Reviewing your credit score is certainly one place to start. Ideally you want to have a FICO score of 700 or higher. A score of 680 to 700 is still very good. I have gotten buyers financed with credit scores as low as 640, and on occasion with a score just over 620. That was the extreme exception to the general rules. So, what if your scores are not quite high enough, what can you do?

Working with an experienced real estate agent who understands how credit reporting works is one step. Another is finding a good lender who has some experience in helping assist buyers in improving their scores.

Most seasoned realtors have one or two lenders they know and trust to assist in this process. It usually is not a quick fix in most cases, however, every situation is different and requires its own set of strategic moves to make the biggest impact in the shortest period of time.

Having high balances on credit cards or store charge accounts is very common and has a huge impact on your credit scores. Often it is much worse than missing a payment. Missing a payment and being more than 30 days late will likely drop your score 70 to 80 points. Having high balances can bring it down 150 to 200 points.

The good news with problems is there are many creative ways to address the situation, I have even seen it resolved by rolling the entire balance of two credit cards into the mortgage of the property being purchased. There are several other methods that take a little longer or you can always shake the family tree to see if a family member can help out temporarily.

Delinquent items are much trickier, especially if they have gone to third party collections. You really have to study your credit report to see when these items are reported. These are always handled on a case-by-case basis and almost always individually. You can negotiate these down and sometimes get them to remove some of their reporting dates to the credit bureaus.

Paying all of them off is not always a good idea as one might think. It is how they are reporting that means the most. You could have an old account in collections, but it hasn’t been reported in five or six months or maybe longer. By calling them and possibly paying it off it is likely it will get reported again and refreshed as a new negative item.

Medical bills are another common problem we find. Generally, these are fairly easy to work with and once paid you usually can negotiate the removal from your credit report. They can also be explained to a lender as to what the medical issue was, and the surrounding circumstances that caused the delinquency to occur.

The lender can then run your credit and take those delinquencies out of the equation and get a new updated score that might put you over the top and get your approval to move forward.

There are many different ways to attack any or all of these issues. The key is to work with someone who has some knowledge of how to navigate down those paths and assist you in doing the right things. A knowledgeable lender and experienced real estate agent are a great place to start if you find yourself in this situation. Don’t let it overwhelm you or discourage you, just take it one step at a time and you will achieve your goal of owning your own home. <

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