Welcome to the Maine Moves Real Estate Blog

When you are selling your home, the most important element involved is determining the asking price. Your Realtor® will conduct various forms of research in order to determine the value of your home and will then present you with their opinion of your home’s value. However, you have the final determination of your home’s asking price. Trust your Realtor’s® judgment, but make sure that you are comfortable with the outcome. It is your home  and only you can put a price tag on it. Your Realtor® will utilize various methods to determine your home’s market value. The real estate market is constantly changing and you should feel comfortable that your Realtor® takes the current market into consideration when pricing your home.

Pricing Techniques

Comparable Market Analysis (CMA)—A CMA compares the prices of similar homes in your area that have both recently sold and that are currently on the market. Realtors® calculate CMAs by analyzing the data they obtain on comparable homes and then coming up with a rough idea of what your home is worth, given its size and condition in addition to other local market conditions.

Appraisals—Although you will have to pay a few hundred dollars for a certified market appraisal, it can often be a worthwhile investment. A state licensed appraiser will conduct a thorough inspection of your home (including the interior), and will compare your home to others in the area that have sold in order to arrive at an opinion of value. Unlike a Realtor®, an appraiser will not be looking at the current competition. The appraiser will also provide you with a full report on your home and the criteria used to formulate the valuation. Because an appraiser’s sole duty is to value homes, and because it is the only opinion of value a lending institution will accept to loan money, an appraisal prior to listing can be a valuable tool in properly pricing your home.

Internet Pricing—A number of websites offer home valuation information for free or for a small fee. The big downside to these reports is that they don’t take into account the condition of the home or important factors such as nearby highways or power plants. Also, if you live in a more rural area it is likely that they won’t have any information on your area at all.

Scout Your Area—Looking at other homes on the market in your area not only enables you to check out the competition, it also gives you an idea of how your house compares in terms of location, size, amenities, and condition. Assuming all the asking prices were the same, would you buy your home or someone else’s? You might also see things other homes offer that you can easily and inexpensively add to your home in order to increase your home’s appeal to buyers.

Flexibility As a Factor—There will always be buyers who have needs that are not just reflected by a dollar amount. If you are willing to close either quickly or very slowly, you will attract buyers who have particular moving needs. If you have the financial resources, you might want to consider a lease-to-buy option for first-time homebuyers. If you have the ability to be flexible and meet a buyer’s intangible needs, then you will have the best chance of getting a good deal on the sale of your home.

Under Maine law, a seller’s agent has certain obligations to their client. The obligations are not merely one-sided, so when signing a listing agreement, the seller can also be assured of receiving a specific level of service for their money. The following list includes some of the obligations that a seller’s agent owes to their clients. They should:
• exercise reasonable care and diligence;
• deal honestly and in good faith;
• present all offers, notices, and other communications to and from the parties in a timely manner without regard to whether the property is subject to a contract for sale or the buyer is already a party to a contract to purchase;
• disclose material facts known by the seller’s agent;
• account in a timely manner for money and property received from or on behalf of the seller;
• be loyal to the seller by not taking action that is adverse or detrimental to the seller’s interest in a transaction;
• disclose in a timely manner to the seller any conflict of interest, existing or contemplated;
• advise the seller to seek expert advice on matters related to the transaction that are beyond the agent’s expertise;
• maintain confidential information from or about the seller except under subpoena or court order, even after termination of the agency relationship;
and
• unless agreed otherwise in writing, make a continuous, good faith effort to find a buyer for the property — except a seller’s agent is not required to seek additional offers to purchase the property while the property is subject to a contract for sale.

Now that you know all that you can gain from working with a seller’s agent and have decided that this is the kind of representation you want, make sure that you find an agent who is right for you. Primarily, you should look for an experienced agent who knows how to get a home sold.

A good seller’s agent should have the following experience and qualities:

• The agent or a member of their team should focus on listings for 50 percent or more of their business.
• A good agent conducts business with the utmost integrity and can provide multiple references to prove it.
• A good agent has a support staff for their business. This can be in the form of a team member, an assistant, a real estate partner, or even a virtual assistant.
• A good seller’s agent will have their own website address, is proficient using the Internet, and, as mentioned earlier, is able to do virtual tours with links to your listing.
• Find an agent who has been licensed for two or more years, who has had substantial business experience prior to working in real estate, or who works for a large company that provides the supervision and resources necessary to successfully market and sell many homes each year.
• A good agent invests in their business. Mailings, promotions, advertising, work in the community, custom stationary, and presentation packages are all investments that show an agent’s dedication to their business.
• You should find an agent who works full-time and is easily accessible.
• A good agent will have multiple advanced professional designations, or will be working towards them.

The following are some questions to ask a potential seller’s agent:

• What types of marketing do you utilize? Do you have a website? Do you network with other agents?
• How many homes have you or your company sold in the last year?
• What is your commission? How do you share the commission with the buyer’s representative?

If you choose to work with a seller’s agent, you will be required to sign a listing agreement. If the company you choose to work with asks you to sign an exclusive right-to-sell listing agreement, you are obligated to work with that agent alone to sell your home for a designated period of time. Even if you happen to find your own buyer, you will be required to have the agent represent you in the sale. One reason that you are required to sign this agreement is to ensure that the agent is compensated for all the time and money spent on marketing your home. Make sure you do your homework and find an excellent agent who will work hard to sell your home.

For many people, a condo may be a great choice. They are usually less expensive than single-family homes, they may be located in more convenient urban areas, and they are generally relatively low maintenance.

Condos sometime appear like single-family homes. They may have a garage, and sometimes the units are even detached, allowing you to save some money while still giving you the feel of a single-family home. Just like with newer versus older homes, there are definitely some pros and cons to buying a condo. Although they can be the hottest growing sector in a sellers market, they can also be the hardest to sell in a slow housing market.

While most single-family homes have certain unique characteristics that can be leveraged at the time of sale, many condos share similar attributes. For this reason, they can be more easily compared, tend to sell within limited ranges of similar comps, and allow buyers to comparatively shop around.

Pros to Buying a Condo or Townhouse
• They tend to be less expensive per square foot.
• They are generally more modern. Most condos have been built within the last 30 years.
• Often they include many amenities (pools, spas, gyms, tennis courts).
• Condos often have secured/gated buildings.
• It is an easy transition from renting.
• You can make almost any changes you want to the interior of your unit.
• The condo association takes care of the grounds maintenance and is usually responsible for repairs to roofs, decks, common halls, and plumbing and electrical into your unit (interior plumbing and electrical issues are the owner’s responsibility).

Cons to Buying a Condo or Townhouse
• You usually have walls that you share with neighbors (much like apartments).
• You may not have a garage or much storage space.
• You will be responsible for condo association dues. Those repairs we talked about earlier aren’t free — they are just split between all the unit owners and can range anywhere from $75 to $300 per month.
• You will have less privacy than in a single-family home. Much like in an apartment, you will have many neighbors.
• Condos generally appreciate slower than single-family homes and they are harder to sell in a slow housing market.

Newer Homes

The following are examples of what you might find — there will be older homes with these items and newer homes without them.

Pros
• They often include modern amenities (some with warranties) such as central heat and air, automatic garage-door openers, garbage disposals, and dishwashers.
• Room sizes are usually larger.
• There is usually more counter space in the kitchen.
• They generally include a laundry room.
• They come with more closet space.

Cons
• They are built on smaller lots.
• You will have closer neighbors.
• They might have less charm than older homes.
• They are generally inmore rural or suburban areas.

Older Homes

Again, the following are simply examples of what you might find — there will be older homes with these items and newer homes without them.

Pros
• You will often find a lot of building character (molding, paneled doors, hardwood floors).
• They may be less expensive.
• They are built on larger lots.
• You will have more privacy.
• They are often found in older, more established neighborhoods.

Cons
• They have smaller rooms.
• They come with less storage space.
• They may need more upkeep and maintenance.
• They will eventually need updated kitchens, baths, plumbing, and air and heat if these are not already done.

Homes come in all shapes, sizes, and ages. This is especially true in Maine. There are capes, colonials, ranches, New Englanders, farm houses, waterfront, old and charming, new and maintenance-free, condos, and multi-families. Deciding which type of home is best for you can certainly be overwhelming. There are some things to consider (besides style) that will hopefully help you narrow down your search to the homes that will best fit your family, your lifestyle, and your budget.

The first thing to consider is whether you need a single-story or multi-story home. Both have their advantages. With a single-story home, you generally have a more open floor plan, and for some people, not having to deal with tramping up and down the stairs is essential. For people who dread stairs, a single-story home may better fit their needs. The bonus of a multi-level home is that you generally get more square footage for a little less money. It takes less land to build up than to build out. And many of us could use the extra exercise!

Many of us are also faced with the decision of whether to buy a new(er) home or an older home. Again, there are pros and cons to both types of homes. Compare some of the differences between newer and older homes to see which of these best fits your needs.

Some homes are completely updated, while some are in need of brand new installations. Only you can determine your individual needs. If you have the time and skills to do major home improvement projects, and you are getting a good deal—go for it. Similarly, you should be careful that you are not overpaying for a house just because it has new carpet and appliances. Make sure to compare the interiors and take notes about how much you think improvements may cost (you can always get estimates later), so that you will know what you are really getting for the price.

The final step is to start comparing all of the pros and cons of each home you see. How much home do you get in one neighborhood compared to another? Keep in mind what is really included with each home. Keep a list and compare all the factors of the different homes you are looking at to help you decide which home suits your needs the most and at the best cost. Seeing as many houses as possible before making up your mind is essential. A good agent should be able to show you multiple properties in different areas and in different price ranges so you can reallymake the best decision. This is true even if you only have one day to look. We have had out-of-town buyers come and look at 10 different houses all over Maine in just one day. We took digital pictures and made numerous notes, so when they went home they were able to really think about what they wanted and what they could afford.

As you begin the process of actually looking at homes, you should start by visualizing your dream home. Write down every single feature that you would want in a perfect home. Maybe you want an extra large kitchen with an attached family room, a pool, or a large lot. Although you may not be able to find or afford some of these things, carefully considering all of your options will help both you and your Realtor® know what type of home will best suit your needs.

Once you have your list, the next step is to narrow your focus down to the items you can and can’t live without. If you are buying your first home, odds are that you won’t stay there for very long. You should be as realistic as possible, and know that you may need to sacrifice something big (such as size or location). But the important part is determining what items you can’t live without. Maybe it is a garage, a second bath, or just a place that is in move-in condition.

During this process, there will be many questions that you will need to ask yourself. Although your first home, or any home that you purchase may not be perfect, you deserve to find the home that best suits your needs at a price you can afford.

Some Preliminary Questions to Ask Yourself When Making Your Wish List

1. How long do you intend to stay in the home? The longer you intend to stay, the more important the long-term potential of a home will probably be. Although it may not be the size you need, if it has enough room for adding on at a later date, it may still be a good candidate.Also, if you are looking for a long-term home, it may be best to spend your money on a home that needs more work in the best neighborhood you can afford (thereby getting more for your money). If you are a first-time homebuyer, you will likely have more time and money over the years to make the house a true home. Conversely, if you anticipate not living in your first home for very long, finding a property in good condition for the right price may be more important.

2. Does your job allow for stability? Even if you want to find a long-term home, you must consider whether or not your job will affect this decision.

3. What are the needs of your family? If you have school-age children, you will want to consider the schools in a particular neighborhood. Will it be easy to move once your children are in school? You want to consider the difficulties of moving once your children are settled. You also want to make sure that you have enough bedrooms or maybe a yard and a basement. You may also need room for guests, a home office, or just room to expand when the time is right.

4. Where do you want to buy? Location is very important to most people. It can affect school choices, resale values, convenience, and peace of mind. You may have a perfect location in mind, but if you don’t, there are some things to consider. How far are you from schools and work? Would you spend too much time driving? Is the neighborhood quiet and family-oriented or urban and convenient? Do you prefer the suburbs, the country, or the city? You need to consider what will best fit your lifestyle. If you have medical issues, you may need to be close to your doctor or hospitals. Are there recreational activities in the neighborhood that are appealing and convenient?

5. How much maintenance can you handle? If you do not like to do home repairs and improvements, you may want to consider a new home or condo. Buying a fixer-upper is a lot of work, and any home takes a certain amount of work to keep it in good running order. If you are someone who isn’t particularly handy, you might want a home that requires as little maintenance as possible.

Once you have asked these preliminary questions, now it is time to make some decisions. Most people start by narrowing their search down to a few specific neighborhoods. Maybe you are from the neighborhood or are familiar with its schools amenities. If not, there are ways to research the neighborhood to find out if it will fit your lifestyle.

You can start your research by looking at neighborhoods on the Internet. There are sites that will give you populations, crime statistics, median incomes, recreation, and even local shopping availability.

Earlier we discussed the possibility of hiring someone to act as your buyer’s agent. A buyer’s agent is someone who agrees to fulfill certain duties to the buyer by entering into an agency relationship with them. If you are buying a home, there are many advantages to this type of relationship. You want to make sure that your interests are protected throughout the transaction. This is something that can be best achieved by hiring someone to act as your sole representative.

Buyer agency emerged in the 1980s as a way for Realtors® to provide better service to their clients. Prior to this time, agency laws generally offered many protections to sellers, while leaving buyers to their own devices. Most people believed (and laws were often written to the effect) that if the seller was paying the commission, then they were the person whose interests should be paramount. Unfortunately, this system left buyers without any real representation.

In response to this dilemma, Realtors® and homebuyers across the country began to lobby for statewide legislation to ensure that buyers had equal access to quality representation. These agency laws, as described in Chapter 1, gave buyers access to individual representation without the problem of their agents having fiduciary duties to the sellers. Such agents inform prospective homebuyers of anything wrong with a house and provide information about the neighborhood and the real estate transaction itself. Even though they are often paid by sellers, they have no fiduciary duties to the seller. In fact, they are legally obligated to both keep your information confidential and represent your interests alone in the transaction.

Having a buyer’s agent is valuable because they don’t care whether or not you buy any particular house, they just want to make sure you get a good deal on the home you do choose to buy. They are also better educated on conducting background research of properties to ensure that you are getting a good deal. Almost any agent can run “comps” (the comparable prices of similar homes recently sold in a particular neighborhood), but a buyer’s agent may also look at less common but equally important items that may affect a home’s value—such as whether the neighborhood is desirable in terms of livability and resale values.

For instance, as a buyer you may be caught up in the aesthetics of a home and forget about looking at some of the less obvious issues. One of our agents recently acted as a buyer’s agent for a couple who had found a beautiful six-year-old townhouse on the Internet and came to us to help them make an offer. After doing some background research on the property, the agent had to make the difficult decision to advise them against buying the house.

Although they were shocked at first, they came to understand the value of hiring a buyer’s agent. the agent’s research discovered several serious issues that could have had a significant impact on the resale value and, more importantly, the livability of the home. They had found out from neighbors that the homeowners’ association rules were rarely enforced, and the association itself was slow to respond to any problems in the community. There was also an empty lot adjacent to the house, which was zoned for commercial use. It was entirely possible that they could have built a supermarket or gas station right next door. After becoming better informed, the buyers were grateful that they had not purchased the property.

Another benefit that a buyer’s agent can provide is assistance in a competitive seller’s market. There is no question that the real estate market in the last few years has undergone a tremendous surge in home buying. Low interest rates and easy-to-qualify loan programs have created a highly competitive market for homebuyers. Having a buyer’s agent can be very useful if you are trying to outbid other buyers in a multiple offer scenario. In fact, if you are buying in a competitive market, you shouldn’t even consider any other type of representation. A buyer’s agent can help you structure an offer in such a way that it will get more attention by using better terms, less contingencies, or a price that suits both your needs and the seller’s desires.

A buyer’s agent can also be useful as a source of references for inspectors and mortgage brokers. Buyer’s agents generally work with teams of people that work together to make sure that you are well represented in all aspects of a real estate transaction. Beware of the fact that any agent can say they represent buyers. But without some kind of formal training or designations (see Chapter 1), there is no way to know if the person actually has any specialized knowledge regarding buyer representation. Having a buyer’s agent represent you throughout a purchase is like having a sophisticated negotiator on your side. There is no compensation difference between hiring a regular agent, or a buyer’s agent, so there is no reason not to make sure that you get the best representation and protection.

There is no doubt that the satisfaction of being an “owner” is one of the most wonderful aspects of buying a home. Knowing that the home you live in is completely under your control is very empowering to most people. If you want red walls, you can have red walls. If you like hardwood floors or you want to turn two small bedrooms into a large master bedroom, the decisions are yours to make.

Equally as important is the knowledge that any money you do spend on your home can be seen as an investment. New appliances or granite countertops generally add money to the resale value of your home. A home is one of the few investments in life that serves a purpose larger than the investment itself. It’s not just money in the bank, it’s a roof over your head.

Another important benefit of owning your home is being able to deduct the interest on your mortgage payments. This may be a larger financial gain than you think. Let’s say for instance that you have a $200,000 mortgage on your home. If you take out a 30-year fixed rate loan, for the first five or more years of that loan you will almost exclusively be paying the interest on the loan. This is because banks want to ensure that they get paid, even if you don’t keep the home for a long period of time. So banks charge the majority of the interest on your loan up front. If your monthly payment is $1,100, there is a good chance that about $1,000 of that payment is interest. Therefore, at the end of the year you could have a $12,000 deduction. That’s no small change.

Although there is no guarantee that your home will go up in value, if you are in a home for a long period of time, there is a good chance that you will also realize a decent appreciation in the property’s value. This means that there are two ways for you to build equity in your home. You can build equity by paying down your mortgage, or you can gain equity by the increase in the value of your home. You can then refinance (get a new loan at a higher amount, or get a credit line based on your equity) to buy other properties, fix up your home, or even send your kids to college.

However, there are potential drawbacks to home ownership as well. When you rent, if the light doesn’t turn on, or the toilet is no longer flushing, the first thing you do is call your landlord. If your landlord is any good (and complying with the law), they will quickly send someone to your home to repair the problem. If all goes well, this situation can create a pretty carefree way of life. The landlord may make the profit from your rent, but they also handle most of the hassles involved in maintaining the home. The same is not true when you are a homeowner. The house is yours to improve, but it is also yours to deal with when something goes wrong. If you have some basic skills, this may not worry you, but if you aren’t very skilled at fixing things or simply don’t have the time, you may be in for some big surprises. You will also need to be prepared for maintenance such as lawn mowing, snow shoveling, and roof leaks.

But don’t let us scare you away completely. If you would like to buy your own home, but are concerned about its condition and on-going maintenance, there are some things you can do. First is the fact that you have the right to have a thorough home inspection before you buy any property. A home inspection provides you with the opportunity to find out exactly what condition a home is in before you buy it (see Chapter 8 of our book, Buying or Selling a Home in Maine). If you are not the fixer-upper type of person, maybe a new or well-maintained home might be right for you. You can also purchase a home warranty, which protects you from plumbing, electrical, and appliance issues immediately after buying a home. Lastly, you can avoid a lot of maintenance issues by buying a condo or townhouse. Even though you would be responsible for any repairs to the interior of your home; yards, fences, roofs, and often plumbing are the responsibility of the homeowners’ association.

Another reality of being a homeowner is that when you want to move, you have to sell. Depending on the market, as well as other factors, selling a home can be easy, or it can be a very involved process. Unlike renters who can just give notice when a lease is up and no longer be responsible for payments, mortgage payments don’t end until you sell your home. If you need to move for work or personal reasons and for some reason your home does not sell, then you must still make the payments on your mortgage. You can possibly find a renter, but the reality is that your payments must be made on time for the duration of your mortgage, or you will lose your house and all of the equity you may have in it. So for a person who is not sure that they will stay in one place for more than a few months, home ownership is probably not the best option.

In addition to the costs of purchasing a home, there are costs involved with selling. Consequently, if you have only owned the home for a few months and you have not built up any equity in the home nor realized any appreciation, then it may actually cost you money to sell your home. The bottom line is that short-term home ownership is risky and may not be the best decision for some people.

So now that we have discussed the ways in which you can be represented, let’s discuss what specific qualities you should be looking for in a representative. Regardless of the type of agent you work with, there are certain qualities and attributes to look for that will make all the difference in your relationship with your Realtor®.

You may have seen ads for a Realtor® in a magazine or a flyer at the supermarket, but how do you know if that is the person you want representing you in a major financial transaction? They may have a nice smile, but how much do they really know? Knowledge is the key. Just as you wouldn’t hire an attorney because they were attractive or because they said they were the best, you should likewise not hire a Realtor® based solely on an ad you’ve seen.

Three important attributes of a good Realtor® that you should keep in mind are knowledge, organization, and availability. You want to know that your Realtor® can handle the oftentimes hectic pace of a real estate transaction. They need to know what listings are out there, what forms are needed for each step of the transaction, and they should be easily accessible to you if you have questions along the way. So how do you find this Realtor®? Well, a good Realtor® can be found in a variety of ways.

The first place to start (as with any professional you are looking for) is to get recommendations from a family member, friend, or colleague. Keep in mind, however, that it is important to find out what they liked about the person they are recommending. It is possible that you are looking for a different type of Realtor®. They may have loved their agent because they had an aggressive style and fought for every penny on their clients’ behalf, while you may be looking for someone who is easy to talk to and who will hold your hand throughout the process. Just make sure that your referral source is someone you trust and whose advice you value.

Another way of finding a Realtor® is to look for someone in your area who is known for being extremely knowledgeable on real estate. These people are often quoted in the real estate section of the paper, or on radio talk shows or television. Although thismay not tell you much about their character, it does give you a good idea of their level of knowledge. You can then meet with them and find out if they fit your other important criteria.

You can also talk to the “designated broker”, owner, or manager of a local real estate firm for a referral. Describe to them the kind of agent you are looking for and what your specific needs are. A good designated broker will know their agents well, the areas they specialize in, who is perhaps too busy at a particular time, and so forth. They want you to be happy and to refer other people to their brokerage.

The bottom line is that regardless of how you initially find your Realtor®, this is just the first step in the process. Before you hire any representative, you should meet with them, ask them questions, and then decide if they are the right representative for you. Taking the time and making the right decision up front can save you the hassle of looking for new representation in the middle of the buying or selling process.