Home Buying

3 Tips to Buying Maine Waterfront Properties

Buying Maine Waterfront Properties

Waterfront property in Maine is equivalent to “white picket fences” for the rest of the U.S.: it’s shorthand for “perfect”. In the depths of winter, with all the snow we’ve received lately, it may be hard to imagine yourself swimming, boating, or just floating in the sunshine, but all of those things and more can be yours when your home is on the water. However, not all Maine waterfront property is the same. Working with real estate professionals who understand the intricacies of buying waterfront property can help save you a headache. Here are just a few of the things you will want to research and consider before you buy.

Water depth and/or tides

If you plan on keeping your boat nearby it’s important to know the average water depths in ALL conditions. Different boats require different depths -- a sailboat can’t get as close to shore as a pontoon boat. How you will put your boat in and get it out of the water, and how often you need to do this, are very important considerations. Find out what the channels to open water are and whether they are always available. http://www.maine.gov/ifw/fishing/lakesurvey_maps/ can show you relative depths of Maine’s lakes and ponds, but it won’t show you every rock lurking beneath the surface. Tide flow, dams and meltwater can also affect the water depth (not to mention the land-to-water ratio) of your property and impact your recreational plans.

Swimming

You might think waterfront property in Maine and swimming would go hand-in-hand, but this is often not the case. Access to the water can be difficult. Is it a sandy beach with a gradual incline or a steep drop-off with lots of trees and rocks? The water itself may not be suitable for swimming. It could be stagnant with lots of weeds, or else have a strong and dangerous current. Will you need to put in stairs or a dock or float just to get to the prime swimming area? If you’re fortunate to have ideal swimming at your property, you may face a different issue entirely if others help themselves to swimming access from your property.

Restrictions

Waterfront properties have stricter zoning restrictions than not. Erosion control and other protective measures may preclude your plans for a dock or pier. Certain wetland and shoreland restrictions can even prevent you from doing home improvements or boating and fishing from your property. The State of Maine website is a good place to start researching such restrictions: http://www.maine.gov/dep/land/slz/index.html, but be sure to check with the local town as well.

There is a lot to consider when buying Maine waterfront property. But if it’s always been your dream to go to sleep with the call of the loons in your ears, then it’s worth the effort to own a home, camp or cottage on the water. If you haven’t talked to one of our real estate professionals yet, contact Coldwell Banker Plourde Real Estate and search our listings for waterfront properties

Am I Ready To Buy Property?

Ready to Buy Real Estate

So, you're tired of renting and would rather see that monthly payment go toward a home of your own rather than continue to line the pockets of your landlord? Before you sign those mortgage papers, let’s take a hard look at a few things:

  1. Are your finances in order?
  2. Do you have money saved for a down payment?
  3. Can you afford the monthly payment without changing your lifestyle?
  4. Are you committed to living in the same place for the duration?
  5. How are you at maintenance?

Fix your credit rating

Review your credit report and FICO score. Fix any problems, and dispute any mistakes well before you talk to a lender. Mortgage lenders are looking for you to display a record of financial stability, so don’t move money around or close up credit card accounts just yet.

Start saving now for a down payment

If you can put down 20% of the cost of a prospective home, then you will have more options than someone who cannot. 20% is usually the cutoff to not be charged mortgage insurance, but even 5-10% down can mean more choices in lenders. The more you can put down, the better off you will be; however don’t completely drain your emergency reserves or you could end up in trouble down the road.

Figure out your debt-to-income ratio

You’ll want to do this for your current (pre-mortgage) debt and income as well as for your future (post-mortgage) debt and income, as prospective lenders will be doing the same. You want about 36% of your monthly income going toward your debt and other regular obligations. Any more than 43% and you will probably have a hard time getting a loan. Chances are that if you could do anything to raise your income in a significant way, you would have done that already, so work to reduce your debt as much as possible.

You’re probably going to be there for a while

In general, you want to plan on keeping new property for at least five years. Most people should probably think even longer term (10-20 years). As long as you’re continually improving your property to some degree, it will continue to gain value, and the longer you can hold onto the investment, the better the payout will be. This means that you’d better like the neighborhood, because you’re making quite a commitment to it.

Every house is a fixer-upper

One of the most easily overlooked -- or at least overestimated -- aspects to buying your own home is your ability to fix things when they break. If you don’t know how to repair a leaky faucet then you’ll want to learn, because calling the landlord to fix it is no longer an option. That doesn’t mean you have to do it all. But after the fourth or fifth call to the plumber, you’ll probably want to start learning how to fix things yourself. And every house -- no matter how old -- is going to need a fix sooner or later.

Being a homeowner is both rewarding and affordable -- if you go into it with full awareness of the pros and cons. Asking yourself these questions and answering them shouldn’t scare you off from buying a home, but will hopefully lead you to making the right decision at the right time.   If you have questions, contact us today. You can also read all of our blog posts here.

3 Things to Consider when Buying a Home

What to Consider When Buying a Home

Buying a home is (usually) the largest, and longest financial commitment of one's life. In a world of impulse-buy-oriented consumerism, a house purchase should be the least impulsive, most well-thought-out investment of your hard-earned money you make. You need to do your homework and get a really good understanding of the debt-to-income ratio your finances represent, the budget you can afford, as well as the associated costs you will have to deal with: closing, moving, maintenance, insurance, etc.

Here are three things to consider before you go house-shopping.

What's your Credit Score?

Unless you're independently wealthy, you are going to have to borrow the money to purchase a home. And to do that, you need good credit. The better your score, the better your opportunities for a favorable loan with good terms. Know your current score, and know where you need to be before you start talking to lending agencies.

Prepare a Down Payment

A down payment of 20% of a home's purchase price can put you in a much better position with the mortgage company. While there are a few ways to get the money for a down payment, nothing beats good old ahead-of-time saving. Also, different types of mortgage have different down payment requirements so you may not need as much as you think. Start setting aside money now, if you haven't already. This can keep you from having to borrow, taking it from your retirement account, or going in with a low down payment and having to pay for mortgage insurance.

Hire a Real Estate Agent

When you're ready to start looking, hiring a buyers' agent is one of the best financial moves you can make. A real estate agent is dedicated to finding the right home for you, negotiating on your behalf, and helping you navigate the sometimes turbulent waters of the housing market. The professional know-how of a buyers' agent will save you hassle, mistakes, and money.

If you have questions, contact us today. You can also view all of our blog posts here.

Real Estate Investment 101

A home for sale.

Investing in any type of real estate can be a profitable venture; however, knowing key aspects of the practice makes all the difference when it comes to being successful. Here are a few elements to keep in mind before buying real estate and/or selling real estate in todays market.

  1. Know the Neighborhood. Be sure to get a good feel of the neighborhood before purchasing a house for investing. Know the demographics, school zone, income, housing marketing, etc. This will help project into possible future investment benefits.
    • Make sure there are not a high number of vacancies already available in the area. This may mean a lack of interest in the majority of homebuyers in the area. Choose a well-populated neighborhood that has a low turnover rate when it comes to moving.
  2. Have Goals. Create long- and short-term investment goals. This will help gauge a workable plan of action and will provide motivation to stick with this plan. It may be important to work alongside a professional Realtor, like one from Coldwell Banker Plourde Real Estate, to determine the most profitable and realistic goals for a specific situation.
  3. Sorting Through Legalities. Develop a professional relationship with a real estate lawyer who has an extensive amount of knowledge and experience in real estate investment. A real estate lawyer can help develop contracts, answer legal questions, paperwork, etc.
  4. Get Pre-Approved. Before looking into any investment plans, get pre-approved for a loan or mortgage. This may reflect a more financially-stable individual, aiding in the offering and buying process.
  5. Comfort. Get comfortable with a property before buying. Visit the house more than once and really get to know the workings of the property. Rather than purchasing on impulse, it is best to always ask questions, familiarize with the neighborhood and the surrounding homes, and become at ease with the homes qualities. This can help provide a deeper insight before investing.
What are your thoughts on investing? Are you seeking to invest in real estate? Let us know in the comments! Please feel free to also let us know your thoughts on Twitter and Facebook.

How to Read a Home Inspection Report & What to Focus On

383520_9918Having your home inspected is a critical part of the home buying process, as is finding a trustworthy and competent inspector. Just as important, however, is understanding the report when it is finished. Here are some suggestions on reading it correctly and identifying the most important elements of the document. Reports are usually presented in a checklist or narrative format. A narrative provides more specific and detailed information about the inspection. Realestate.com mentions that some reports highlight the homes issues rather than its strengths. Let the home inspector know that you want both reflected in the report. They advise that it will be easier to judge the state of the home if the report includes the positives as well as the problem areas. When reading the report, focus on potential health hazards and the most costly problems first. Multiple sources, including Angies List and My Move, concur on the most important elements:

Electrical

Your electrical system must be up to code. As described by My Move: It is critical that the electrical system can handle modern homeowners needs. Many homes have inadequate and outdated electrical systems.

Roof & Chimney

My Move warns that a faulty chimney is a prime cause of house fires. Angies List advises that the inspection be carried out on a rainy day to catch leaks or potential water damage. If this didnt happen, make sure that any water damage issues or concerns have been addressed.

Mold, Mildew, or other Health Hazards

Mold and mildew, while unsightly, and unpleasant to smell, can become a far more serious problem. Other contaminants such as radon gas should also be looked for. Many of these could become deadly if ignored.

Plumbing

My Move warns: Faulty plumbing can lead to huge repair bills. Make sure that water pressure and drainage have been addressed in the report. Angies List also highlights the importance of checking the pipes outside the home as well. Ask for clarification when and if you need it; get the most from your home inspection report. As Mortgage News Daily writes: The best inspectors are also teachersyou will learn a lot about your house and its systems. As Realestate.com suggests, keep the report as a valuable resource to be referred to later: A thorough report may contain up to 20 or more pages, detailing items that need adjustment, service or cleaning. The summary punch list, detailing the inspectors concerns, is a valuable reference for future home maintenance needs. Remember, if the report leaves you with questions, ask them. A home inspection is only worth the help that it gives the homeowner (potential or otherwise.)

 

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          Ups and Downs of Your Credit Report: Mortgage Loan Dos and Donts

          money-256314_640When applying for a mortgage loan, it is in your best interest to be familiar with your credit report and hopefully possess a strong score. Your credit score correlates directly to loan opportunities, favorable rates, and the chance to establish revolving credit accounts. Mortgage Calculator suggests acquiring copies of your credit reports from all three major credit bureaus (Equifax, Experian and TransUnion) and reviewing them before applying for a mortgage. Look carefully for errors which occur in an estimated forty percent or more of all credit reports. Sheyna Steiner at Bankrate.com writes: investors demand higher yields from risky investments. This applies in the mortgage lending arenaLenders prefer borrowers with low balances, a long history of on-time payments and a mix of credit utilization -- for instance, a car loan and a couple of revolving accounts such as credit cards. The following a list of suggestions from Bankrate for keeping your credit score stable and ways to improve it:

          Avoid late payments.

          Paying bills on time is very important in maintaining a strong credit score. Blake Ellis for CNNMoney writes that payment history accounts for approximately 35% of yourscore so late payments on credit cards, student loans, mortgages or even doctors bills can all bring down your score if the company reports it to the credit bureaus.

          Keep inquiries to a minimum.

          Whenever you seek to open a new line of credit, an inquiry is made into your credit report. Inquiries typically stay on the report for two calendar years. Excessive inquiries in a short span of time are frowned upon. Ellis explains that: continually adding to your potential credit [is something] credit companies are going to look atas a risk. The concern is that you could become overextended at some point.

          Keep card balances as low as possible.

          Keeping credit card balances low, or even better, carrying no balance at all, shows you to be a lower risk for financial institutions. Mortgage Calculator advises: Carry low credit card balances, or pay them off, along with any other outstanding bills before applying for the mortgage. Ellis recommends keeping your balance low to ensure your credit utilization ratio (or percentage ofyour credit limit that you use) is in check. He writes that: with other measurements of your overall debt, this ratio accounts for about 30% of your credit score.

          Don't close your unused accounts.

          As surprising as it may seem, closing a line of unused credit can actually hurt your score. It can affect your credit ratio negatively, (giving you less potential credit to counteract the balances you could be carrying.) Mortgage Calculator counsels that a: positive credit score is a reflection of a good, positive standing with every creditor the consumer deals with, regardless of the account activity. The longer you maintain a positive credit history, the better the influence on your score. In essence, it is a good idea to keep old accountsopenrather than terminating the [unused] account these cards should be put away and the consumer should refrain from using them. Your credit score shouldnt be something you are afraid of and put off looking at. The more quickly you recognize problem areas, the more quickly they can be addressed. Remember these tips when preparing to apply for a mortgage loan and use the suggestions above to maintain your healthy credit score, or improve it if necessary.

           

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                                What To Ask A Potential Home Inspector

                                road-sign-63983_640Buying a new home can be an intimidating and complicated experience. Finding a home inspector should not be. Ask your real estate professional for a recommended list of home inspectors to interview. Below is a list of possible helpful questions a prospective home buyer should ask a potential home inspector before hiring him or her. Steve McLinden at Bankrate advises that at least three inspectors should be interviewed and that they provide sample reports and references.

                                Are you certified?

                                Michelle Sturdevant writes that if a home inspector isnt certified, dont bother asking more questions. This is an immediate sign not to employ this contractor. Under no circumstances should a person buying a new home employ an inspector who is not certified.

                                How many inspections have you performed and how long have you been in the business?

                                McLinden recommends asking first about the inspectors previous experience. He writes: To be safe, stick with a full-time inspector who has been in the business for more than five years. McLinden also advises that inspectors be questioned about their professional certifications.

                                Is your experience specialized to a particular kind of house?

                                Sturdevant also offers this tip, which is acutely important when buying a new home. The question references residential or commercial real estate. Make sure your potential inspectors are familiar with residential properties.

                                How do you keep abreast of changes in industry standards, codes, and construction advances?

                                4 Square Home Inspectors maintain a continuing education program and advise that potential home inspectors should as well. Make sure they demonstrate an up-to-date knowledge of standards. Sturdevant mentions an advantage of new inspectors, who can be very knowledgeable and may even bring another inspector to the walk through.

                                How long will the inspection take and should I be present for it?

                                CJR Home Inspections set of questions include this one. They also answer it: The size of the house, its age, and your involvement in the inspection [are all time factors]the average sized house takes about 3 to 5 hours including a conversation at the end. Sturdevant is adamant about a clients presence at the inspection. Do not miss the opportunity to be present at this home inspection. This is valuable information you need when purchasing your home. Take these questions into account when you are searching for a home inspector. They will help you make a better informed decision and will save you time and frustration in the long run. If you have any questions, contact Coldwell Banker Plourde Real Estate. We will connect you with one of our qualified real estate professionals.

                                 

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                                      Buyer's Agent

                                      Do I have to use the real estate agent on the propertys sign? home-167734_640 Absolutely not! A lot of the time buyers think they need to use the agent whose sign is out on the front lawn of the property that they want to purchase. This is not always in your best interest. For years a real estate agent always represented the seller of the property (listing agent) and owed their fiduciary duty to them. A number of years ago, buyer agency was established in Maine and now buyers are allowed to be represented by their own agent (buyer agent). Each has a fiduciary duty to their client and must look out for their best interest. Maine also allows for Disclosed Dual Agency which allows the listing agent to work with you as a buyer agent but is only able to offer limited representation on either side. First it must be agreed upon by both parties before an agreement is signed and then the dual agent is not allowed to discuss price, terms, or motivation of either of the parties. It is usually best to have the conversation before you look at any property and find a buyer agent to represent you in what may be one of the biggest purchases in your lifetime. Using a buyers agent can save you a ton of time, hassle and expense. A buyers agent will help you find listings and tour houses with you. Remember that real estate agents may be more knowledgeable than you about the neighborhood and surrounding communities. They can also give you access to more listings including those For Sale by Owner, or FSBO. A buyers agent can prevent you from overpaying on a property and help you decide on the right offer. In my opinion the most important benefit of a buyers agent is that they are trained to negotiate the best price and sale conditions for you and not the propertys seller. Your buyers agent can serve as a buffer between you and a pushy sellers agent or the seller themselves. This alone can save you thousands of dollars over the time that you own your property. Furthermore, the buyers agent can put you in touch with mortgage lenders and home inspectors, and assist with other steps in the home buying process. Most buyers feel that they will have to pay a buyers agent to represent them. As the homebuyer, you may not have to pay this, since the buyers agent fee is usually paid by the seller (and taken out of the sellers agents commission). Since that is true, there is no reason not to get the professional advice that will help you avoid some of the pitfalls in the purchase of your new home or investment property. If you have a need for a buyers agent to represent you, please dont hesitate to contact one of our trusted professionals!