Maine Real Estate Blog

If you are selling or buying a home and a home inspection reveals it to be positive for Radon, fear not. Below are answers to common Radon questions.

What is Radon? Radon is a radioactive gas that is found in homes across the United States. In fact, 1 in 3 homes in Maine will likely have an elevated radon Level. Radon comes from the natural breakdown of uranium in soil, rock and water and it gets into the air we breathe. It moves up through the ground to the air above and into your home through cracks and other holes in the foundation. It can also show up in your well water. Any home, no matter the age, and regardless of how well sealed it may be -can test high for Radon.

What Risks are Associated with Radon? In 1998, a study was done on radon and lung cancer by the National Academy of Sciences. It found that approx. 12% of lung cancer deaths in the United States are linked to Radon. Radon is the second leading cause of death due to lung cancer in the Unites States.

How do I Test for Radon? Testing for Radon requires special equipment because you cannot see or smell radon. Its best to contact a registered Radon tester. Many home Inspectors can do this test for you. Maine law requires that the testing device be placed on the lowest livable level of the home. If you have a full basement that can finished as additional living space it should be placed there however if  you have a crawl space, the first floor should be tested. Test for Radon typically need to remain on site for 24-48 hours.  When testing a house, all windows and doors MUST remain closed.

What is Considered a High Radon Level? Radon test results are reported in picocuries per liter of air ( pCi/L) Maine recommends that your seek radon treatment if your home tests at 4 pCi/L or higher.

How do I Reduce the Level of Radon in my Home?  Lowering the Radon in your home will vary in cost depending upon how your home was built as well as other factors, however most homes can be fixed for approx $1,200 on average. The level on Radon in your home has no bearing on the cost of installing a mitigation system.   The most reliable, durable, and least expensive method for lowering Radon is to install a simple system using pipes and fans. This system is referred to as Sub-Slab Depressurization or Sub-Slab Suction. This system removes Radon gas from below the home before it can enter the home.

How do I Find Someone to Fix my Radon Problem? If you are living in Maine you can call 1-800-232-0842 or visit www.maineradiationcontrol.orgfor a list of registered Radon mitigators in your area.

What About Radon in My Water? If you home gets its water from a well, it is also a good idea to have your water tested for Radon. The Maine Bureau of Health recommends Radon concentrations in drinking water of 20,000 pCi/L or above to be reduced. Testing for Radon in your water is a different test then testing for Radon in the air and you must specifically ask your home inspector to do both tests.

I read an interesting article in  Realtor Magazine this month about  the new baby boom that the United States is currently experiencing and its potential effect on home sales. According to the article called “The New Baby Boom” by Robert Freedman, the US adds one person every 13 seconds. At the start of 2008 the country had almost 3 million more residents then it did at the start of 2007. The US birth rate is now the highest it’s been in more then 40 years. This is great news for the housing industry according to economists, because a new household formation is the first step toward home ownership. The population gains we are currently experiencing point to huge demand in the years to follow.

The article also cites immigrant households as having the highest home ownership rates of all demographic groups, that’s according to the Home-ownership Alliance. After an immigrant family has been in the country for 30 years, their rate of home ownership rises to just below 75 percent.  Economists believe that once consumer confidence returns to the housing market, sales will boom.

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It was a snowy month in January and along with the snow came fewer sales and lower sales prices statewide.  On average for the state, single-family real estate sales fell over 28% in January 2008 compared to January of 2007. High snow fall totals may have had some impact on this number.

The medium sales price statewide for single family homes dipped by approx. 2% to $185,000. While prices did decrease statewide some counties saw double-digit price gains like the Belgrade Lakes Region where many buyers have little need for financing.

Nationwide real estate sales were down by 22.4% this January when compared to last January and the medium sales price dipped 5.1% to $198,700.

In Cumberland County  the number of homes sold fell 25.63% in the rolling quarter between Nov. 1st 2007- January 31, 2008 compared to Nov 1st 2006-January 21, 2007. Prices fell by 3.39% during this same time period.

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The median sales price for a single-family home in Maine increased slightly in 2007 according to the Maine Real Estate Information System, inc. while reported sales decreased by just over 10 percent from 2006.

Statewide in Maine, the median sales price reached $194,000, up .77% overall for the year while in Decemeber only, prices statewide fell by 4.62% and sales were down 23.27%.

Nationally, single family home sales declined 21.6% and sales prices dipped 6.5% in the month of December. Naionally for all of 2007 sales fell 13% and prices decreased by 1.8%.

In Cumberland County, the number of units sold fell 7.29% for the year but prices were up by .40%.

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The fed cut rates again yesterday leaving many people wondering what this all means for them. Will Mortgage rates drop, will this ease troubles for those going into foreclosure? What about credit card rates? Is now a good time to refinance? Below is a breakdown of how the fed rate cut will actually affect you.

What is the Fed Funds Rate? The Fed Funds rate is the rate at which banks lend one another money each night, and it also helps determine all other interest rates. The banks use it to set the prime rate for lending money to their best customers, usually by adding 3 percent.

Fixed Mortgage Rates: Fixed mortgage rates are tied to long-term bond yields that move based on the outlook for the economy and inflation. Mortgage rates therefore are not directly affected by a rate cut but could be depending upon how the market interprets the rate cuts and their potential effect on the economy. The Fed rate cuts do affect short-term adjustable rate mortgages. If your facing a  reset on your ARM, you will likely be in a better position then you were a short while ago. If your looking to purchase a home, you might get a lower rate but qualifying for a loan has gotten a lot harder. Getting 100% financing or getting a loan based on stated income is highly unlikely.

 The Foreclosure Crisis: The Fed rate cuts won’t do much to ease the foreclosure crisis as most of the people facing foreclosures because they can’t make their monthly payments have no equity in their homes and no money to put down to refinance so their position is unlikely to be changed.

Credit Cards: The good news for those of you who have credit cards with rates tied to the prime rates; now is a great time to pay off you debt at a lower rate. You’ll have to read the fine print on your credit card but those with good credit are likely to have these kinds of cards. Rates will also be bit better on home equity loans & car loans which will help save you a little cash on big purchases.

Is it a Good Time to Refinance?Experts say it is, especially for borrowers with ARMs and good credit who don’t plan to move any time soon. Even before Tuesday’s Fed action, rates on 30-year mortgages had fallen to the lowest level since the summer of 2005. There’s no guarantee, though, that mortgage rates will keep falling as the Fed cuts short-term rates.They could even rise if the Fed is successful in stabilizing the economy and inflation fears accelerate.

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If you’re a first time home buyer you may be worried about what upkeep of a house really entails. Below is an easy check list to keep small problems from turning into big headaches down the road.

1. Change your furnace filters monthly: Clogged filters decrease furnace efficiency and can cause breakdowns of your system.

2. Drain your water heater at least once a year:  Sediment drains out along with the water from the tank. Removing sediment can prolong the heater’s useful life.

3. Clean the coils: If you have baseboard heating units that use hot water, clear dust from the coils inside the units to maximize heating efficiency. Clean dust whenever you see it accumulating. If you have a hot water boiler/furnace, you should also oil the pump inside the furnace twice a year. There should be three spots on the pump designated for oiling.

4. Check your circuits: Test the performance of the circuit breakers in your electrical circuit box twice a year by flipping them off and back on. If you have a circuit that keeps shutting off with normal daily electrical use, call an electrician. A faulty circuit breaker could indicate a short in the wiring inside your walls.

5. Watch out for drips:  Check under sinks periodically to look for leaks or water stains that might indicate leaks. Catching a small problem early can prevent water damage. Use a plunger to clean out sinks and tubs whenever water doesn’t drain normally.

6. Replace regularly:   Water heaters, furnaces, roofs, and other key components of your home should be replaced before they fail, based on their average useful lives.

Exterior Painting    every 5-10 years

Furnace                    every 15-50 years

Roof                           every 13-15 years

Water Heater           every 7-15 years

Deck Staining           every 4-7 years

7. Keep the wet out:  Water is a major enemy to your home. Check each season for signs of water damage to your home. Flashing, the metal pieces used to seal the areas between roofs and chimneys and around doors and windows, are especially vulnerable to damage by wind or age. Loose flashing can let water seep under a roof or inside walls, which in turn can cause mold.

8. Get to the bottom of things: Check your home’s foundation for cracks or gaps that could let in water or varmints. Also look at the ground around your house. As homes age, they often sink slightly below the surrounding ground. This settling lets water puddle against the foundation and possibly damage it, Doing major landscaping work also can cause changes to the ground’s pitch that let water flow toward the house.

9. Look up: Chimneys take a great deal of weather abuse. Visually inspect them each year for signs of loose mortar or loose or missing bricks. Have the insides of chimneys cleaned every two or three years. Also check your roof for loose shingles or dangling gutters.

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We would love you hear some of your real estate questions! Email them to us and we’ll post the answers on our blog!

The following information was provided by the Mortgage Office in Yarmouth Maine

Today your credit score is more important then ever for becoming qualified for a loan and getting a good rate.

Credit scores predicts the likelihood of a consumer paying off debt without being more than 90 days late at any time. Scores can range from a low of 350 to a high of 850, where higher is better. Unfortunately, one out of eight prospective home buyers may not qualify for the loan they want because their score falls below 620.

Excellent Score                        Greater than 760

Good Score                                 720-760

Average Score                            680-720

Reason for Concern                   620-680

Reason for Great Concern       Under 620

Credit score is a computerized calculation. Personal factors are not taken into consideration. It is merely a snapshot of today’s credit profile for any given borrower, and it can fluctuate dramatically.

Factors of Credit Scoring:

1) Payment History-35% Impact:

Paying debt on time and in full has the greatest positive impact on your score. Missing a high payment will have a more severe impact then missing a low payment, and delinquencies in the past two years carry more weight then older ones.

2) Outstanding Balances- 30% Impact

This factor calculates the ratio between outstanding balance and available credit limit on revolving debt (credit cards, home equity loans. )Ideally, keep the open balance at less than 40% of the credit limit on all accounts.

3) Credit History- 15% Impact

This portion indicates the length of time since a particular credit line was established. the longer the account has been open, the better.

4) Type of Credit-10% Impact

A mix of auto loans, credit cards and mortgages is more positive than a concentration of debt from credit cards only.

5) Inquiries-10% Impact

Each inquiry can cost from 2 to 25points on a credit score. However, 10 inquiries within a six-month period is the most that are counted- additional hits have no impact. If you runa  credit report on yourself from the on-line sources, it will have no affect on your score.

How Do Lenders View Your Score?

Lenders estimate your ability to pay back a loan based on your credit score. The risk factor they take on is built in to your interest rate, so a low credit score results in a higher interest rate. The underwriter who is making the decision on your loan is looking at scores from all three credit bureaus, and will use the middle score as a barometer.

Credit Remediation: If you would prefer to work with a credit repair service, call an mortgage broker who can refer you to a reputable agency.

Your best solution is to review your report and correct errors directly with the credit bureaus.

Do’s and Don’ts

When you apply for a mortgage, a credit report is run fro the underwriter. you should not do anything that will have an adverse affect on your credit score while your loan is in process.

-DON’T APPLY FOR NEW CREDIT OF ANY KIND , no new car, credit cards, store accounts, or anything!

-DON”T PAY OFF COLLECTIONS OR CHARGE-OFFS generally, paying off an old collection causes a drop in the credit score, as it makes the negative information current. Resolve these accounts after the closing.

-DON’T CLOSE CREDIT CARD ACCOUNTS- this will affect your ratio of debt to available credit, which will lower your score.

-DON’T MAX OUT OR OVER CHARGE EXISTING CREDIT CARDS- running up your credit cards is the fastest way to bring your score down, and it could drop up to 100 points quickly!

-DON’T CONSOLIDATE DEBT TO ONE OR TWO CARDS- once again, this will change your ratio of debt to available credit. It will also create red flag new accounts.

-DO STAY CURRENT ON EXISTING ACCOUNTS- late payments on your existing mortgage, car payment, or anything else can cost you dearly. One 30-day late payment can cost anywhere from 30-75 points on your credit score.

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The following information comes from  Maine Real Estate Information Systems, Inc.(MREIS), a subsidiary of the Maine Association or Realtos. MREIS is a statewide Multiple Listing Service with over 5,800 licensees imputting active and sold property listing data.

Median Sales prices for single-family existing homes in Maine edged upward in November while sales of those homes were down over 10 percent. According to MREIS, 891 homes sold during the month of November 2007, a decrease of 10.63 percent from November 2006.

Statewide, median sale prices rose 1.62 percent. Maine’s median existing single-family home price reached $188,000 last month, up from $185,000 last year. The median sales price indicates that half of the homes were sold for more and half sold for less.

The National Association of Realtors reported that across the country, single-family home sales decreased 19.9 percent in the past 12 months. The national median existing sales price dipped 3.7 percent to $208,700.

Regionally, sales in the Northeastern United States mirrored national statistics with a 19.4 percent drop in sales. NAR said prices are also down regionally: The median sales price in the Northeast decreased 3.2 percent to $258,300.

The winter season has ushered in positive sales for some resort areas. The Bethel/Sunday River market has seen steady sales throughout November. The early season snow and the recent sale of Sunday River Ski Resort have been positive influences on that market which consits primarily of second homes.

Here are the Home Sale Stats for Cumberland County:

Units sold from September 1-November 30 2006:   760 Units

Units sold from September 1-November 30 2007:   642 Units 

Thats a change of -15.54%

The Median Sales price for Cumberland County between September 1-November 30 2006 was $258,500                              

The Median Sales price for Cumberland County between September 1-November 30  in 2007 was $249,950

Thats a change of 3.31%.

Below is a summary of an article written by Lawrence Yun for Realtor Magazine. Yun is Chief Economist & Senior Vice President of Research for the National Association of Realtors.——————————————————————————-

-Turn on the TV this week and you’re likely to hear continued coverage on the decline in the housing market leading many to believe that the problem of loosing money on real estate investments in America is widespread. Not so, according to Lawrence Yun. He says that someone who purchased a property in Las Vegas five years ago would be ahead by $150,000 today, by $200,000 if he purchased in Miami, and approx. $54,000 on average in the US as a whole. According to Yun, the amount of Americans who are suffering  losses only amount to about 1- 2% of homeowners who purchased in a few specific markets that overheated during the boom.  Consumers who invest $10,000 as a down payment on a typically priced home will net  $110,000+ over the course of 10 years. Invest that same $10,000 in stocks and you’ll likely to return only $23,600. Purchasing real estate with the plan of holding on to it for a reasonable period of time continues to be a sound investment and is what creates the staggering difference in average net worth between home owners and renters.

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