Maine Real Estate Blog

It probably will, according to research by Spicerhaar, an independent estate agents network.

The managing director of Spicerhaar found that before a general election, home-buyers have a lot of anxiety about election outcomes and the possibility of looming tax increases that dig into their budgets. However, historically there has been a strong trend in improved confidence post-election going back 50-years regardless of the result of the election.

Spicerhaart’s research  looked at home prices and the number of property transaction prior to elections & post-elections. They found that in the run up to the 1997 election, the percentage increase in property value dipped from 2.4% to 1.3%. However after the election, house prices recovered and increased by 1.6%

Prior to the that same election year property transactions fell  but then increased by 8% after the election. 

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If you think your home needs a few updates before putting it on the market or you just want to make sure your improvements are a good investment, consider the following advise on upgrades.

Upgrades that Add Value

Kitchens:Today people are looking for larger kitchens with new appliances, quality counter-tops, and an open feel. A kitchen update is a great investment, just be sure to stick to the basics. Focus on new cabinets, sink, counter-tops, and flooring. Also add updated, quality appliances. Keep in mind that custom tile work and built in cappuccino makers may be a great luxury  but when you sell it won’t make much difference to the price.

Bathrooms:Updating a bathroom is another great idea. Buyers are often turned off by dated bathrooms. Freshen yours up with a new tub & shower, new vanity, and new flooring. Adding a second bathroom to your home can make a huge difference as there is nothing more essential to a family’s comfort.

Master Bedrooms: Master bedrooms have become a very sought after feature. If yours is ho-hum, try enlarging it, adding a bath, or a walk-in closet.

Decks & Patios: Outdoor living spaces can be a relatively inexpensive way to improve your home. Decks & Patios that are large enough for the family and entertaining are a big plus.

Renovating a Basement or Bonus Room: If you have an extra room above the garage or a large basement serving as storage space only, consider turning it into additional living space. If done properly it will be an excellent improvement. Just make sure you invest a reasonable amount of money into the project so that it doesn’t appear to be just an old basement posing as a family room.

Curb Appeal- A little updating on the exterior of your home can greatly enhance it’s appeal . Fresh exterior paint, a green manicured lawn, and nice landscaping will draw a buyer to your home. The outside of the home is the first thing a buyer will see when they drive by or see your ad. Keep in mind that elaborate and expensive landscaping will generally not add value.

Home Improvements that may not add Value

Custom Design-You may have always dreamed of a wine cellar, or a built in 300 ft aquarium, but a future home buyer may not be interested. Try to think of improvements that are universally appealing and useful.

Fancy Technology-While having a home movie theatre, or hi-fi stereo system running through the entire house, may be very enjoyable, these items tend to become out-dated very quickly.

Swimming Pools- Swimming pools rarely add value to a home and in some cases they can actually decrease the value of your home. This is because home buyers only see the maintenance cost and liability of owning them.

What is most important to consider when deciding on what home improvements to make is the neighborhood in which you live. What is standard for where you live? You may live in a very high end community where everyone has a pool and custom work galore. In these cases its OK to splurge. However, if you’re in an average home try to stick to the basics. If you’ve gone over board in a neighborhood of lesser quality homes you will not get a return on your investment.

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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!

Need to sell your home quickly?? Want to make sure you get the most money you can for your home? Follow these tips from Barbara Corcoran of the Today Show to sell quickly & get the highest sticker price in a slowing housing market.

5 Mistakes Homeowners Make

1) Making Small Price Reductions Again & Again

The longer a home is on the market the more of a stigma it will have. Dropping the price  frequently by small amounts makes the offer appear even weaker. A home that’s been on the market for a long time with many price reductions will give a buyer the impression that a lot of people have seen and then rejected it. Therefore why bother going to look at it?

The best thing to do in this situation is to slash the price. Find out what similar properties on the market are going for and price yours below theirs. The most enticing homes on the market are the newest and the cheapest. If you can be both your house will sell in no time.

2) Hiring The Wrong Broker:You want a broker who is enthusiastic and professional. In real estate the top selling agents (about 10%) do 90% of the all the business. Make sure your broker  keeps in touch with you and is easily accessible.

3) Waiting It Out: If you decide to wait, you are joining the thousands of other homeowners who have also decided to wait. When a few decide it’s time to take the plunge, you are already too late. If you need/want to sell now, then sell now. There will never be a better time.

4) Showing Your House Before You Get Rid Of The Clutter:  Just as you wouldn’t try to sell your car without cleaning it out first, you shouldn’t sell your house without de-cluttering. A buyer doesn’t want to see your house, they want to see their future house! Find a temporary place for your personal items and let people get a real look at your home.

5) Not Taking The First Bid:Often times when a buyer gets an early bid on their home they get excited & filled with confidence that another, better offer is just around the corner. Unfortunately this is not always the case and you can be left with no bids at all. The longer you home sits the more value it will loose, so work with those early bids!

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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%.