Housing
This section of the BDN aims to help readers understand Maine’s housing crisis, the volatile real estate market and the public policy behind them. Read more Housing coverage here.
Home ownership has become increasingly expensive since the pandemic, and housing prices are still rising in Maine, but people are still buying and selling properties.
From May 1 to July 31, nearly 4,300 housing units in Maine changed hands, the Maine Association of Realtors reported earlier this month. That marks a more than six percent increase from the same time period last year, when slightly fewer than 4,000 homes sold across Maine.
We asked a few Maine real estate agents for a list of five things every prospective buyer should have before they start looking for their future home, whether they’re a first-time buyer or a seasoned homeowner.
Here’s what they said.
Mortgage pre-approval, down payment and closing costs
Sitting down with a lender who can evaluate a buyer’s credit score and debt-to-income ratio allows future homeowners to know what they can afford before they start shopping for a home, said Sam Prindle, a Lisbon-based broker for Tim Dunham Realty.
Getting pre-approved for a mortgage also tells shoppers what price range they should stay within, strengthens offers and ensures they’re ready to move quickly when the right property comes along, said John Eccles, CEO of Dragonfly Properties in Portland. This is especially necessary when home prices in Maine have continued to rise in recent years.
Financial advisers and real estate agents generally recommend a buyer put a down payment of at least 20 percent on a home. This means someone would pay $50,000 up front for a home that costs $250,000, or $80,000 for a $400,000 house.
Prindle recommended buyers hold aside at least $2,500 in discretionary funds to cover additional expenses that come during the closing — the final step in the real estate transaction process — such as inspection costs, appraisal fees, and homeowners insurance.
A home inspection
Many buyers chose to waive a home inspection during the pandemic when houses in Maine were difficult to come by and stayed on the market for only a few days before selling.
Now that the real estate market in Maine has quieted a bit, Prindle recommended all buyers have the property they’re purchasing inspected. While an inspection adds an extra step before a buyer can move in, it gives the new owner a clear idea of what condition a home is in and what might need to be replaced or repaired soon.
However, Prindle said all buyers should be aware that the inspection alone can cost between $500 and $1,500, so some money needs to be set aside to cover that fee.
A clear idea of what’s important
Taking time to form a reasonable list of “must-haves” and “nice-to-haves” will help a buyer and real estate agents find available homes that fit a family’s needs and lifestyle, Eccles said.
If a buyer wants to be in a certain town, school district or region, Prindle said it’s best to be patient and wait to buy in the area they want. Otherwise, there’s a good chance they will be looking to sell in a few years and move to where they wanted to live in the first place, he said.
Some DIY skills
When someone buys a home for the first time after renting for years, they need to remember that they’re responsible for maintaining their property, from raking their own leaves to shoveling the driveway.
“You can’t call the maintenance person anymore to come address something,” Prindle said.
Knowing how to address minor issues, like patching drywall or fixing a leaky faucet, are skills every homeowner should have, Prindle said.
While some major issues require help from a professional, Prindle said knowing how to monitor essential systems and identify problems, such as ensuring the home’s heating system is working in the middle of winter, will save the owner time and money in the long run.
Knowledge of potential flood risk
When looking to purchase property along Maine’s expansive coast or near tidal bodies of water, climate experts recommend buyers check to see whether the home sits in a Special Flood Hazard Area, which the Federal Emergency Management Agency maps.
This measure is becoming increasingly important as sea level rise is expected to accelerate, which will lead to more frequent and severe flooding in coastal areas during high tides and storms, according to the National Oceanic and Atmospheric Administration.
Even if a person’s new home isn’t at risk of water damage, they should check and see if buildings that house essential services, such as wastewater treatment plants, hospitals or public safety departments, could be shut down by flooding, as that would still directly harm residents.
