What Should I Know Before Buying My First House?

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Ready to make 2019 the year you buy your first place?

Buying your first property can be a liberating, exciting, albeit exhaustive experience. Are you ready to jump in?  I work with many first-time home buyers as they plan to purchase a home in the Portland area and love being a part of the process. Here’s what you need to know:

1.    Know your financial snapshot if you need a loan: 

a.     Credit Score: Know where you land as your score impacts your financing options and interest rate.  When you get prequalified the lender will formally pull your credit.

b.    Debts/Budget: Make a list of your credit cards, student loans, car payments and other debts and expenses so that you know what you can afford and are ready to complete a loan application.

c.    Down payment: Conventional loans require at least 20% down but there are other options requiring less that range from 3%-10% down, and even loans that are 100% financing if you qualify. The less you put down, the higher your monthly mortgage payment so saving up has its advantages.

d.    Monthly payment: It’s not uncommon for people to qualify for more than they prefer to spend, so knowing your comfortable budget BEFORE you speak to a lender can help you stay level-headed. If you currently pay rent, don’t forget that utilities are not included in your mortgage payment. 

e.    Extra expenses: When you buy a property there are out-of-pocket buyer expenses before closing that add up quickly for inspections, appraisals and fuel reimbursement. Plan for a minimum of $1,500 for inspections and speak to your agent or lender about closing costs. 

2.    Get representation:  Find someone you trust to represent you. Why not simply reach out to the listing agent for a showing? It seems like a harmless thing to do but here is a breakdown of reasons why having a dedicated buyer broker is beneficial:

a.    A listing broker represents the seller only. They have a legal and ethical obligation to represent their seller client and to sell the property for the best price and terms possible for the seller. A buyer broker’s main objective is to represent the best interest of their buyer clients so that they can make an informed purchase and negotiate the best price for the property based on the current market. Unless the list agent also signs a buyer agreement with you, they are looking out only for the seller’s best interests.

b.    A buyer broker will protect your confidential information. If you disclose confidential details to the listing broker, such as your pre-qualification amount, motivation for moving or other financial information, it’s likely it will be shared with the seller since it is in the best interest of their seller client to know. There are times during negotiations that you will not want the seller to be aware of certain details.  

c.    Buyer representation costs you nothing out of pocket. Industry standard is for the buyer broker’s commission to be included in the purchase price of the property and paid at closing. Only in rare instances is this not the case and if not it is known at the time of the showing. You are not required to have representation, but you are paying for it in the purchase price regardless of whether you have buyer representation or not. The seller, if represented, has already signed an agreement with their broker for the total commission, normally 4-6% of the purchase price, and a portion is paid to the buyer broker. There is no financial loss in having someone in your corner helping you to navigate through the process.

d.    A buyer broker will share their knowledge of local inspectors, contractors, plumbers, public and private water/sewer inspection companies and other professionals that will be invaluable to you when you need to conduct inspections, get quotes or obtain test results within a short due diligence time period of 10-12 business days.

e.    A buyer broker will dig deep for you, provide you with comparable properties and market information, ask questions you may not know to ask, visit the town hall to review public records for you when you go under contract, help you to discover defects of the home that could impact its value, negotiate on your behalf and listen to you when you need to vent. 

3.    Contact a lender: Before writing an offer it’s wise to be prequalified for a loan. The current market is fast-paced and there can be multiple offers on new listings, so you’ll want to be prepared to put your most competitive foot forward. Many sellers will not accept an offer without a prequalification or preapproval letter. I suggest to my buyer clients that they find a knowledgeable local lender since they will know the inventory and understand local market trends, not to mention knowing inspectors, title companies and others to help ensure a smooth closing. Need a few referrals? I have you covered.

4. Timing: A real estate transaction typically takes about 45 days to close, start to finish. Your first mortgage payment is normally due at least 30 days beyond that. Learning as much as you can about the process before you go under contract on a home will help to keep your stress levels in check!

If you’re comfortable with the above information, you may be ready to start looking at properties! A good real estate broker will set you up with an online search for new listings and steer you in the right direction from the start. Lean on the professionals you’ve hired to help you, don’t be afraid to ask questions and CELEBRATE when you get your keys to the perfect place! 

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Favorite Portland Shops

The leaves have fallen, November is well under way and the season for gift shopping seems to have suddenly descended upon us. Recently, I connected with native Mainer and Portland resident Luke Thomas over coffee and we chatted about Portland, the town’s appeal to potential new residents and places we’d recommend to people getting to know the area. I compiled a list of a few favorite local shops for his blog, a super resource for those thinking of moving to Maine, and you can check out the post HERE. Enjoy!

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Neighborhood Gems: Nason's Corner

I had the joy of sitting with Elise Richer, owner of Tin Pan Bakery in the Nason's Corner neighborhood, and chatting about her bright, cheery bakery that opened in late 2016. Nason's Corner is a sleepy outer Portland area bordered by the Fore River Sanctuary, Evergreen Cemetery and Westbrook. She makes what I would argue is the best chocolate chip cookie in greater Portland (and there are some truly fantastic contenders). Just before we began our meeting a gentleman entered the bakery (around 8:30am) and proclaimed "I hear you have the best chocolate chip cookies in town! How many do you have? I'll take them all".

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Q: What brought you to Nason's Corner for your business?
A: I found just the right space. I have a great landlord who I can really work with and the neighbors in this little strip are really great. And I love being near the schools!

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Q: What inspired you to do what you do?
A: I liked and believed in my prior work but hated being in the office all day. I started working at a cake store part-time and the guy there had been a government lawyer. We experienced the same thing: when you handed someone a cake, their whole face lights up. I decided that this was what I wanted to pursue and moved back up to New England.

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Q: Tell me about your cookbook Always in Season (2013).
A: There are a few baking recipes in there but it was mostly focused on vegetables. I have much more bakery training and my interest was always with this. We do make roasted hand pies, and I do miss the seasonal aspect of vegetables, but people really do love their cookies.

Q: What is your "stranded on a desert island" baked good?
A: Chocolate chip cookies! I'm a chocolate person.

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Q: What piece of advice would you give to a small business owner looking to start in the Portland area?
A: Be flexible with your plan. I worked with the USM Development Center who said you're going to work hard on your initial business plan and then throw it away! You've got to listen (to your clientele).

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Q: Is there a secret to your chocolate chip cookies that you'd share?:
A: All recipes are pretty basic. Melt the butter, chill your dough and use REALLY good chocolate.
*NOTE* a customer bought them all before I could take a photograph!

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Q: What do you love most about this neighborhood?
A: People are so nice here and very supportive!

Thank you so much, Elise. Your bakery is absolutely charming and your baked goods are delicious!

Neighborhood Gems: East End

Neighborhood Gems: Portland's East End

Birch Hinks, owner of Flying Fox Juice Bar, hit all of the right notes with her fresh-faced juice and smoothie bar at 98 Washington Ave. Birch herself is warm and inviting and her shop smells like walking through a field of fresh greens on a summer day. No matter the weather, Birch's place is never dreary and my go-to smoothie has acted as a breakfast stand-in on many a hectic morning.

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Q: What inspired you to open a juice bar?

A: I worked in the social work field and always had a love for working with people and trying to contribute to their lives for health and happiness. I've always been juicing at home and it feels so great. It's an accessible way to get healthy and get vegetables into your diet. There's a niche here - there are a few other juice/smoothie shops but I think each neighborhood can sustain them especially since they are all so different.

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Q: What inspired you to open a juice bar?

A: I worked in the social work field and always had a love for working with people and trying to contribute to their lives for health and happiness. I've always been juicing at home and it feels so great. It's an accessible way to get healthy and get vegetables into your diet. There's a niche here - there are a few other juice/smoothie shops but I think each neighborhood can sustain them especially since they are all so different.

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Q: How does the juice/smoothie scene compare to Colorado where you lived before opening Flying Fox?

A: I think the health movement there is a bit ahead of Maine but we are quickly catching up! There are tons of cute little juice shops there and the importance of whole foods and making them accessible is evident. I think Maine is making the turn and there are so many small farms here to be a perfect pairing for new small businesses opening up.

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Q: What is the most unusual ingredient you've put into a juice or smoothie?

A: Kelp! There's a company in Maine selling locally harvested seaweed and it comes in awesome frozen cubes made specifically for smoothies. They are high in iron and trace minerals and you don't taste it at all. We have them available here and in the summer have a strawberry, rhubarb and seaweed smoothie. It's so good!

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Q: What's your most requested juice & smoothie?

A: Juice: Green Fox- seasonal greens (which could be dandelion greens, chard, beet greens or even lemon balm), celery, cucumber, parsley, lemon, ginger & apple

Smoothie: Banana/cacao/cold brew coffee or Blueberry/spinach/almond

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Q: You're approaching your 2nd anniversary here on Washington Ave- what are some of the changes you've seen in the neighborhood since opening?

A: There's been a lot! Having A&C Grocery and the Portland Gear Hub as neighbors has been awesome for the neighborhood. Maine Craft Distilling, The ShopForage Market will be opening, as well as the cluster of amazing restaurants that have opened up have brought a fun vibrancy to Washington Ave. Many of the newer businesses are around the same age and we're all friends and support each other. Last year was our first Washington Ave. block party!

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Q: What do you love most about the East End?

A: The Eastern Prom. The views are wonderful. The people in this neighborhood are amazing. They really care about their community and everyone is really jazzed about living here.

Thank you so much Birch! Your juice bar is a treasure.