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Home Buying and Selling Strategies

These strategies very valuable and can save you thousands of dollars. We invite you to print off this information for you own personal use, but we ask that you please do not copy or use this information for business use or on other websites, (although business websites are free to link to this page). In addition, although we feel that these strategies can be very helpful, every deal is unique and these strategies may not work in every situation. We ask you to use your judgment and common sense when applying these or any other home buying or selling strategies. Thank you.

Buying Strategies:

Get Pre-Qualified - Before you even begin looking for a home, it is very important to know what price of home you can afford. This is done quite easily by getting pre-qualified by a broker or lender. Being pre-qualified does a few things in your favor.

- It lets you know exactly how much you can afford.
- It greatly improves your chances of having a buyer accept your offer.
- It simplifies the loan process after your offer has been accepted.
- It gives you confidence and peace of mind when looking for a home.

If you would like to get a pre-qualified and receive a pre-qualification letter stating your pre-qualified loan amount, please call or email your personal Loan Specialist today and he/she would be happy to help you! If you're not ready to get pre-qualified, we have an informative mortgage calculator than can help you get a rough idea of what you can afford.

Preparing your offer - Once you have determined the price range of the home that you can afford, and have found a home that you want to make an offer on in that price range, there are two things you absolutely must do before making an offer.

1) Always make sure that your real estate agent gives you a list of comparable homes in the neighborhood that are for sale and/or have recently sold (this is called a comp list). Once you have the comp list, separate all of the recently sold homes, and then make an average of the sold home prices. This will tell you if the sellers asking price is above or below the average selling price in your neighborhood, which is vital when deciding what to offer.

2) Also on your comp list of recently sold homes, find the number of days that each of the sold homes were on the market before they sold, and make another average. This average gives you insight as to how long the sellers home has been on the market compared to the neighborhood average, and how motivated the sellers are. Once you have these numbers, you are ready to make an informed offer.

Making your offer - Statistically the more offers you make the more likely the seller is to accept one of them. In addition, most peoples minds are preprogrammed to a "yes or no" response when approached with an option. Based on these two points, the following offer strategy was developed and has had a high success rate.

We suggest that you always make at least two simultaneous offers. We recommend making a lower offer with few or no contingencies, and a higher offer with a number of contingencies, such as the seller agrees to include the ride on lawn mower, include appliances, paint the house, replace the roof, carpet, etc. Basically anything that you can imagine can be added to an offer as a contingency. The strategy involved here is two-fold. First, by sending two simultaneous offers, you utilize most peoples "yes or no" programming to make them choose between one of the two offers instead of deciding yes or no on a single offer. Second, by giving the buyer a list of contingencies, it inadvertently lowers the sellers perception of the value of his/her home, which means that he/she will be more likely to accept a lower price.

Three things you should always have in your offer - No matter what type of offer you are making, you should always use the following three statements in your offer. These three statements allow you to protect yourself, back out of any offer, or assign an offer to anyone at any time.

1) "and/or assigns" - You should always write this phrase after your name on an offer (ex. John Doe and/or assigns). Doing this allows you to assign your offer to anyone at any time before that offer expires. This can be very useful if you find someone that wants to buy the home from you at a higher price. Bottom line, using and/or assigns keeps your options open.

2) "This offer is subject to partners approval" - This is your escape clause out of any offer. By having this clause in your offer you can legally cancel it at any time. Who is your partner? It can be anyone, including your dog - it really doesn't matter.

3) "Seller agrees to have the home inspected on or before (date), with offer subject to buyers approval of Home Inspection analysis" - Home inspections are something that many buyers pay for, because it is relatively inexpensive; However, you can request that the sellers pay for it by simply adding something like the statement above to your offer. By having this clause in your offer, you protect yourself in case there's something wrong with the house that you weren't able to find on your own. If the inspector does happen to find something wrong, you have the option to walk away, have the seller fix it at their expense, or have them lower their price.

Applying for your Mortgage - Once you have an accepted offer, you need to secure financing. We would like to invite you to fill out our 1 minute Free Rate Quote or call your personal Loan Specialist today. Your personal Loan Specialist can help you find the right mortgage program for your needs and can answer any questions that you may have, with no pressure or obligation. Call, Email, or Apply today!

Avoiding PMI - When you purchase a home and your LTV (loan to value ratio) is more than 80%, you will be required to pay Private Mortgage Insurance (PMI). This is a monthly fee paid to protect the lenders interest in the property in the event you default on your loan. In many cases this is a extra fee that isn't necessary if you set up your loan correctly, and can be eliminated by having your 1st mortgage cover 80% of your loan, and then having a HELOC set up as a second mortgage covering the remainder of your loan (this can usually be done by your personal Loan Specialist).

This simple change in your loan setup can often save you thousands of dollars over the life of your loan. Although sometimes, depending on the type of mortgage, it can be cheaper to pay the PMI if a particular mortgage program offers a lower interest rate. Ask your personal Loan Specialist about your options.

Selling Strategies

Realtor vs. For Sale By Owner (FSBO) - There are pros and cons of having a realtor and of selling your home on your own. In most cases people sign up with realtors to sell their homes, however there are strategies that can be used when selling FSBO that can greatly improve your response and speed up the sale. Below are some strategies for selling your home with a Realtor and for selling your home on your own.

Realtor Strategies - When signing with a Realtor, you are basically paying him/her a portion of the sale to do the sales work for you, so other than keeping your home clean and appealing, there's not much for you to do once the Realtor agreement is signed. Therefore, it is crucial that you find the best Realtor for the job. This is pretty easy to do by simply asking them the following 9 questions. (Remember, don't settle for a mediocre agent or the first agent that comes along. If they don't answer these questions to your satisfaction, then don't sign!)

1) Can I cancel the listing at anytime if I'm not happy?
2) Will my home be placed on your web site? If so, what is your web site address?
3) How do you plan on marketing my home? Is this listed in the contract?
4) Will you provide us with an activity report of the buyer's and agent's comments?
5) What is your average sales time vs. the MLS (Multiple Listing Service)?
6) Do you have any professional designations?
7) Do you have a list of references that I can call?
8) If I find a buyer can I sell it myself?
9) Why should I list with you rather than any other agent that is calling?

For Sale By Owner Strategies - FSBO strategies are based more on ingenuity and creativity than Realtor strategies. Realtors usually have the MLS and a large network to draw from, where FSBO networks are more limited. However, thanks to the Internet, FSBO's have many more options than in the past. Below are some strategies for people that want to sell their homes on their own. Remember, these are only a handful of strategies; feel free to try new things and modify these strategies to fit your situation.

Get $10,000 back at closing - What you want to do is to catch potential buyers attention. Having a sign that says Get $10,000 back vs. a regular boring For Sale By Owner sign, makes a huge difference. Do you really have to pay the $10,000? Yes; However, you will also be able to charge a higher price (typically $10,000 higher) for your home, which means you will get the amount you wanted out of the house and the buyer will get money back at closing. You simply write the buyer a check for $10,000 after you get your check from the title company. This is a win-win and is quite effective. (Note: $10,000 was used as an example. We suggest you use whatever amount you feel comfortable using.)

Lease Option - This is a great strategy if your house is vacant, isn't selling through conventional methods, or if you don't have a lot of equity in the home. Basically, with a lease option, you lease your home to someone (you essentially become the bank) for a specified period of time, (usually for 1-3 years), at which time the buyers are able to purchase the home through a conventional lender. This approach has several benefits for both the seller and the buyer.

Seller Lease Option Benefits:

High Sales Price: Even if average home prices are low, you will attract more buyers who are willing to pay a premium because of the terms and value you are offering.

Higher than Average Rent: Since you are flexible on your terms and are offering value, you can demand a higher than usual rent.

Positive Cash Flow: Since your rent is higher than your mortgage payment, you will generate a positive cash flow, which instantly turns your home into an asset and increases your personal buying power.

Non-refundable Option Deposit: When a buyer signs your lease option, you receive an option deposit that is yours to keep if they default on the option, or don't make their payments. (This deposit can be as much as 2-3% of the homes value.)

No Realtor Commissions: Since you are selling your home yourself, you save paying a 6-10% Realtor commission.

Lower Advertising Costs: Lease option sellers typically sell their homes more quickly than regular FSBO's, which saves on advertising.

Attraction of High Quality Buyers: Because your buyer has an invested interest in the home, he/she tends to take better care of it.

Tax Shelter: Your name remains on the deed until the option is exercised, which means that you retain all of the tax benefits until it's sold.

No Maintenance, No Landlording: Buyers who have a vested interest and believe they are a homeowner typically have a "pride of ownership" that encourages them to pay on time, perform maintenance, and make improvements to your home. Additionally, you can delegate maintenance to the buyer in your lease option agreement.

Larger Market of Buyers: You are making your home more affordable to a larger market of buyers.

Shorter Vacancies: You will typically receive a larger number of calls when you advertise your home as a lease option. The typical turnover time is days or weeks rather than months or years.

Peace of Mind: It is safer than conventional rentals because of the quality of the buyers and their vested interest in your home. It also means that someone is living on-site who will watch and guard your home against vandalism, fire, etc.

Buyer Lease Option Benefits:

Faster Equity Growth: Equity can accumulate exponentially faster than with conventional financing because each month that a buyer pays rent, a portion of that payment will be credited towards their down payment or off of the sales price.

Option Deposit is Credited Towards the Purchase of the Home: When a buyer signs a lease option, he/she must pay the buyer an option deposit. This money is the buyers vested interest in the home and will be fully credited (100%) to either the buyers down payment or off the sales price.

Minimum Cash Out of Pocket: In a conventional purchase, the buyer must pay closing costs, prepaids, and a down payment. With a lease option, the buyer only pays the first month's rent and an option deposit (typically 2-3%) which saves the buyer between 25% and 85%.

Frequently No Down Payment at Closing: Since both a portion of each monthly payment and the option deposit are credited toward the buyers closing costs (or sales price), there will frequently be very little or nothing left to come up with for a down payment at the final closing on the property.

Credit Problems are Okay: Qualification restrictions are not as strict as conventional financing. You will be able to approve buyers at your sole discretion.

Time: Before buyers actually purchase the home, they will have time to repair their credit, find the best financing available, investigate the home and research the neighborhood. (By making their payments for at least one year on time, a lender can use that to help a buyer qualify for a loan if they have had payment issues in the past.)

Helping your Buyer Apply for a Mortgage - Once your buyer has satisfied the terms of your Lease Option, or if you have secured a buyer through your FSBO efforts, we invite you to invite your buyer to fill out our 1 minute Free Rate Quote or call your personal Loan Specialist today and he/she can contact your buyer for you. Your personal Loan Specialist can help you find the right mortgage program for your buyers needs and can answer any questions that he or she may have, with no pressure or obligation. Just Call, Email, or Apply today!

If you have any questions about our policies regarding the information contained on this page, please refer to our terms and conditions.


Elizabeth Stevenson
Loan Specialist

Hours: 10am-6pm Mon.-Fri. MST
Phone: (877) 511-8811
Fax: (866) 897-2452

Valuable Strategies
If you are buying or selling a home, I urge you to thoroughly read and study these Home Buying and Selling Strategies.

This page is full of innovative strategies, straight from Real Estate professionals and investors, that can truly save you thousands of dollars. These strategies are our way of saying "Thank You" for visiting our site today. I would also like to personally invite you to apply for a free rate quote. As your personal Loan Specialist I'm ready to help you with your lending needs and any questions that you may have.