Buying Maine Real Estate
Second Homes - Strategy and Considerations
On a national basis home sales declined 4.1 percent in 2006 from
2005. But, vacation-home sales rose 4.7 percent in 2006 to a record 1.07
million sales, according to the NAR (National Association Of
Realtors®). The increased interest in buying vacation homes for personal
use rather than rental is expected to continue throughout this decade.
The annual Investment and Vacation Home Buyers Survey from NAR
found that vacation-home buyers intend to hold on to their property for a
median of 10 years. Thirty-eight percent of respondents plan to keep
their property for 11 years or more.
With a long-term horizon in mind, it's important to make sure
that the home you buy lives up to your expectations. To complicate
matters, residential real estate is an intensely localized business.
Many vacation-home buyers buy outside of their local area.
Understanding Local Market Conditions and Practices
The NAR survey revealed that the typical vacation-home buyer in
2006 bought a property that was a median of 215 miles from his or her
primary residence. Forty-two percent bought a vacation-home within 100
miles of their home; 32 percent of the properties were 500 miles or more
away.
Even vacation-home buyers who purchase within 100 miles of their
primary residence are likely to find that real estate custom and
practice might differ considerably from what they're used to. And market
conditions are so variable today that you can find different forces at
play even within one community.
Buying outside of your local area requires diligent pre-purchase
investigations to make sure that you end up with a home that brings you
pleasure. Here are the sorts of things you should look in to:
Check out the condition of the local market. Is it a buyer's or a
seller's market? If the area is flooded with inventory, find out which
homes are selling and why. You usually can't go wrong if you buy the
type of home that is in high demand. It may be worthwhile to wait for
such a property to come along.
Are there any natural hazards to be aware of such as forest
fires, flooding or hurricanes? Can you get insurance for these hazards
to protect your investment?
If you're buying in a rural community and you've experienced only
urban living, you may need to familiarize yourself with such things as
septic systems and percolation tests.
With this in mind, you'll probably have the best success if you
choose a real estate agent from the local area to represent you in your
vacation-home purchase. Ask acquaintances who own in the area for
recommendations. Or, have your real estate agent at home find a
competent agent to work with.
Second Home Tax Status
After you decide on an agent, ask for a list of all the fees that
will be levied in connection with your out-of-area purchase. For
example, some communities have transfer taxes and others don't. Find out
how much your property taxes will be and how much they are likely to
increase over time.
Buyers who purchase a vacation home a long distance from home
should investigate what local resources are available for property
management. You may purchase in a planned-unit development that includes
onsite management. If not, can you hire someone to look after your
property when you're not there?
It's a good idea to take a few vacations in the area where you
think you want to buy - and at different times of year - before you
actually purchase. You may find after spending more time there that you
really don't want to own a property that you may only visit
infrequently.
In the end it might make more sense to continue renting if you plan to spend only a week or so a year there. | Seriously Local
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