Maine Subdivision Rules - Should You Develop Your land?
In Maine, there is a difference between a division of land and a subdivision of land. In most municipalities dividing your property into two separate lots requires little or no permitting. However, dividing a property into 3 separate lots within a 5-year period does require approval in most cases, and is the definition of “subdivision” in our state.
Increased Property Value
Why would you want to do a subdivision? Most property investors look at the subdivision process as a way to increase the per acre value of their property. At first the thought of a smaller lot being worth more does not make sense, but consider that by reducing the size of the acreage you bring the gross selling price lower and within the purchasing power of more people. More people competing for a property usually translates to more demand and a higher price.
Higher prices may or may not translate into more profits. Before jumping headfirst into a subdivision some research and planning should be undertaken. Market conditions should be the first consideration. Data such as recent comparable lot sales, how many sales have occurred, lot sizes of successful sales, what is the current supply of lots, absorption rates, and financing availability to name a few. Next what will be the costs of surveying, wetland delineation, engineering, road construction, soil testing and other requirements of permitting? After thorough analysis and due diligence a property owner can decide if the risk is worth the reward to subdivide.
Every organized town in Maine may have a slightly different subdivision ordinance. The unorganized territories in Maine have a uniform ordinance with little variation in requirements. Typically, a local planning board will review a proposed subdivision to see if it conforms with the ordinance. The process will consist of several meetings starting with a presentation of a preliminary sketch of the proposal. This is followed up with notifications to the public and nearby property owners of the proposed subdivision and the date of the public meeting to review it.
This next hearing consists of a more formal presentation of a preliminary survey plan of the layout of the proposed lots, roads, easements, slopes, soils etc. Public comment is permitted and heard by the board. After this meeting any changes required by the board need to be addressed and another hearing with a final plan will be scheduled. Assuming no other issues are outstanding, the board will sign the final plan that will be recorded in the county registry of deeds.
There are a number of exceptions to the rule to sell property without the process of subdivision. Gifts to relatives (see definition in statute) may be exempt if the donor has owned the property for at least 5 years and the consideration is less than ½ the current assessed value. Sales to abutting property owners may be exempt from subdivision rules. In unorganized territories, 3 lots can be created in a 5-year period as long as the 3rd lot is retained for forest management purposes. This is often referred to as the ‘2 in 5 Rule.’ There are other exceptions listed in the statute linked above.
This post is intended to encourage a thoughtful process in land investing and should not be viewed as an endorsement to subdivide your property. In many cases I would advise clients not to. The above descriptions are a simplification of the process, not a complete outline of all potential requirements of every planning board. You are well advised to consult with experienced professionals like real estate attorneys, surveyors, soil scientist, and land brokers before undertaking the subdivision process.
Has your land in Maine been on the market for 6 months, 12 months, 2 years or more? Few showings, no offers and you think that something must be wrong. Well something probably is. Here are the Top 5 Reasons we have identified that get in the way of selling your property.
The number one reason property does not sell is typically a pricing problem. Before putting your land on the market a thorough analysis of the potential uses of the land, recent sale data, competing properties for sale, location issues, property improvements and other factors should be considered in order to price the property competitively for the market. If this is not done correctly from the start the end result is longer marketing time and a below market selling price.
Number two on our list is marketing. Determining who the most probable buyer is and then how you reach those prospects is paramount to any good marketing plan.
Selling raw land or properties with a large component of land is not the same as selling a single family home on 1/2 an acre in town. Putting and ad in a local paper, a sign on the property, placing the property in MLS, Realtor.com, Zillo and Trulia can be effective for selling homes but miss the mark for properties with acreage. Take a peek at any of these mediums and you quickly see that they are designed to focus 99% of attention on single family homes. Land is hard to find here and generally not presented in an attractive manner with a low quality tax map or Google Earth screen shot as the opening photo.
How you physically get onto a property has a real effect on buyer interest and general appeal of the land. If your land fronts a busy road or highway and there is no driveway or access road onto the property prospective buyers may have a difficult time seeing the utility of the parcel. Does the land have a clear right of way if it is not on a public road? If not, what can you do to better define the access or right of way? Is your property on a private road that is in bad condition? If any of these situations describe your property, this could be one of the reasons your land is not selling.
Boundaries are unclear
Imagine yourself as a prospective buyer and meeting the owner or real estate agent to see a 50 acre parcel of land. Now imagine you ask them where the property lines are and they tell you "we think they are somewhere around here". Does that statement give you and warm and fuzzy feeling that would inspire you to write a deposit check? I doubt it. Get your property surveyed to add value and shorten the marketing time.
No Owner Terms
If you have not considered offering owner financing terms for the sale of your land, you should give it more thought. Inquiries on our land listings triple when advertised with owner financing terms. It simply opens the property up to a much larger buyer audience. Owner terms often bring a higher price for the property and most owners get interest rates that are attractive as an investment.
If any of these conditions apply to you, this may be the reason why you have not been successful in selling your property. Need more help? Call us today for a professional opinion.
When you are in the market to purchase land one important consideration is soil quality. Your soil considerations should be based on the intended use for the land. Do you want to grow crops, graze animals, manage timber, provide recreation opportunities or conserve wildlife, wetlands and other sensitive features? The higher the soil quality the better crops and trees will grow. These will be better drained sites for constructing homes and cabins as well.
The U.S. Natural Resource Conservation Service (NRCS) has provided a plethora of information online at Web Soil Survey. The online data is complex. Some soil knowledge or basic mapping skills are necessary to navigate this site. We, at United Country Lifestyle Properties of Maine, have made this process easier for our customers and clients through the use of mapping software that simplifies the NRCS data into an easy to understand soil report.
NRCS has identified more than 70,000 soil types in the United States. Maine has soil types such as Monarda, Dixmont, Howland, Thorndike, Bangor and many others. The types or series of soils will be abbreviated on maps and reports such as Mo for Monarda or Ba for Bangor. Soils are given compound names such as Bangor silt loam. The first part of the name, Bangor, refers to the soil type. The second part, in this case silt loam, refers to the structural texture of the soil. You can find a soil triangle like the one below online to help determine the texture. I’m not going to discuss the various simple to complex testing methods that can be done for soil texture, you can Google search this topic and find a number of articles and videos showing these methods. Here is a link to a simple jar method. https://hgic.clemson.edu/factsheet/soil-texture-analysis-the-jar-test/
Soil types are assigned classes from I to VIII based on their suitability for agriculture. They are also assigned subclasses based on their limitations of e,w,s, and c which stand for erosion, water, shallow or droughty and cold climate.
Capability Classes I – VIII with I being most desirable. Classes I-IV will support most types of cultivation and V-VII do not support cultivation but can accommodate forestry and grazing. Class VIII land does not support cultivation, grazing or timber production and includes cliff faces and other rock outcrops, beaches, river and creek beds.
Understanding Soil Code
Looking at a soil type map for the first time is Greek to most people. But with use of the NRCS Websoil Survey or a mapping platform such as Mapright, these codes will become easy to use. So, the next time you see BaC 3e, you can refer to the capability view and know that this is Bangor Silt Loam with 8-15% slopes and the limiting factor to its agriculture productivity is its propensity for erosion. It can be used for growing crops as long as a lot of conservation measures are used. It probably is better suited to grazing and would certainly grow trees very well.
While doing due diligence in the review of a specific property, don’t eliminate it just because it has class IV – VIII soils, they have value, just not to a farmer. Most of Maine has some limitation to its soils from rocks to slopes to bedrock and so on. Class I and II soils with no limitations are rare and expensive.
Like most online data, the US NRCS soil mapping has limitations and localized exceptions will be found on most every site. These reports should not be replaced with an on-ground inspection of individual properties. If soil conditions are critical to your intended use of the property, a soil professional should be consulted.
What a difference a year has made for Maine waterfront. Coming into the end of 2016 it appears that the waterfront land market is heading in the direction of a sellers market. The indicators are a 20% increase in the number of waterfront land sales in the past 12 months as compared to the 2015 numbers and an average market time reduced by nearly 50 days . Depending on the part of Maine you are in you are seeing prices, that were flat in the beginning of 2016 caused by an excess of inventory, now starting to creep up a little.
Factors in our markets contributing to the increase in sales are a combination of a number of things. Asking prices being lowered by sellers who have realized that the values of the mid 2000's are in many cases unobtainable, low interest rates offered by some of Maine's land lenders and owner financing increasing in popularity.
We are seeing new lakefront, riverfront and other waterfront parcels in both approved subdivisions or divisions of existing properties coming into the market. Strong interest from buyers both prior to and after the presidential elections leads me to believe that waterfront prices will continue to increase slightly in 2017 assuming that inventories continue to dwindle.
Is it time to sell your land? All market areas are different, give us a call and we can give you an idea what your property might be worth on the market today.
Maine has a long tradition of landowners allowing reasonable public access to private lands. As a Mainer I want to thank all of those land owners who allow this. I do not post my land as we also enjoy using lands of other landowners who also allow access for recreation on their lands.
If you wish to keep your land for your own use, Maine does protect the landowners rights to privacy. Title 17A Section 402 explains how the landowner must post their land with signs or paint to legally restrict access over their property. Signs or paint must be within 100 feet apart and be visible so that a potential intruder can see the restricted access. Signs must be specific as to the restriction ie. no trespassing, access by permission only, no hunting etc.
Painting is the easiest way to post your land, a vertical purple painted stripe 1 plus inch wide on trees 3-5 feet above the ground means access by permission only. These stripes need to be no more than 100 feet apart and need to be maintained so that they are conspicuous to any person who may approach your boundary lines.
A verbal warning to a trespasser is also a legal means of enforcing your property rights. If you confront a hunter on your land you have the right to inspect their hunting license to determine who they are, if they refuse they have violated Maine law. If convicted they can loose their hunting rights for a year and possibly forfeit their firearms to public auction.
If a hunter wounds a game animal which then enters your property the hunter does not have the right to enter your property to retrieve the animal. If you are concerned about the access please contact the local game warden and allow the hunter to retrieve the animal to prevent the waste of the game.
We are often asked by landowners that if they post their property to restrict access if they can still legally hunt their property. The answer is yes. The landowner does still need to purchase a Maine hunting license and abide by all applicable hunting rules and regulations. We are also asked about landowner legal responsibility for keeping their property safe for recreational users. The answer is no as long as you do not willfully or maliciously fail to guard or warn against a dangerous condition, use, structure, or activity.
We hope this helps Maine land owners manage the land they way in which they want to. To understand that if they wish to keep it for just themselves that is a right that they are entitled and protected. For those who leave their land open for public use this Mainer and many others say thank you and respect your property rights.
I've produced most of my homes electricity for several years now. Seven years ago I installed a 10 Kw Bergey wind turbine and three years ago I added an additional 3000 watt solar array with battery storage and inverters. At peak production with both devices I am producing 13,000 watts of power on a sunny and windy day. On a monthly basis I have seen as much as 1200 kilowatt hours of production from my turbine and an additional 360 kilowatt hours of power from my solar array. The average home uses 600 kilowatt hours of power on a monthly basis, so at times I am able to produce more power at my home than two average homes in the U.S. consume. This production ability came at a pretty steep upfront cost. I have around $60,000 in my turbine and about $20,000 in my solar array with its associated inverters, batteries and top of pole mount.
I have read in various places studies showing the costs for energy conservation compared to the costs of energy production. The number that I have seen is on the order of for every $1.00 spent in conservation, it would take about $8.00 spent to produce that amount of energy. So what does this have to do in real life when thinking about building an alternative energy system? Well quite simply the less energy you really need to produce to live comfortably, the smaller the investment you need to make to produce that energy.
A well thought out off-grid home is going to be well insulated as well as well positioned to take advantage of passive solar heating, natural lighting and have efficient electrical appliances and lighting. The lifestyle of the inhabitants of that home will be different as well. They will turn off lights when not in the room. If they watch television, they will turn it off when it is not being watched. Pretty common sense items you would think, but not in reality. It is amazing the people that I have had as guests in my home that leave the lights on, leave the television playing and just waste electricity. I guess they either believe since I produce my own, it is free to waste it. It just takes a second to turn off appliances not being used, and all that conservation adds up pretty fast when you figure it is an eight to one return.
The inhabitants of a well designed off-grid home will most likely heat with wood, cook with propane or natural gas, and use efficient LED lighting in the home. The electrical appliances will be energy star rated and they will decide what is truly important to them. The home will probably not have a dishwasher, although it could. It depends on what they consider necessary for their lifestyle. I have seen some pretty amazing properties that were built off-grid and produce all their own electricity. I have also seen some pretty modest homes with modest energy production investments with above average energy consumption as well. Utilizing a conservationists approach to living your life will yield large dividends in money saved and still living comfortably in an off-grid home. Decide what is important to you, what you could use less of, what you can get by without entirely and have an appropriately sized system installed for your home. A good friend of mine with hundreds of off-grid system installations under his belt has stated that he never tells anyone that it can't be done, what he says is "how large is your budget?" Eight to one adds up pretty fast.
The senate recently passed an amendment to limit the EPA and Army Corp of Engineers play to bring additional waters into their jurisdiction under the Clean Water Act. This was hotly contested last year by concerned parties from home owners to industry as overreaching the intention of the Clean Water Act.
The provision was introduced by Senator John Barrasso of Wyoming and co-sponsored by Roy Blunt of Mo.
For more information about the amendment see Senator Blunt's site linked HERE
This past week Peter McPhail and I attended the Realtor Land Institute National Business Conference in Tucson Arizona. We were among a contingent of United Country Real Estate ALC's and RLI members from Maine to California to attend the conference. The 3 day event featured national expert speakers on the economy, instructors on new real estate training and technologies plus networking opportunities with over 200 of the best land brokers in the country.
The conference opened with Lawrence Yun, The NAR's chief economist, KC Conway Senior VP of Sun Trust Bank and Dr. Mark Dotzour of Texas A&M. The three gave the group their predictions on what we should expect from the economy in 2015. Here are some of their predictions; o The U.S. GDP will underperform again this year staying below the historic norm of 3% growth, while Europe will remain around ZERO. o Interest rates will remain low but will increase slightly midyear. o Farmland prices are expected to fall with lower commodity prices o Foreign investment in US dollar assets will increase o Supply chain will switch from West Coast to the East Coasts more modern and efficient ports o Oil prices should remain low throughout this year, but gas predicted to hit $3 per gallon because of a lack of refining capacity to keep up with demand o None of the three are concerned with inflation with one predicting deflation for 2015 All three economists feel that the recovery is being slowed by the 2010 Dodd/Frank legislation that came in the wake of the banking meltdown of 2008. All agree that the legislation should be loosened to exempt smaller local banks from much of the restrictions intended to keep TOO BIG TO FAIL BANKS in check. Small banks simply can't afford the legal army needed to wade through this complex law. They have become more selective than they want to be in making loans because of fear of the new laws. These banks were not at the core of the financial crisis and most are doing well. Ask your state senators to get behind reforms to Dodd/ Frank which will encourage lending to home builders and new home buyers.
In 2006 and 2007 Maine experienced the hottest waterfront market in history. Ocean, lake, pond and river properties for sale were benefiting from the boom of real estate values in Massachusetts, New Hampshire, Connecticut and the rest of New England. Out of state buyers were flocking to Maine with cash from home equity loans on their primary residences.
In 2011 the waterfront market bottomed out based on the number of sold transactions. Since 2011 we have seen a slow but steady increase in the number of single family waterfront transactions per year. For example, in 2014 Penobscot County had seen an 80% increase in the number of sold transactions compared to 2011.
What are some of the causes for the increase in the number of Maine waterfront properties sold?
- Record high levels of available inventory. Buyers have had a great selection of properties to choose from.
- Prices are at the most affordable levels since the great recession started. Some locations are seeing properties selling for 25% less than the peak values of 2006-2007.
- Record low interest rates. Current 30 year fixed rates are under 4%.
- Record Stock Market Levels. Buyers are taking stock market gains and investing in Maine waterfront property.
- Pent up demand. Buyers are starting to see the changing tide in the Maine waterfront market and are getting off the fence to take advantage of these conditions.
Why buy now?
Buyer activity for the winter months of 2015 has been the strongest we've seen at United Country McPhail Realty since 2007.
New listings coming on the market for the first two months of 2015 are down 11% compared to 2014 and down 7% compared to 2013.
If you are a buyer that has been sitting on the fence watching Maine waterfront for sale, timing is everything. The balance of supply and demand is moving away from oversupply to a more balanced market. These conditions will help to provide an upward pressure on values, especially on those waterfront properties that are priced aggressively and have the popular features buyers are looking for.
If you are an owner looking to sell your waterfront property, it is more critical than ever to hire the right Realtor. What makes for the best waterfront realtor? The following are some of the criteria to consider:
- A real estate company with a strong online marketing program that focuses on lifestyle property types. A generic, cookie cutter, one size fits all marketing program will not work well.
- A company with a strong print advertising campaign designed to reach buyers of lifestyle properties. Another part of a strong foundation. Affluent buyers still like to read print.
- A brokerage that understands SEO and can help your property stand out from the crowd. It takes more than just a standard web site to be found first among the many.
- A real estate company with a large database of buyers that can be marketed to from day one.
- A real estate company that is part of an international network of lifestyle brokers.
- A real estate company with years of experience that understands the best marketing, pricing and negotiating strategies to best serve their client's needs.
- A real estate company that is continually staying on the cutting edge of new marketing ideas and technology.
For a free, no obligation consultation, give the United Country McPhail Realty team a call at 207-794-4338 to see the power of a custom lifestyle marketing program for your Maine waterfront property.
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