Sale

Owner Financing Maine Land

If you are interested in buying Maine land with owner financing find some great land parcels at our listing page. Are you trying to sell your land? Maybe you should try financing your Maine land sale. Why should you consider this option? Because owner financing can help get your land sold faster and earn you more money. Here are a few reasons why and other things you should know.

Most Banks Don't Offer Land Financing

When a buyer for Maine land is looking for options to finance their purchase they usually start with the bank that holds their checking and savings accounts. In many cases, if the acreage of the parcel is larger than a simple house lot, the lender will not consider the loan. If they do interest rates may be high, or worse, the down payment requirement is not reasonable.

Specialty property types such as Maine timberland investments, hunting/fishing/recreational land, larger waterfront land parcels, farmland and other large acreage properties can be difficult to secure financing for. In Maine there are traditional banks and credit unions that offer attractive terms for land. However, the average buyer looking to purchase land will not know who those lenders are and will often get frustrated with the search. They will naturally look for ways to make the process cheaper or less complicated.

Buyers Prefer Owner Financing

Many buyers prefer the ease and speed that owner financing allows them to purchase land, so they search land for sale with such offers. This gives the land owner who is offering financing terms competitive advantage over other sellers. Although owner financing interest rates are usually higher than a bank rate, the lower down payment requirements, fewer required fees and closing costs combined with a less hassle process are often preferred by potential land buyers.

Amortization

Not only does it help get your land sold faster, another good reason to finance your land is the interest you can earn. When your Maine land sells, what will you do with the proceeds? If you said "put it in a savings account" why? Unless you need the liquidity cash, your money could be working better for you with amortized payments for the land. The front end of an amortization is mostly interest. Even if the borrower pays off early, you will be assured to collect a return on your investment. Looking at all of the options out there, owner financing can be hard to beat.

Less Risk than other investments

If done properly, holding a first mortgage on your land is a safe position to be in. Should the buyer/borrower default on repayment, you will have the land as security. There will be costs to pay for the foreclosure action should the borrower default. To reduce your risk, require enough down payment to cover your legal expense of recovering the property.

Things to consider

How much down payment should you require? That depends on many factors. Among others these are a few: how much risk are you willing to take, the interest rate you will receive, the buyers qualifications and standing timber values that could be removed.

The process for lending has become more complicated for the land owner than it was just a few years ago. The reason is the need to be in compliance of new federal regulations on lending. You will hear a lot of different opinions from lawyers, land owners, buyers and others about these regulations. We advise our clients to consult with legal counsel and private lending loan originators regarding owner financing to be sure that all legal documents, lending processes and disclosures are complete.

 

How Snowmobile and ATV Trails Effect Maine Real Estate

Why do you want to purchase a Maine log cabin or seasonal home for vacation with lots of land? Many buyers do for recreation opportunities. Acreage that fronts a local trail system or one of the statewide ITS snowmobile trails is appealing to many buyers who love outdoor power sports. ATV riders often enjoy rules in Maine that allow their machines to be operated on or along paved roads to access connecting trails.

Are Trails an Easement?

Riding the trails in Maine is a tradition that goes back nearly 100 years. Aside from a few state owned trails, snowmobile and ATV trails are on private land with land owner's permission. Keep this in mind while you are enjoying the ride and appreciating the views along the trail. The property owner has no obligation to allow this access. Large land companies allow this for public relations. Private individual landowners may allow access because they like to ride or just do so to help their neighbors enjoy Maine. All do this for free. You can help avoid losing this access by staying on the trails and practicing carry in carry out ethics.

Trails Impact Market Value

We are often asked if a trail on near a land listing has a positive or negative effect on the property's market value. The influence on value will be a positive if the majority of prospective buyers like snowmobiling and off road vehicle sports. A large segment of buyers do enjoy it and either live here or come to Maine for the extensive trail system. The trail can have a negative impact on value if it is poorly situated, too close to an existing home or camp and if it has damaged the property with deep ruts and litter left behind by irresponsible operators.

Liability

Another question that is often asked us by prospective buyers is "What liability will I have because a trail crosses or fronts my property?" The State of Maine has a landowner liability law also referred to as the recreational use statute. The law favors Maine landowners and protects them from suits brought by persons on your land for recreation and other uses.  According to the Maine.gov web page, there has not been a single reported successful case against a landowner where the Maine Landowner Liability law applied.

Join a Club

If you love power sports you need to join a snowmobile or ATV club or organization. These groups are organized by community leaders who help maintain trails, work to get landowner permission for the trails, organize rides, do community and charitable fund raising, maintain club houses for a place to stop or trailer to and so many other benefits not mentioned here. If you do not have time to participate, at least make the monetary contribution of membership. This money will help keep your favorite trails open.

Finding Trail Maps

Maps are not always easy to find. Local club membership will help make locating a map easier. Club membership also will introduce you to experienced riders who often will show you the trails. Many of Maine's recreational trails are in remote regions, for safety, try to ride with others in case of a breakdown. The Maine Snowmobile Association has an excellent trail map of Maine's ITS trails. See the links below to help understand Maine liability laws, locate trail maps and clubs for different regions of Maine.

Maine Landowner Liability Information

https://www1.maine.gov/IFW/aboutus/commissioners_office/OutdoorPartnersPgrm/landowner_liability_explained.htm

Maine Snowmobile Association

http://www.mesnow.com/

ATV Maine

http://www.atvmaine.org/

Investing in Maine Timberland

A friend asked me today if Maine timberland is a good investment. I think it is and invest in it myself.  For me, there are many reasons for doing so.

I became interested in timberland because it has been a proven investment for many of my clients and other family members. I have witnessed well managed land provide periodic returns of stumpage while the land remained well stocked with trees for future harvest. As an investment, one of the key features of timber is the ability for the owner to leave trees on the stump to grow and move up to a more valuable product class. Unlike other crops, if markets are not good, trees can be left for a later harvest when markets improve.  Additionally, with a number of other potential uses, land values over time usually continue to rise.

 

Managed Clear Cut

Managed Clear Cut

 

I would also credit forestland for helping to improve my mental health. Spending time in the forest I own has a relaxing effect on my mind.  Doing the physical work of timber stand improvement not only helps increase the value of my woodlot, I find it the perfect stress reliever as it lets me forget about the complications of our modern world.  Improving land of any kind gives me and most others I know a great feeling of accomplishment.

As a hunter, owning timberland gives me the ability to help our local game animals by managing areas for them. New growth from a harvest provides a desirable food source and cover for many of our favorite species like ruffed grouse, woodcock, rabbit, whitetail deer and moose. Areas left heavily wooded will provide good winter cover for those same animals.

The State of Maine gives a landowner a better chance at the any deer permit lottery. Any private landowner is eligible for the landowner permit drawing if the person owns a particular piece of land that is: 25 or more contiguous acres in size; is agricultural, forested or undeveloped land; and open to hunting, including hunting by permission. Any dependent living in the household of a qualifying landowner is eligible.

Maine has another benefit for timberland owners. The tree growth tax program is a special tax status available for owners who agree to manage their lands the commercial harvest of the forest. This reduction in property tax is the reward for the landowner to properly care for the forest and provide the raw materials that support our forest products industry. The requirement to have a Maine licensed forester provide a management plan also ads value to the ownership.

Timberland is a great asset that can provide you with cash returns, pride of ownership and recreational pastimes; it is also a potential legacy for your children and grandchildren. Properly managed forests have historically supplied generations of owners with all of the above.

If you are interested in learning more about timberland investing, United Country Real Estate's timberland specialty property group has an informative free E Book written by Eric J. Holzmueller PhD.  Eric is a forester and one of United Country's many licensed foresters who are also land brokers. You can download the free book at http://investintimberland.com/

SELL LAND IN MAINE FOR SALE BY OWNER

Why offer your Maine land for sale by owner? Most who consider this option will say "I want to save the commission that would be paid to a real estate agent or broker". So what do you need to know and do to sell your land yourself?

THE PRICE IS RIGHT - RIGHT?

Assuming you have a good idea of what you own, with good property boundaries, good title with insurance and legal access the first thing you need to do is establish a price for your land that will cause it to sell. Because there is no rule of thumb that will dependably set a price, you need to do a lot of research of sold properties and those land parcels for sale that your real estate will be competing with for buyers. This is critical for two very important reasons. First, you need to be sure that you do not underprice your property. Obviously if you do you will be leaving cash on the table. Second, and more important than the first, setting a price too far above market value will result in no sale at all or may cause you to sell below market value many months or years later. Accepting a less than market price after a longer time waiting for your cash, your losses may be hard to calculate.

FINDING MONEY

Next, you need to be prepared with ways for prospective buyers to get financing. Do you know what current requirements are for credit score, down payment and acceptable income to debt ratios that will satisfy conventional lenders? Call a few and see what the underwriting guidelines are. Are you going to offer owner financing? If so, what will your terms be? Do you have an attorney and loan originator ready to go with the legal documents and disclosures?

CYA

Do you have a Purchase and Sale Agreement ready to fill in when you locate the right buyer? If not, you need to see your attorney and get one drafted. Have you prepared disclosures about the land that will help limit future liability? These and other legal details should be covered before the property is shown or marketed.

FSBO MARKETING

Now that you have decided on an appropriate asking price, not too low not too high, you need to attract prospective buyers; hopefully lots of them. The amount of land out there for buyers to see is vast. How do you make your property stand out? Spend some money and invest some time. To reach buyers interested in your land you need to understand who you are marketing to and how to reach them. What are the minimum of things to do to get your property noticed?

With nearly 95% of all buyers using the internet to locate property, you will need to build a web page or pay someone else to do it. Then you will need to buy space on sites that will get your webpage found. There are a number of webpages that do not charge for listings but most usually don't appear high in searches. Do not discount print advertising as some prospective buyers still look there. Which publications you should use depends on your target market. Also, have you put together an informative package of details, high quality photos, maps, disclosures etc. that buyers want to know and see. You need to do this because most buyers outside your immediate area will want those details before making a trip to look at your acreage.

QUALIFYING - SHOWING - NEGOTIATING

Now that you are getting emails and phone calls from prospective buyers; how do you separate qualified buyers from the unqualified? Ask a lot of questions. If you need to travel any distance to your property gasoline alone can eat into your bottom line. So showing your land to someone who is not ready, willing and able to buy should be avoided. Do they have a down payment, good credit? Are they ready to buy now or next year?

Showing your land should be easy for you. Make a plan to show the property's best features. Be sure to bring a map and your compass.  On land of any substantial size you can get confused walking in the woods while talking with someone.  Getting lost in the Maine woods is a sure way of turning off a prospective buyer.

It pays to make a plan and try to stick with it when negotiating a transaction. Decide what your bottom line is and stick with it. This decision should be made with the knowledge you gained while studying the market data mentioned earlier.

WRITE THE OFFER - DISCLOSURES - ESCROW MANAGEMENT

You had a successful showing and your customer wants the land. What's next? Fill in the purchase and sales agreement you got from your attorney. Enter the names, dates, price, terms, disclosures etc. Both of you sign it, get that deposit to seal the deal and consider letting your attorney keep it in his/her escrow account. Follow through with any due diligence items agreed to in negotiation. Finally close at the location both you and the buyer agreed to. Let an attorney or title company handle this to be sure all required tax forms are done. You don't want Uncle Sam or the state tax man looking for you and your buyer after a closing.

IN CONCLUSION - WILL YOU SAVE MONEY

If all of this seams overwhelming consider this. Why do buyers like to buy for sale by owner property? Why would they go to an owner who has just one property to offer them? They look directly with the owner because they hope to discount the price by the cost of a real estate brokerage commission or more.  Wait a minute, how is it possible for you and the buyer to both save on the commission?

Unless you are a professional land dealer (often mistaken by buyers as a "for sale by owner") with multiple properties available and all systems above in place, you are going to pay a real estate commission. The real question is do you want to pay it to the buyer of your property, or to a professional land broker who will take care of all the above items, takes the risk of paying the cost of all or most of the marketing expenses, and not get paid unless and until the land is sold?

Innovative Maine Company Provides Dependable Drinking Water

Are you looking to buy land in Maine to build an off grid, strategic location property?  Maine has some great properties for sale that will fit your needs.  There are a lot of criteria to consider but a few basics hit the top of the list.  Today, let's just look at the basic need of drinking water.

After listening to the news about the California water shortage, I realize how blessed we are in Maine.  Being born and raised here, I do not remember a time we ever had to ration water.  The quality of drinking water in Maine is excellent.  Once in a while you may run into some higher mineral contents but nothing a filtration system can't fix.

My home has a 160 foot deep drilled well with 20 feet of casing and produces 10 gallons per minute of some of the best drinking water you will find on earth.  Right out of the tap with no filtration!  The cost to drill is $12/foot for drilling and $12/foot of casing.  20' of casing is the minimum amount required by code.  Then factor in some excavation work and the well pump and that will add about another $1,300 to $2,000 depending on your location.

My home is connected to the grid but what happens when you lose power?  That's were Bison Pumps enters the scene.  Their slogan "The Premier Hand Pump" and after having one installed at my home, I have no doubt that my drinking water needs will be met during my lifetime with or without power.   The design, engineering and quality of the working components are second to none.  I was not looking to buy the cheapest hand pump on the market but I wanted to be confident that no matter the season (Maine can get some extreme cold winter weather), I would be able to get drinking water when the need arises.

Bison Pumps, www.bisonpumps.com was founded by David Harbison, Jr of Harbison Plumbing in Houlton Maine.  We've all heard the saying "necessity is the mother of invention", well (no pun intended), Bison Pumps is a true example of this old saying.  Maine's ice storm of 1998 left 1000's of people without power in the middle of winter, some for a few days and some for weeks.  After seeing so many people struggle to meet the need of basic drinking water, Bison Pumps was developed.

I had the pleasure of meeting David and his son Jonathan (3rd generation plumber) this summer as they installed my pump.  They are first class people and hard working Mainers.  It was very interesting talking with David and his vision of how Bison Pumps could help around the globe with the world water crisis.

Whether you are looking to build off grid or just looking to have a drinking water solution in case of power outages, Bison Pumps should be top of your list.

How To Buy Land In Maine

Purchasing a property, especially land, can seem like a difficult task. To make it easier you need to start with a plan. Here is a step by step check list of how we approach purchasing.

1. How much can you spend? Are you paying cash, getting bank financing or hoping to find a parcel with owner financing? If you are financing the purchase, work with a lender to see how much you can borrow. This is the most important step. Knowing your price limits and securing financing before you start looking at parcels will save you time, money, shorten your search for land and improve your negotiating position. Statistics from the statewide MLS show the average parcel of land that sold in Maine during the last 12 months closed at about 87% of asking price. This would indicate that looking at lots priced more than 15 - 20% above your price limit is most likely a waste of your time.

2. Pick a location or at least narrow it down. Prices will vary a lot in Maine depending on where you look.  Do a little research online and you can find out a lot about most areas of the state. Call local chambers of commerce for information on the areas of interest.

3. Start looking for property. The internet makes this process much more efficient. Most sites will allow you to save searches and notify you when new land comes on the market that matches your criteria. If you are working with a land broker you can ask them to set up a saved search on the statewide MLS. The broker can program this to automatically send you new listings.

Helpful Hint - When using search engines like Google, be specific using search terms for the type of land you are looking for. For example: timber, waterfront, farm, recreation, hunting, fishing, development, investment or combinations  of these terms and others.

If your timeline is more than 3 months out, subscribe to local magazines such as the Northwoods Sporting Journal. While the property you see advertised there has probably been on the market for a month or more, local magazines, newspapers or journals can help you experience the flavor of different areas, the recreation available in these locations and any current social and or political issues.

Helpful Tool - Download Google Earths free software to your computer. Don't confuse this with the online Google Maps, this is a more useful tool. Ask the owner or Realtor to email you a shape files which will show you the approximate locations of the property you are looking at. These files can be opened in Google Earth. This bird's eye view (and in some areas street views) showing the outlined area of the prospective land can help answer a lot of your questions.

4. Now that you have located some promising Maine land, have studied the data and maps sent by owners or brokers, it's time to take a trip to see the properties. If you are not familiar with Maine weather, you should know to bring layers of clothing and sturdy foot wear for changing conditions. Other good items to help make looking at land more enjoyable would include a small back pack, raincoat, snacks, water bottle, a Delorme Maine Atlas and Gazetteer and camera.

If you are going it alone, also bring detailed maps of the area, a compass and GPS if you have one and know how to use them. Because Maine is a large state with a lot of remote regions of interconnected forests, if you have no experience in land navigation we highly recommend bringing along someone who does. Our agents always let someone know where they are going just to be safe, we advise you do this as well in case you do not return on time.

5. Get on the property to look at the features that attracted you to it. Be sure to view some property lines and abutting properties for potential concerns. Are there nearby areas of interest that make the land more appealing? If so, take time to see them.

6. Now that you have found some acres that satisfy your wants and needs, it's time to write an offer. The emphasis is on the word "write". Verbal agreements don't carry much meaning with an owner who does not know you. Review required property disclosures for any potential hazardous materials, rights of way, tax status and other issues. Write in any contingency you need including due diligence inspections if you have unanswered questions. Don't forget to bring your checkbook for earnest money deposit.

Words of wisdom we can pass along from our own experience. If you find a property that you like and want and you know that the price is fair. Don't mess around offering a lot less, UNLESS you are prepared to lose it to another buyer. A land owner and their real estate agent know when they have a properly priced lot. Even if the property has been on the market for a few months don't assume the owner is going to sell way below market. The average time on market for Maine land last year was over 7 months. Even well priced land in Maine can take some time looking for its new owner.

7. Your offer was accepted! It is time to start the closing process. Ask your lender or your land broker for a list of title companies or attorneys that handle real estate transactions. Work out your due diligence, get that title checked, buy title insurance and close the deal.

8. Enjoy your Maine land.

Comments

  1. David Rivela on

    I'm trying to purchase a lot of land( about an acre or 2) with a manufactured home included on the lot. How do i go about doing that?
    • Phil McPhail on

      You will need to do a construction loan with your bank or mortgage company. Some sellers will finance the lot sale with a balloon payoff when your construction or new purchase loan is completed.

Recreation and Land Opportunities on the Penobscot River

Named for the Native American tribe, the Penobscot River has a history as a colonial trade route and the delivery system for the logging industry in Maine during the hay-day of river driving. With its 4 branches and main stem it is reported to be about 350 miles long. The Penobscot originates from large northern Maine lakes and drains an immense area of northern Maine. Several other river system drain into the Penobscot such as the Mattawamkeag River, the Piscataquis River and the Passadumkeag River. One could spend a lifetime exploring the Penobscot and its many branches.

The north and south branches are in a remote wilderness part of Maine. Getting there requires a long drive over access controlled logging roads. The land owner association that owns these roads charges a nominal fee at the gates managed by North Maine Woods (www.northmainewoods.org) and also maintains many camp site locations along these stretches of river which they also charge a small fee for. This is a scenic area that will appeal to hikers and photographers. The river has a wild population of brook trout and landlocked salmon. The ruffed grouse hunting in this part of main is legendary. The north and south branches feed into the West Branch. This area is mostly owned by large institutional landowners. You can't find much land to buy here unless you are in the market for the occasionally offered township.

 

Whitewater Rafting

Whitewater Rafting

 

The West Branch of the Penobscot is THE whitewater river in Maine. The river segment beginning at McKay Station in the Ripogenus Gorge to Debsconeag Falls has a commercial rafting industry that thrills thousands every year. This section of river is also world known for its challenging fly fishing for wild landlocked salmon. This area is also mostly owned by large landowners and with much conservation easement you will rarely find any property for sale in this section with the exception of a few camps or cabins on leased land.

 

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Fly fishing the West Branch Penobscot

 

The upper reaches of the East Branch of the Penobscot is wild brook trout heaven. This section is a very scenic canoeing hotspot with views of Mount Katahdin and the other nearby mountains. Those canoeing this section should plan ahead for portages around a few tricky falls. Buyers looking for a camp or home site can occasionally find land for sale at the lower end of the East Branch.

The West and East Branches of the Penobscot come together in Medway to form the main stem of the river. From this point to the Atlantic Ocean is where you will find many small and large land parcels for sale. Prices here will vary greatly depending on the quality of the waterfront. From Medway to Old Town the river is noted as one of the best smallmouth bass fisheries in the United States. The river still has a small protected run of Atlantic salmon, sorry no fishing allowed for them at this time. A recent restoration project in the Bangor area has breached a number of old dams and has reopened the river to runs of shad, alewives and other anadromous species. This segment of the river is also a great spot for boating including trips from Bangor to the open ocean.

The Penobscot River is my favorite Maine river. If you come to Maine to buy land or just to enjoy the outdoors be sure to put it on your list of places to visit.