8 Steps to Buying a House in Maine

Jamie Ayers

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Jamie Ayers

September 16th, 2022
Updated September 16th, 2022

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8 Steps to Buying a House in Maine

Save for down payment | Find a real estate agent | Get preapproved for a mortgage | Choose your neighborhood | Go house hunting | Make an offer | Inspections and appraisal | Final walkthrough and closing

Buying a house in Maine is an exciting milestone, but the process can take some time. Several factors, like your financial situation, market conditions, and the local economy can affect both how long it takes you to find a home and how much it costs you.

For example, homes in Lewiston are hitting the market at $292,000 and selling within 26 days — 47 days faster than the state average! — so you'll need to move quickly if you want to beat out the competition.

The more you know about the home buying process and Maine's current real estate trends, the more prepared you'll be to navigate this complicated process as quickly and smoothly as possible.

No matter where you are in your home buying journey, Clever can connect you with local real estate pros who will help you purchase your Maine dream home!

The best part? When you buy with a Clever real estate agent, you could earn a cash-back refund worth up to 0.5% of the home price. On a qualifying $300,000 purchase, you'd get $1,500. That's real money back in your pocket!

» START: Buy with a top local agent, save thousands with Clever Cash Back

Step 1: Save for a down payment

🔑 Key takeaway:

Your down payment can be less than 20% of the purchase price — $72,856 for the typical home in Maine — but you'll have to purchase mortgage insurance and pay more interest over the life of your loan.

Your down payment is the first part of your home's purchase price that you pay at closing. Your mortgage lender will pay the remaining balance.

Typically, mortgage lenders in Maine want you to contribute 20% of the purchase price as a down payment. That would be $72,856 for a $364,279 home — the typical home value in Maine.

However, you have options to lower your down payment amount.

Government backed loans, like VA and FHA loans, allow you to contribute 0% and 3.5% of your home's purchase price respectively. Even conventional loans allow for down payments as low as 3-5% (though the minimum varies by lender).

Mortgage type
Minimum down payment (%)
Down payment ($)
VA Loan
0%
$0
FHA Loan
3.5%
$12,750
Conventional
3%
$10,928
Based on typical home values from Zillow (August 2022)

But making a down payment of less than 20% comes with some risks.

First, because you're borrowing more money, you'll have a higher monthly payment and pay more in interest over the life of your loan.

Down payment
Monthly payment
Total interest
Total Cost
5%
$1,985
$368,357
$732,636
20%
$1,671
$310,195
$674,474
Based on home values from Zillow (August 2022) and a 5.59% interest rate for a 30-year loan.

Second, you may have to purchase mortgage insurance.

Conventional loans require private mortgage insurance (PMI) until your loan balance reaches 80% of the purchase price. FHA loans, on the other hand, require a mortgage insurance premium (MIP) for the life of your loans.

Mortgage insurance costs around 1% of your mortgage balance annually. However, rates vary based on your down payment and credit score. Typically, your mortgage insurance payment is added to your mortgage payment each month.

VA loans don't charge mortgage insurance. Instead, you'll pay a VA loan funding fee at closing, which can range from 1.4% to 3.6% of the purchase price.

» READ MORE: Everything you need to know about low-income home loans

Maine down payment assistance programs

In Maine, there are several down payment assistance programs to make it easier to purchase a home. These programs provide grants or second mortgages to first-time and low-income buyers to cover closing costs or down payments.

Participant criteria varies by program, but here are a few resources that you may be eligible for:

MaineHousing First Home Loan Program

The First Home Loan Program offers down payment assistance through its Advantage option. This program provides a grant of $3,500 to first-time homebuyers and those who haven't owned a home in the past three years. The financial aid can go towards a down payment and/or closing costs.

To be eligible for this option, borrowers must complete an approved homebuyer education course and make a minimum contribution of 1% of the loan.

U.S. Department of Housing and Urban Development

A list of alternative programs in Maine can be found on the state's HUD page here.

Step 2: Find a great real estate agent in Maine

🔑 Key takeaway:

Interview multiple agents to find one who knows your target neighborhoods, has experience in your price range, and communicates well.

Your real estate agent will be your main ally during the home buying process. Besides finding and showing you properties, your agent will help you make offers, negotiate contracts, and navigate the closing process. Plus, they can recommend other service providers like title companies and inspectors to help you buy your home in Maine.

Don't rush into choosing an agent. Instead, take the time to research and interview multiple real estate agents who have experience in the neighborhoods you're interested in. You should pay attention to a realtor's:

  • Years of experience
  • Number of transactions in the last year (the more the better!)
  • Experience in your price range
  • Overall review score
  • Individual reviews and complaints

Top Local Agents Hand-Picked for You!

Clever matches you with multiple agents in your area so you can interview, compare, and choose the best one to help you buy your next home.

Step 3: Get preapproved for a mortgage

🔑 Key takeaway:

Once you're preapproved for a mortgage, it's imperative that your financial situation doesn't change. If your credit drops, it can derail the process and keep you from closing on your house.

Here are some easy ways to ensure your credit doesn't change after you receive your preapproval letter:

  • Avoid opening new credit accounts
  • Don't close any accounts that have been open for a long time
  • Make all of your credit card payments on time

» LEARN MORE: What factors do mortgage lenders consider?

A mortgage preapproval letter is an offer to lend you up to a certain amount of money to purchase a home. It shows sellers that you are a serious buyer who is financially qualified to make an offer on a home.

Most sellers in Maine will require preapproval before showing you their home.

You don't have to decide on one lender right now. In fact, you should compare interest rates and preapproval amounts from several lenders to make sure you're getting the absolute best terms when you buy your Maine home.

Get Pre-approved Today!

Get matched with a lender who can tell you how much house you can afford. To get started, where do you plan on buying?

Step 4: Choose the right location

🔑 Key takeaway:

Search for neighborhoods where:

  • Home prices are within your price range
  • Home values are on the rise
  • The local amenities support your lifestyle

Currently, the typical home value in Maine is $364,279, but don't worry if that doesn't perfectly match your budget. Home prices vary dramatically from city to city and even from neighborhood to neighborhood!

Also, look at past home value trends. This will give you an idea of how much your home's value could go up over the next few years.

To give you an idea of how appreciation could impact what your house is worth in the future, consider these examples from three neighborhoods in Portland:

Home value appreciation in Portland

Neighborhood
2015
Current
Appreciation
North Deering
$238,880
$479,647
50.2%
Rosemont
$256,530
$556,286
53.9%
Riverton
$205,470
$417,082
50.7%

Step 5: Start house hunting in Maine

🔑 Key takeaway:

The drop in inventory and climbing listing prices in Maine may make it challenging for house hunters to find a great listing that’s within budget. If you’re determined to buy, then keep an open mind to the options your real estate agent shows you. You may have to settle for a home that won’t check all your boxes — but you may also be surprised with the listings your agent can find.

Searching for homes in Maine is the fun part of the home buying process! You'll get to look at a variety of homes and discover what you really want in a home.

Make a list of everything you want in a home and prioritize them. At the top of the list should be the items that are most important to you. This will help you separate your "must-haves" from your "nice-to-haves."

Your agent can help you understand if your wants are realistic for your budget and favorite neighborhoods or if you need to rethink what you're looking for.

Look at current housing inventory

The timing of your house hunt in Maine can have a big impact on your number of options. For example, in Maine, June has historically seen the most homes for sale. Searching in this season could give you more options and a greater likelihood of finding your dream home.

On the other hand, December gives you the fewest choices in Maine. Historically, there are 68.4% fewer homes for sale than during Maine's peak season.

Housing inventory in Maine by season

Season
New listings per month
Spring
2,049
Summer
2,613
Fall
1,802
Winter
1,051
Based on data from Realtor.com (August 2022)

Step 6: Make an offer

🔑 Key takeaway:

Great listings in desirable areas are getting picked up rather quickly, but the market trends tend to vary across Maine. For the best results, speak to your realtor before settling on a figure — they know your local market’s trends and will be able to give advice on how strong to make your offer. That way, you can ensure you offer something that’s competitive for the market but still fair to you.

Once you find a Maine house you love, it's time to make an offer. Your real estate agent will help you write a compelling offer that gives you the best shot of convincing the homeowner to sell to you.

Currently, in Maine, homes stay on the market for 105 days before going under contract. However, every market goes through seasonal changes. During busier months, homes get snatched up more quickly than others.

Historically, Maine homes sell fastest in July, where the average property is only on the market for 64 days. If your home search falls around this time, you should be prepared to move quickly and potentially make offers on several homes before yours is accepted.

On the other hand, if you buy in February, you have a bit more time to search. Homes typically stay on the market 47 days longer than Maine's annual average.

Average time homes spend on market in Maine

Annual average
105 days
January
134 days
February
141 days
March
133 days
April
115 days
May
79 days
June
61 days
July
64 days
August
71 days
September
85 days
October
93 days
November
104 days
December
120 days
Based on data from Realtor.com (August 2022)

» LEARN MORE: What should an offer include?

👋 Next Steps: Talk to an expert!

If you're weighing your options for buying or selling a house, Clever can help!

Our fully-licensed concierge team is standing by to answer questions and provide free, objective advice on getting the best outcome with your sale or purchase.

Ready to get started?

Give us a call at 1-833-2-CLEVER or enter your info below. Our concierge team will be in touch shortly to help.

Remember, this service is 100% free and there’s never any obligation.

Step 7: Inspections and appraisals

Inspections and appraisals are an opportunity for you to better evaluate the home's condition and value before officially purchasing it. You may have an opportunity after this step to renegotiate the terms of your contract with the seller if something unexpected pops up.

🔑 Key takeaway:

  • Inspections: A licensed professional checks the house for any unseen, unexpected, or potential issues.
  • Appraisals: An appraiser hired by your lender examines the house to determine how much it's worth.

Home inspections in Maine

Having your Maine home inspected by a licensed inspector gives you peace of mind about the condition of the property before you commit thousands of dollars to purchase it.

Your inspector should check out the following parts of the property:

  • Roof
  • Foundation
  • Electrical system
  • HVAC system
  • Plumbing

If the home has a septic system, you should also pay for a septic inspection to make sure it doesn't have any problems that wouldn't be covered in a typical home inspection.

Maine-specific inspections

Maine requires sellers to disclose any known issues with a property, but some problems that may go unnoticed. In addition to a general home inspection, Maine homebuyers are recommended to have the following inspections done before closing:

  • Radon testing: The potential of radon exposure must be disclosed to all prospective homebuyers in Maine, but testing is not required for all real estate transactions. Consider getting a radon test kit before purchasing a property to ensure that it's safe.
  • Termite and pest inspection: Termites and pests can often spread widely within a home before a seller is aware of the issue. Getting a professional pest inspection can uncover any issues and prevent more serious issues in the future.

Appraisals

Appraisals determine the value of the property. If you're using a mortgage to buy your new home, your lender will order an appraisal to make sure the home is worth the money that it's loaning you.

» LEARN: 3 options for buyers after a low appraisal

Step 8: Close on your new home!

🔑 Key takeaway:

Before you close on your new home, you and your agent will do a final walkthrough of the property to ensure that it's still in the expected condition.

On the closing date, you’ll meet at the title company to finalize the loan and title transfer of your Maine home.

First, you'll need to review and sign several legal documents. Most buyers take about an hour to complete all of their paperwork, so take your time and ask your agent if you have any questions along the way.

Some key documents you'll need to sign will include:

  • Your final loan application
  • The deed
  • The mortgage promissory note
  • The disclosure statements

After completing all the paperwork, you’ll pay your closing costs to the title company. The title company will collect the total amount you owe and then distribute the funds to the appropriate parties.

As a buyer, you can usually divide your closing costs into four categories:

  • Lender fees: Fees paid to your mortgage lender for originating and underwriting your loan. Lender fees may cover additional costs related to your loan as well, such as appraisal fees and survey fees.
  • Title and escrow charges: Fees paid to the title company for facilitating the closing process, performing the title search, and providing title insurance.
  • Prepaid costs: Ongoing homeownership expenses. Most lenders require new homeowners to pay for specific costs up front, such as property taxes and homeowners insurance.
  • Other closing costs: Miscellaneous expenses that vary from buyer to buyer. Common miscellaneous fees may cover natural disaster certification fees or real estate attorney fees.

Buyers in Maine typically pay 3–5% of the purchase price in closing costs. For a $364,300 home — the typical home value in Maine — that's between $10,929 and $18,215!

» LEARN MORE: Closing costs for buyers in Maine

Should you hire a real estate attorney?

Maine does not require you to hire a real estate attorney to buy a home. However, depending on your circumstances, you might consider hiring one anyways. If you do, treat the process similarly to hiring an agent. Interview multiple attorneys and proceed with the one that best meets your needs.


Frequently asked questions

  1. Save for down payment
  2. Get pre-approved for a mortgage
  3. Choose your preferred Maine neighborhoods
  4. Partner with the right real estate agent in Maine
  5. Go house hunting
  6. Make a strong offer
  7. Inspections and appraisals
  8. Do a final walkthrough and close

Yes! MaineHousing offers low, fixed-rate mortgages through its First Home Loan Program. Eligible homebuyers may also apply for down payment assistance of up to $3,500, as long as they contribute at least 1% of the home's purchase price

Qualified buyers must have a credit score of at least 640 and stay within the household income limit set for their county. Purchase price limits also apply and vary based on which county you're buying property in.

» READ: What are the top first-time homebuyer programs?

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