Insurance Agent · Olympia, WA · Member since 2014 · 168 posts · 88 votes
Hello BP brilliance factory!
A dear friend of mine lost her father recently, and he left his home and 100 acres of land, both in northern Maine, to my friend and her sister. Neither one of them lives in the area.
Before his death, her father was unable to work and strapped for cash. He put the home and the property on the market at fire sale prices. He passed before they sold.
Given that the values of the properties are considerably higher than the asking prices, my friend and her sister would like to try to sell them closer to market rates. This could take some time, since real estate in northern Maine isn't what you'd call high volume or fast-moving. Neither of them has the resources to pay the mortgage on the home and the taxes on the land while they wait.
Is there a vehicle out there - a financial product, an investment strategy, or whatever - that they could use to buy themselves some time? Any input would be greatly appreciated!
Residential Real Estate Broker · Washington, Washington D.C. · Member since 2013 · 150 posts · 77 votes
12y
I would start by having them talk to the mortgage holder. The lender will probably have some alternatives that they can pursue rather than allowing the loan to go into default because they can't make the payments (loan modification?, temporary relief on making payments until the property sells?). Secondly, they should get the ball rolling on the sales process with a local real estate agent.
. First of all, my condolences to you and your friend for your loss.
Since you don't mention any of the financials or detailed description of the property its difficult to give sound advice. With that said I'm wondering if the home could be rented out and/or the land be leased for farming. I know of many younger couples who are looking for farm land to buy/lease to live and work on. One couple I know are organic farming and living in a farm house they lease. Not sure about this property and its area and whether renting makes sense but I thought I'd throw it out there.
Good luck to your friend .Let me know if I can be of help.
Insurance Agent · Olympia, WA · Member since 2014 · 168 posts · 88 votes
12y
I'm not sure what the equity position is right now, but I've asked her to try to find out. I believe that there is some. The 100 acres is owned outright.
I believe it's pretty rural. Will a property manager get involved in a short-term rental? A PM friend in LA said that it probably wouldn't be worth the investment of time if they just want it rented while it's on the market...and it might be harder to show occupied.
That's a great idea for the land. I believe it's pretty well treed right now, but I wonder if timber value + a farm lease on part of it could at least pay the taxes and liability coverage to keep the property in the family.
The fire-sale price on the home was around $220k. I'm not sure of the value of the land.
I have some good contacts for tree harvesting if you are in need. Just send me a PM and I can pass them on. BTW, if there are good old white pine stands on the property they can bring a premium.
Portland, ME · Member since 2012 · 616 posts · 550 votes
12y
If the property was listed at a "fire sale price" and didn't sell, perhaps it wasn't such a good deal after all. People often feel that their homes are worth much more than they are. If it was exposed to the market for a reasonable amount of time and didn't sell, than it was overpriced. What are they basing their value on? It's not that unusual to have large tracts of land sell in northern Maine, so there should be comps. Also, I have found that the tax and insurance values often have no basis in reality.
If the home has been vacant for a while, I hope it hasn't frozen up and that they purchased a "vacant home" insurance policy.
Hudson, MA · Member since 2013 · 22 posts · 12 votes
12y
It just depends where in northern Maine. Some people call Bangor northern Maine, when it's actually central. Anything North of Millinocket will take a special buyer or a sportsman who is purchasing for the land primarily.
The tree harvest is an idea, not sure if the state still gives you a tax break there. You have to be careful though and make sure the ROI works in your/her favor. Gets expensive running equipment. Very few pulp mills left and they don't pay all that well per cord.