Is house buying in Maine really all that different?

June 22, 2018 5:46 PM

We sold our home in California. We moved all our stuff into a moving van (with the help of you MeFi) Now we are buying a home in Falmouth, Maine and have some questions?

We have an accepted cash offer. We are about to start the inspection and escrow process, but wait!, we are being told that people dont use escrow outfits in Maine?

So, our first thought is, Whaaaaaaat? So what happens to our good faith deposit? Oh the sellers broker puts that into a separate account that is not co mingled with any other funds. Call me crazy, but that sounds nutso.

I am not saying I am in love with the escrow process, but having a third party deal with all the Title, Title Insurance, Deed, Parcel Info, the list goes on an on, (the final paperwork from the home we just sold in California is quite thick with documentation of files that were handled by the escrow outfit) Who is responsible for what here?

Our realtor, who has been very supportive and works with a large agency in Southern Maine, has asked us to contact a title company our selves and in turn were told that we also had to get title insurance and again, our heads are reeling from all the things that are supposed to happen, but we are not knowlegeable in these areas, we just want to buy a home with cash?

So, before my head explodes, can someone please outline exactly what I should expect to be doing in order to close the deal on our house and what we should be paying for and what the sellers should be paying for and why isn't this all being handled by our agent or someone else?

I am a bit tired from driving across country the last few days (not there yet) so please excuse any sharp attitude, I look forward to a little information from fellow Meofites,

-H

posted by silsurf to Law & Government (13 answers total)

IAAL, IANYreal estateL.

Short answer: Yes, it's that different.

Longer answer: Your agent should be able to tell you what is customary in your specific part of Maine. If you ask these basic questions, and they aren't stepping up to the job, they aren't being supportive. If you really aren't getting anywhere with them, though, and otherwise like them, ask them to recommend an experienced, local real estate lawyer who you can pay to talk to you for an hour or two to explain basic things like "who holds a deposit" and "what is title insurance" and "why it's super-duper important", even if you don't hire them to run everything for you.

Maine real estate practice is not going to be anything like California's, partially because Maine is weird, and partially because California is a huge, weird market with enormous variation in how things are handled even between counties.

Trying to extrapolate from your experience in CA to ME is a very bad idea. Getting advice from Internet randos is only a slightly less-bad idea. Talk to your local real estate professionals.

(For the record, I would never, ever, ever advise any of my clients to buy a property from a third party without getting title insurance. If they wanted to, despite my professional advice, I would make sure I had it in writing that I explained the Many Very Bad Things that they could get screwed with in my jurisdiction if they didn't. Also, in my jurisdiction, it's very, very, very common in residential transactions for seller's broker to hold the deposit in an escrow account.)
posted by joyceanmachine at 6:25 PM on June 22, 2018

Response by poster: The attorney that was recommend says this about title insurance:

"Our policy for cash deals is we will not get involved if buyer does not purchase owner’s title insurance"

also goes on to say that it is unlikely to find one that will work on the deal without title insurance.

Any thoughts on that appreciated

H
posted by silsurf at 6:30 PM on June 22, 2018

Maine uses real estate brokerage trust accounts, as per this statute. This is not weird; lawyers use them in a lot of states for client funds. They're special accounts that are very strictly regulated by law. (In my state, for example, interest earned on client trust accounts goes to fund legal services for the poor.) The benefit is basically that they're cheaper than using an external escrow outfit; the detriment is that you don't have a neutral third party holding the money. However, they're so strictly regulated -- the brokerage will have insurance that specifically covers claims that arise from misuse of client funds in the trust account -- that I wouldn't worry about it.

(And yeah, you're gonna need title insurance.)
posted by Eyebrows McGee at 6:34 PM on June 22, 2018 [2 favorites]

Title insurance is like a vaccine for getting fucked over. It’s cheap and you probably won’t ever need it but it might save your ass. And house.
posted by seanmpuckett at 6:35 PM on June 22, 2018 [2 favorites]

Response by poster: the title insurance does not seem "cheap" to us, I certainly see the value of it, but it is almost the same as it was for our house sale in Cali (I know I am not supposed to compare) where the value was more than double?

Thanks for all the info thus far!!
posted by silsurf at 6:53 PM on June 22, 2018

Title insurance is one-time payment at closing. It is very cheap for protecting buyers, say, against the possibility that the sellers don't actually have the right to sell it to you, and that somebody else actually owns the house. Or the possibility that the seller never paid off their mortgage. Or that there are hundreds of thousands of dollars of unpaid municipal liens and taxes that could result in the township seizing the house and selling it at auction.

If you feel like the rates or fees you're being quoted are high, there are many online calculators specifically for Maine where you plug in your numbers and get estimates.

I say this gently -- the fact that you're thinking about buying this house without title insurance, the fact that you're surprised that there's a big difference between CA and ME, the fact that the very basic info in this thread has been helpful to you is a big, flashing, giant neon sign that you don't know as much as you think you do about buying and selling real estate, even if you did own property in CA.
posted by joyceanmachine at 8:25 PM on June 22, 2018 [5 favorites]

Response by poster: I dont know anything about buying real estate, I am a photographer. That is why I come to places like Mefi for guidance. I trust in people who are trained in the vocation they choose to apply their trade as arduously and efficiently as I do in cinematography.
posted by silsurf at 5:11 AM on June 23, 2018

Response by poster: I never said (or considered) not getting title insurance btw, I only want to understand something that I am not trained in. Thanks for your input
posted by silsurf at 5:14 AM on June 23, 2018

You need to hire a real estate lawyer to advise you and to ensure this transaction completes successfully. Full stop.
posted by seanmpuckett at 6:02 AM on June 23, 2018

Here's another weird thing that happens in New England that you may not be expecting. If there is a fuel tank on site (like from an oil furnace or a big propane tank) the sellers will determine the value of the fuel in that tank and (may) charge you for it. This can sometimes add a small chunk of money to what you were expecting to pay. And it seems scammish but is totally normal.
posted by jessamyn at 6:41 AM on June 23, 2018

California native, Falmouth resident chiming in to echo the advice above. Things in Maine are different than California, and the process can feel pretty weird by comparison. If you are working with a reputable realtor, then I think following their advice is probably the best course of action.

Also, welcome to Falmouth! If you happen to see a guy in a trilby hat walking a white golden on the Foreside, that's me!
posted by El_Marto at 7:01 AM on June 23, 2018

I recently had a fascinating conversation with a real estate attorney in Vermont. Her explanation of how a title search works suggests one reason why title searches may be more expensive in Maine - in Vermont, many of the title records are stored in written records that need to be manually reviewed. When there is a new purchase or change to title, it is recorded in the book and cross referenced to the previous record concerning the property which links to the previous record, going back to before the Revolutionary War. To determine clean title, you have to find, read and legally analyze each relevant record and hope that you didn't miss any.
posted by metahawk at 8:40 PM on June 23, 2018 [2 favorites]

Response by poster: "You need to hire a real estate lawyer to advise you and to ensure this transaction completes successfully. Full stop."

--Thanks

And thanks for the insights, thoughts, guidance and experience, it all helps immensely.

-H
posted by silsurf at 8:52 PM on June 24, 2018