Their listings often lack indoor photos and use optimistic descriptions such as “needs finishing touches” or “land for sale with bonus home,” but Maine homes priced at $50,000 or less can offer a deal to the enterprising buyer.
There are about 30 homes in that range across the state, with some starting as low as $10,000. These homes are most often neglected, with some needing to be torn down rather than remodeled. The higher-priced ones generally need work, but it may not be as extensive.
Some of these homes are in desirable neighborhoods. With the median sales price for an existing single family home in Maine rising 22 percent over the past year to $297,500 in February, these jalopies of the market may offer a toe into homeownership. But they aren’t for the faint of heart.
The sellers of a Brewer home found that out the hard way. The town foreclosed on the home four years ago, and it was purchased by someone who sold it to the current owners in 2020 for $35,000. The home on South Brewer Drive needed a complete renovation, which the new buyer hoped to do.
“They fixed the roof but were overwhelmed by how much work it was going to take to fix it up and live in it,” Gus Ofili, the listing agent with ERA Dawson-Bradford Co. in Bangor, said. “It was vacant for so long.”
The home went on the market in January for $49,000, but the eager sellers lowered the price by $10,000 in February. The city has assessed the 940-square-foot home, which has two bedrooms and one bathroom, at $45,500 in 2020 with property tax of $720.
Ofili said he has shown the home more than 40 times since January, but the home is small and needs at least $50,000 worth of rehabilitation work. Still, he thinks that an investor or contractor could buy it, fix it and resell or rent it. He said it could be worth $150,000 when it is finished.
Ofili, whose side job is flipping houses — buying them to renovate and reselling them quickly for a profit — expects more low-priced homes to come onto the market later this year or early next year. That is because paused mortgage payments under a federal foreclosure moratorium ended last July.
More foreclosures are expected to follow. Maine ranked 13th nationally in February with the highest rate of foreclosures at 136, or one in every 5,462 homes, with the most in Androscoggin County, according to ATTOM Data Solutions, a foreclosure tracking firm.
The state also ranked second behind Vermont as the U.S. state with the highest percentage of unoccupied homes at almost 23 percent, or 171,323, according to LendingTree. Homes can be unoccupied because they are uninhabitable, still on the market to be sold or a vacation home not currently in use. Ofili said not many investors are looking now because they are waiting for off-market deals and foreclosures.
Buyers for homes requiring a lot of repairs need to have access to contractors, who are booked out six months or more in many areas of the state because of the active real estate market. Special permits are needed in some cases, such as for one ranch-style home in Caribou listed for $19,500, which saw a $2,500 price cut in February.
The 832-square-foot home on Veronica Street with two bedrooms and one bath on a small lot has been unoccupied for five years and needs significant repairs. The city assessed it at $22,300 in 2020 with property taxes at $525.
The realtor’s ad describes it as located in a small neighborhood in the heart of Caribou, close to all amenities including schools, the library and grocery stores. It is near the public boat landing and hundreds of miles of snowmobile and ATV trails.
The home, which is mostly gutted inside and “ready to renovate your way,” is being sold “as-is.” It will need a new certificate of occupancy. The seller is listed on town property records with an address in New Jersey.
“The owner decided to not move up here,” Lydia Kieffer-Till, the seller’s real estate agent at RE/MAX in Caribou, said.
Kieffer-Till said the house was previously occupied by a series of tenants and not kept up to date. The inside and outside are in poor condition, although the home is fixable, she said. Similar homes in the area that are in good condition are selling for $100,000 to $140,000.
“But it’s basically a lot for sale,” she said. “The structure is a bonus.”