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The "Build or Buy" Decision For Maine Lakefront Property Buyers

By
Real Estate Agent with Anne Plummer and Associates

Mr Lakefront is often asked by lakefront buyers "which is a better deal for me: finding a nice lakefront lot and building exactly what I want or is it better to find an acceptable existing home and taking a run at it

From a good deal standpoint I would say that, in this current incredible buyer's market, it is better for one to find a nice existing home and negotiate the best deal you can. How come?

Existing lakefront home prices have fallen about 15% on the average. So if a place was worth $500k in late summer of 2005 it is worth $425k today. Bad news for sellers, great news for buyers.

In some rare cases, I have seen motivated sellers parting with their lakefront properties at 20 to 30 % less than what they could have gotten four years ago. These situations are not normal, but they happen

My advice was just the opposite in 2004-2005. Back then it was a better deal to find a nice lot and build what one wanted. Sellers were demanding seemingly inflated prices for their existing homes and, more often than not, getting them. Here's an example.

I did a market analysis for a seller in late Spring 2004. The analysis indicated a market value of $480,000. I recommended this asking price to the seller. The seller said "Let's list it for $550,000″ .

For a few months it sat on the market but by the end of the season we got an offer which was accepted for $529,900. The seller said, "See Tom, I knew my place was worth more" The truth is, he was right. Over the course of the season, about a period of 5 months, market values had escalated quickly because of incredible demand and short supply.

Back in the summer of 2004 it would have been better for a buyer to find a nice lakefront lot and build a place. Existing lakefront home values were priced at their highest - and then some. While the cost of building materials and labor had also gone up , it was still a better deal to build.

So, in a nutshell: Seller's market = BUILD, Buyer's market = BUY.

Speaking of buying, you can check out all the current offerings for lakefront property in Maine right on our website. Our Lakefront Locator is the only tool you need to find just the right lakefront property for you.