Davids’ Big Island Mauna Lani Real Estate

November 12, 2009

Buyers Are Liars? Not Today, Buyer’s Coming to Hawaii Are Smart & Knowledgable

Filed under: General — hisadmin @ 5:19 pm

Have you ever heard the phrase “Buyers Are Liars?”    Yes? Agents have used this term for as long as I have been Hawaii licensed.  In fact, before I bought our first house back in the 70′s, that saying had been kicked around from both sides of the Atlantic Ocean to the Pacific Ocean.  As a consumer of real estate , I was labeled that dreaded three letter word.  Ouch!!!  I never expected me of all people to be tagged as one of those!

Sometimes,  buyers are not clear about where they are in the buying cycle.  Buyers get nervous especially with large money investments being on the table.  Timing is everything.  All the buying conditions must be right.

As an agent, I  have been left out & disappointed when a buyer just cannot make up their minds.   I have to admit that it is an emotional  letdown not to get a contract signed and open escrow.  Buyers are smarter today with more knowledge.   It is critical to understand what your buyer is trying to do when they come over to the Big island and meet with you.

 Never assume anything today.  Buyers coming to Hawaii & our Big Island have done their homework before the plane lands at Kona International.  They have searched the net.  They have read blogs, chatted and been online getting as much information as humanly possible.  They are ready! Believe me they are not liars!   They want deals & want to make the most of the present declining real estate Hawaii market.

Buyers need us, real estate professionals,  to discover their needs and wants. Buyers  also need our guidance.  Patience is a must.  It is my opinion that buyers may act that they know everything about purchasing real estate but may be out of practice or not familiar with Hawaii and the process.  Therefore,  be prepared.

Never Assume that Buyers…

1) Understand the local market.   Some buyers believe what they hear. What they hear from other Realtors, from the media, and from friends and family. It is our job to educate them about our Big Island market, trends, location, climate, culture, taxes, etc. Educate!

2) Understand Agency.  Some buyers do not understand agency.  Some buyers are unaware of agency and do not understand the fiduciary duties of an agent. It is an agent’s  job to educate potential buyers on the importance of agency before they begin their search.

3) Understand How We Get Paid.  Some buyers think they have to pay a buyers agent. Some ask me what my fees are?  Let buyers know that they do not pay you if the property is represented in the multiple listing service.  

4) Understand Our Real Estate Contracts.   Some buyers do not understand our contracts.  Do not assume that they understand real estate terminology. It is an agent’s responsibility to explain the whole contract.  Take the time to educate your client.

 5) Understand the Purpose of a Home Inspection.   Some buyers do not understand that the home inspection is a contingency to the contract if performed. This home inspection is for their protection.  

 6) Understand the Negotiation Process.  Some buyers do not know how to negotiate and look to us to help them.  Some do not understand this Big Island market as we real estate professionals do.  The buyer make the final decision; it is our job to guide them.

 7) Understand Their Legal Rights.  Some buyers do not understand the legal aspect to real estate transactions. I recommend that they hire a real estate attorney. Leave the legal advice to the professionals.

 8) Understand the Loan Process.  Somebuyers have never purchased a 2nd home or vacation investment property.  The loan process  in Hawaii is different from the mainland.  Buyers are from all parts of the world.  Suggest a number of good mortgage companies who have worked with what type of property your buyer is purchasing.  If property is bank owned or short sale, focus your buyer on companies that know what they are doing.

Real estate has transformed into an open exchange of information and data.  Buyers need help in processing information to make their dreams of owning Hawaii real estate a realty.

Agents be aware not to point the finger at our buyers who may not be ready to buy today.  Buyers are not liars.  Maybe a bit more cautious or waiting  longer to decide.  The real estate industry over the past few years has had some highs and lows.  Stability is returning.

 Key is to educate.   Prepare a buyer packet or buyer checklist for your client.  Do your homework.  Do your very best to represent your client and not have them go back to where they came with the words on their lips , “Agents Are Liars”

October 24, 2009

Foreclosures in Hawaiian Paradise; What are the risks?

Filed under: Luxury Investment Big Island Real Estate — hisadmin @ 12:48 pm

Why should you or shouldn’t you buy a foreclosure?   Pros & cons  exist.  No matter what buyer category (2nd home, investor, rental income, etc.)  deals on foreclosures  can be found in the Mauna Lani Resort and other Big Island districts and resort areas.  Prices are discounted but there is risk.

It is essential to understand the pros and cons before making a purchase.  Good advise can be obtained from professionals who know the facts.  Consult those who have the knowledge and not what you have heard from a friend or associate.

Foreclosure 101:  There are several types of properties know as “foreclosures”. Pre-foreclosure (also know as short sales), the homeowner defaults on loan obligation & wants to sell to avoid going into full foreclosure (referred as REO).  Foreclosures  becomes property of the bank/lender.  Deed is surrendered & property is now REO (real esatae owned) by note holder. 

Pros: Lender & seller agree in terms to sell in a hurry with listing price reduction.  Buyer is at advantage.  Lender does not want to be in the real estate business and are often willing to  offer discounts; the longer they hold these properties, the more it costs in terms of taxes, maintenance, etc.  All sorts of price points are available & a buyer can find equity, appreciation and cash flow in a foreclosure purchase.

Cons:  Buyer can find aggressive competition from other buyers.  Critical to know what you are getting involved with the purchase.  A pre -foreclosure can be misleading.  Property could be priced higher than actual  worth to satisfy both homeowner (pay offs), and bank (recoup debt).  

The key is to work with an agent or broker who has distressed property experience.  Ask the right questions.  What happens if property is auctioned?  Do I have to buy with  all cash or will a lender offer a loan for distressed property? 

Foreclosured sales have a “laundry list” of problems or issues that a buyer must be aware of and prepared to absorb other costs.  Costly repairs, liens attached for property tax, association dues, legal fees to evict tenants/owners etc. can add up to substantial numbers. 

In general, this is blog post is only the tip of the iceburg in being a foreclosure pro.  If you have the reason to own a piece of paradise to live your dream, OK, get your feet wet.  In my opinion, it is the best time to own Hawaiian real estate.  Prices are down, mortgage rates very competitive, property taxes  lowered and the question remains, “Why not now?”

You say it is the time.  You need to do your research.   Go online to reputable websites to begin your step to buy real estatein the foreclosure marketplace.    Talk to people who have bought foreclosured properties.   Find the facts.  Get an agent with experience and a track record in closings in foreclosures and short sales.   Have your list of questions handy. 

Be prepared and ready to take advantage of real estate deals  in this current declining Hawaiian market.

Purchasing  foreclosures in paradise can be lengthy and time consuming process that’s full of red tape.  It is essential (mandatory) to understand the pros and cons of buying foreclosure before getting in over your head.

June 14, 2009

Has Big Island Real Estate Found The Bottom?

Filed under: Kohala "Gold" Coast — hisadmin @ 12:08 pm

I recently took some time off from blogging, so I could focus more on just making a living in Hawaii’s ever changing real estate industry. Sure, real estate agents often have plenty of time for blogging, social networking, and so on. However, I was getting a bit overwhelmed by all the negative media attention and armchair real estate analysis that places the downturn in Big Island real estate in the same category as Armageddon.

I often spend time with buyers who are looking for deals in foreclosures, short sales and distressed (need to sell) resale listings. Many see this time as a great opportunity to take advantage of the hardships of others. That said, there remains a great deal of vacillation and lack of commitment even among buyers in this category.

I have spent a great deal of time with individuals who say they are ready to own a “piece of paradise,” who have evidently done their homework and “understand” how much prices have dropped in this current buyer’s market. Yet, these same “lookers” continue to head back to the mainland, leaving me with, “We’re still thinking about it! Let us know when you reach the bottom!”

I maintain that this consumer doubt with the market bottom position remains the BIG question for so many hesitant buyers. Do I own now or should I wait a while longer until the bottom drops more?  My feeling is that, whether that buyer is seeking high or lower-end properties, the “bottom feeding mystery” looms over their heads. Nearly everyone wants to know when the Big Island real estate market will reach the bottom.

Cash buyers are one group that doesn’t seem to be so caught up in the hesitation game. These are the ones who can afford to capitalize on the present lower pricing and seller willingness to just “sell off.” I also have considered expert opinon from all sectors, and though I believe we are on the right path to economic recovery, it does appear that it will take some more time.

Yes, there is risk involved when making a decision to purchase real estate. Yes, we agents can work harder and smarter to assure our clients of the facts about what has sold, the economic trends, and types of products. We can be informed and ready to back up what is going on in our market.

A June 11 Pacific Business News article titled “Hawaii Ranks 15th in U. S. for Foreclosures, Sees Nearly 400% spike in May” states that Hawaii had 816 foreclosures in May; one filing for every 621 households: http://pacific.bizjournals.com/pacific/stories/2009/06/08/daily39.html. At the same time, a Friday June 5 article in Pacific Business News titled “Big Island Home and Condo Prices Fall” explains that median prices have dropped and the trend continues to follow previous predictions that real estate recovery in the state of Hawaii is estimated to show positive change in 4th quarter 2010.

I am positive that good times lie ahead. Life is good! I may not be able to predict when the bottom will be reached, but I do know that the Kohala Coast and the Mauna Lani Resort have many excellent buyer opportunities now. I also know that the agents at Coldwell Banker Maryl Realty are ready, willing and able to give the very best service and customer care all the time to our clients and associates.

Please send your comments and help us solve the never-ending question about the bottom of the Big Island real estate downturn.

January 24, 2009

Home Valuation Code of Conduct: Buyers Take Notice

Filed under: General,Real Estate Information — hisadmin @ 7:02 pm

The Federal Government is attempting to regulate appraisers and mortgage lenders in 2009. How will new regulations affect Big Island buyers? Clearly, there are big changes ahead for the appraisal and mortgage industries. Federal Housing Finance Agency (FHFA) Director James B. Lockhart has recently announced that Fannie Mae and Freddie Mac will implement a revised Home Valuation Code of Conduct (HVCC) effective May 1, 2009.

The code is primarily directed at regulating banks and other mortgage lenders and promoting appraisal independence. Mortgage brokers and realtors will no longer be allowed to choose appraisers. Instead, the appraisers will be chosen by the lenders. In the case of lenders’ in-house appraisals, the loan-origination departments will not be allowed to influence the valuation process in any way.

According to Christopher Palmeri of Business Week, “The appraisal industry has justifiably come under fire for its role in the great housing bust. Property appraisals, required by lenders before a loan is made, are supposed to provide an independent assessment of the home’s value. But during the boom, appraisers routinely signed off on a doubling or tripling of home values, sometimes racked up in just a matter of months. Investment properties were appraised at prices that made no investment sense.”http://www.businessweek.com/bwdaily/dnflash/content/jan2009/db20090118_003174.htm?chan=top+news_top+news+index+-+temp_news+%2B+analysis

Palmeri continues, “The new rules only apply to loans bought by or guaranteed by Fannie and Freddie. Lenders who operate independently of those channels do not have to follow them. But since Fannie and Freddie buy or guarantee a huge share of all U.S. mortgages, the changes should have wide application.”

Most professional appraisers strongly disapprove of the HVCC. They fear that the independent appraisers who have always depended on referrals from mortgage brokers will be forced out of business. They believe the HVCC will compel mortgage brokers and banks to hire a new appraisal workforce for independent appraisals, or to use the services of large appraisal management companies (AMCs).

AMCs are a dirty word in today’s appraisal industry. George Dodd, an appraiser based in Virginia, says “the most experienced appraisers (will be) the hardest hit” by the new code “because of our unwillingness to sacrifice integrity and quality by doing business” with management firms [AMCs]. Rather than work for peanuts, Dodd said, “I can flip burgers at McDs for more.” http://www.washingtonpost.com/wp-dyn/content/article/2009/01/09/AR2009010901920.html

AMCs are notorious for demanding that appraisers perform their work for half the usual fee, while at the same time charging lenders and borrowers more for the appraisal. This has a negative impact on the quality of the appraisal as individual appraisers might try to compensate for their lost income by performing a higher volume of appraisals.

Proponents of the HVCC believe that it will hold the appraisal industry to a higher standard and protect the appraisal process against inappropriate influence and coercion. They argue that the impact on appraisers will be minimal and positive. AMCs are mentioned several times throughout the HVCC, in that AMCs are prohibited from pressuring appraisers to reach pre-determined values.

The National Association of Mortgage Brokers and appraisers’ trade organizations have plans to appeal to Congress and Fannie and Freddie regulators to reverse certain aspects of the code, for instance, the code’s ban on broker selection of appraisers. Four of the five federal bank regulators have called for the withdrawal of the HVCC, stating that it could contribute to a greater incidence of inaccurate real estate appraisals and consumer credit problems.

How does all this affect mortgage borrowers? One commonly voiced concern against the HVCC is that the use of less experienced or non-local appraisers could arbitrarily deflate property values further, forcing buyers to come up with larger down payments, creating difficulties with refinancing, and ultimately leading to a higher risk for foreclosures or short-sale contracts. An overvalued appraisal can have severe consequences for a homeowner later on if they have to sell or decide to refinance, and then learn that they owe more for their property than it’s worth.

With the upcoming May legislation and regulations, what is the future? The US government will hold lenders, banks and appraisers in a tighter grip. Will the real estate buyer be more protected or less so? It will be interesting to see how this all unfolds. How do you see it?

January 14, 2009

David’s Big Island Real Estate, Humpback Whales and other Musings

Filed under: General,Humpback Whales — hisadmin @ 6:14 pm

The Big Island is beloved for its dramatic natural beauty, diverse eco-climate and rich culture and history. Yet, it remains the least discovered of all the Hawaiian Islands. Visitors and residents usually have their special favorites that include—splendid sunsets falling into the glorious Pacific Ocean; the pristine beaches, both public and “hidden,” along the Kona Coast; ubiquitous rainbows; the enchanting and mysterious Hawaii Volcanoes National Park; Mauna Kea’s Onizuka Visitor’s Center for some of the best stargazing in the world; viewing or hiking into the breathtaking valleys of Waipio, Waimanu and Pololu; the heavenly Hamakua Coast and sleepy Hilo town on the Windward side; swimming with wild spinner dolphins in Kealakekua Bay; the warm springs and black beaches of Puna; the historic City of Refuge (Pu`uhonua o Honaunau); and, the wide ranges and pastoral landscapes of Paniolo Country, just to name a few.

The humpback whales are at the top of my own “Appreciation List” for the Big Island. Whenever I am near the coastline during the months of their seasonal migration, my eyes are peeled for these colossal creatures. I never tire watching them blowing geysers and frolicking, flipping and splashing their tails with the utmost freedom and joy of expression. Communing with whales, even at a distance, is always a heartwarming experience because whales are intelligent beings with whom we share our very delicate and sacred planet. They often remind me to lighten up after an especially stressful day…oh yes, we have those in Paradise, too!

From October until May, the waters of Hawaii are visited by over 1000 humpback whales that have migrated to the warm waters of Hawaii from as far north as the Aleutian Islands of Alaska, as far east as Glacier Bay and as far south as the Farallon Islands off the coast of central California. These humpback whales come to the warm waters of Hawaii where they breed, calve and nurse their young.

This 3500-mile journey from their summer feeding areas takes between one and two months. It ensures that pregnant females and mothers with new-born calves spend the majority of their time in the relatively warm waters of Hawaii. Humpback calves are both conceived and born near the Hawaiian Islands. (The gestation period for the female is between 10-12 months.) http://animals.nationalgeographic.com/animals/mammals/humpback-whale.html

What is a Humpback Whale?

The humpback whale is the fifth largest of the world’s great whales. In 1781, a German naturalist named Borowski gave it the scientific name of Megaptera novaeangliae, which means “Big-Winged New Englander,” referring to the size of the whale’s huge tail fins and the fact that it was once widely sighted off the coast of New England. The more common English name of “humpback” appears to come from the animal’s tendency to round its back when diving.

The humpback whale is grayish-black, blue-black to dark black in color, with pale to white undersides that can show black markings that are varied according to the individual whale. It is with these markings, and particularly those found on the tail, that individual whales can be identified and the population and migratory patterns recorded. 

A humpback whale also has flippers (or pectoral fins) which are located on each side of its body. These flippers are used to turn and steer. Whales are mammals, and these fins are actually modified forelimbs with a bone structure similar to that of the human hand and arm.  

When born, calves weigh an average of 3000 pounds and range from 10-16 feet in length. They can grow to between 40-52 feet in length, with the females being slightly larger than the males. A fully grown humpback weighs approximately one ton per foot, or about 84,000 to 90,000 pounds, on average. Researchers believe humpbacks live between 40-60 years: http://www.imagequest3d.com/photos/humpbackwhale/index.htm

Why should we as realtors need to know more about the humpbacks? Well, factual knowledge is what our clients want! Along with real property, we sell the Hawaiian lifestyle to our clients—the sizzle that goes with the steak! Our clients often want to learn about our eco-systems and the cultural history of the islands, and the whales are one very important symbol and a favorite fixture of our marine landscape.

Realtors are the most trusted resource for real estate information. Especially during this market correction when some of us have a bit more free time than usual, we owe it to ourselves to become “expert” guides to Big Island living. You might want to go out and take a tour yourself: http://www.gohawaii.com/big_island

For those interested in taking a whale watching cruise, check out: http://www.tombarefoot.com/hawaii/whales_bigi.html

For me its balmy airs are always blowing, its summer seas flashing in the sun; the pulsing of its surf is in my ear; I can see its garlanded crags, its leaping cascades, its plumy palms drowsing by the shore, its remote summits floating like islands above the cloud-rack; I can feel the spirit of its woody solitudes, I hear the splashing of the brooks; in my nostrils still lives the breath of flowers that perished twenty years ago.
~Mark Twain, a Biography 

January 13, 2009

David Swanson 2009 Predictions: “Escrow or Bust!”

Filed under: Real Estate Information — hisadmin @ 9:53 am

Although everyone had high hopes that the 2008 U.S. housing market would have a soft landing, increased foreclosures and a meltdown of the residential mortgage market caused the housing sector to crash-land. Even worse, the residential mortgage crisis spread to all ownership categories, including our blessed Aloha State. The year 2008 proved to be a real roller-coaster ride for the Hawai’i real estate industry.

While the credit crunch and economic uncertainty have caused investor anxiety and tighter lending standards, the end result was nearly 30% fewer Hawaii real estate transactions than the previous year. Many potential buyers saw their investments evaporate in the global financial crisis, and buying decisions came to an abrupt halt. Many were scared to move forward. “Let’s wait and see what happens,” seemed to be the typical slogan of our prospects. Almost every active Hawai’i licensed real estate agent or broker has some story to share about deals gone bust. 

Some pundits theorize that we are in a buyer’s market under the current market conditions. Is it really a good time for buyers? The answer may be that only time will tell…but, if one of your clients is a consumer who is financially and emotionally ready, certain current conditions are favorable.

Many of our prospects are looking for the best deal. Some are still waiting for the bottom of the market to hit. Resale prices have been moderately moving downward, and buyers have more leverage and more options. After what can only be described as the toughest year for the American housing market in decades, the big question remains, “When does this all begin to turn around in our Hawaiian Islands?”

Hawai’i entered a recession in recent months that will stretch well into 2009, with only a weak recovery expected in 2010, according to the latest in a series of forecasts on the state’s economic outlook. The report released by University of Hawai’i Economic Research Organization is the most recent and gloomiest of economic prognoses published this week:

Carl Bonham, UHERO executive director, had this to say, “From the analysis we’ve done, Hawai’i's already in recession. We’re predicting that things are going to remain bad through the third quarter of next year.”

Moreover, individual forecasters vary in their opinions about how deep the downturn may be. For example, Bank of Hawaii’s forecast calls for visitor arrivals to decline by 0.2 percent next year. Their forecast suggests that a significant recovery won’t begin until 2010. The outlook includes:

· Visitor arrivals will fall by 10.8 percent this year. Hawai’i had 7.27 million visitors last year; each percentage point decline this year represents roughly 73,700 arrivals.

· The biggest decline in vacationers will occur among mainland tourists. UHERO said their visits will be off by 14.2 percent this year. Japan vacationers will be off by 9.8 percent.

Does this information lead to any conclusions or predictions about whether our current active licensed real estate agents and brokers on the Big Island can make a go of it? First, it might be helpful to assess how many active licensed agents are competing for the market share. I have heard many casual rumors that there are 20% fewer active licensed agents and brokers. The truth is perhaps slightly different:

Data from DCCA, REC 2008 Final Report, www.dcca.com/rec shows that the number of new licenses issued in FY 2008 decreased 9% over the prior fiscal year. During FY 2008, 1910 new licenses were issued. Individual broker licenses decreased by 21.1%; new salesperson licenses decreased by 6.9%; and new entity licenses decreased by 9.8%.The overall number of current real estate licenses increased 9.7% by the end of FY 2008. In FY 2008, active licenses increased 2% over last year, while inactive licenses increased 31.1%. There was an 8.9% increase of active licenses of Molokai and a 3.4% increase of active licenses on Oahu. On the islands of Hawaii and Kauai, there were minimal decreases in the number of active licenses.  

Do questions keep coming up at your brokerage office weekly sales meetings as to how you plan to survive and make a living selling real estate? The MLS Sales Statistics Report for the January start shows the entire island in all categories down 82.88% in number of sales, down 93.18% sales volume, and down 74.44% median sales prices.

Are we and our buyers waiting for January 20th for President-Elect Obama’s inauguration to spring-load the economy and drive the housing market out of the downturn?  Don’t take this the wrong way. I promote and envision a new optimism for all of us with the new Presidential administration. For now, I still wake up at night wondering what it will take to change the consumer’s thinking from, “Maybe I could be a buyer someday,”  to “Now really is the right time for me to own a piece of paradise.”

I believe in the power of positive thinking, a mental attitude that expects and thus helps to create good outcomes in all endeavors. The idea is that whatever the mind expects, it finds. My wife and I were discussing a way to creatively visualize buyers opening escrows. The acronym ESCROW came to me: Excellent Service Can Restore Our Wealth.” This mantra reminds me to stay focused on personal and professional self-improvement strategies that will allow me to give the best possible service to my clients.

Will 2009 be a year of “escrow or bust” for you? Please share your comments and thoughts about how to achieve success in a recession economy.

Attitude is a little thing that makes a big difference

~Winston Churchill

January 10, 2009

Mauna Lani Resort-Maybe Some Things You Didn’t Know?

Filed under: Updates — hisadmin @ 4:46 pm

I am writing my first, and God forbid, not my last blog. As any beginner, I am excited and also have mixed emotions, as I am anxious to get off on the right foot. I’ve been reading and commenting on blogs for years, but now my head’s the one on the chopping block.

That being said, I wanted to get my feet wet by sharing some factual data that you may or may not know about the Mauna Lani Bay Resort.  It’s always good to refresh one’s memory with useful information to impart to clients, friends, and family members.  As licensed agents, we usually have a great deal of knowledge to offer.  So here goes.

The Mauna Lani Resort sits oceanfront on the finest stretch of shoreline on the Kohala Coast of the Big Island of Hawai’i. Located 23 miles north of the Kona International Airport, this oceanfront resort features the luxurious Mauna Lani Bay Hotel & Bungalows, Mauna Lani Spa and the Francis H. I’i Brown Golf Courses. www.maunalani.com

Here are a few interesting tidbits that reflect why Mauna Lani Bay Resort stands way above most resort destination properties? Pay attention, as this information just may help you win your next game of Hawaiian Trivial Pursuit:

  • CONDÉ NAST TRAVELER Gold List, Best Places in the World to Stay: Mauna Lani Bay Hotel and Bungalows is ranked in the Top 10 in Hawaii and #2 on the Big Island of Hawaii, Jan 2009.
  • 2009 TRAVEL + LEISURE – The World’s Best Hotels Mauna Lani Bay Hotel and Bungalows is ranked #2 on the Big Island and #8 in Hawaii by Travel + Leisure magazine’s T + L 500 List, Jan 2009.
  • 2009 GOLF WORLD TOP 50 and 2009 Reader’s Choice Award: Golf World unveils its first “Best Golf Facilities in the Country.”

Mauna Lani Bay Resort has been named one of the”World’s Top Earth Friendly Getaways” by Conde Nast Traveler magazine and is the only beach resort in the United States named in the collection.  Mauna Lani’s solar energy innovations have earned the resort the distinction of generating the most solar electric power of any luxury resort in the world. Go green!

Did you know that the golf water system for Mauna Lani Resort’s Francis H. I’i Brown Golf Courses pumps more than 3 million gallons of brackish water per day and waters 38 golf holes? During peak hours ,a large amount of the electricity required by the golf operation is provided by solar power. These solar systems spare the environment from thousands of tons of harmful emissions (NOx, SOx and CO2).

Condé Nast Traveler also recognized Mauna Lani Resort’s green sea turtle program as an eco-tourism attraction. Since 1989, in collaboration with Oahu’s Sea Life Park by Dolphin Discovery, Mauna Lani Resort has raised juvenile honus (turtles) in its saltwater ponds until they are large enough to be released in the wild.

Mauna Lani was also the recipient of the Green Business Award from the Chamber of Commerce of Hawaii, the Hawaii Hotel Association, the Hawaii Department of Business Economic Development and Tourism, and the Hawaii Department of Health. The resort also won the Keep It Hawaii Kahili Award for their Kalahuipua‘a Fishponds in the category of Historic Preservation.

Well, there you have it; enough news to keep your brains working.  I have noticed that buyers do want to know why one resort property is better than another. For instance, Mauna Kea Resort has been getting much of the news  releases  lately with their December 2008 soft reopening after renovations for damages from the October 2006 earthquake: http://www.sfgate.com/cgi-bin/blogs/hawaii/detail?&entry_id=33536

Final thoughts: Many opinions and emotions exist about 2009 real estate futures in Hawaii and on the mainland.  The state of the economy is forcing most novice investors out of the market due to the perceived dangers.  Savvy investors are picking up properties which they want to own for the long term.  During any recession, the key to investing is managing risk. Warren Buffet lives by his words, “Be fearful when people are greedy and greedy when people are fearful.” Stay tuned for David’s 2009 Big Island Predictions in my next post, “Escrow or Bust”!

Thanks for your interest. Comments are welcome!



January 9, 2009

Aloha from David in Paradise….

Filed under: Updates — hisadmin @ 5:26 pm

Aloha and welcome to my new blog, part of the Aloha Living Blog Network. I am very excited to be blogging for my first leap into the blog world.  I trust you too will look forward to my sharing with you both a professional and personal perspective on real estate on the Kohala Coast on the Big Island.  

April 25, 2008

Adjusting to a Buyer’s Market

Filed under: Updates — hisadmin @ 1:56 pm

If you are contemplating Buying or Selling property in today’s Big Island resort market, there are some things you need to consider. First of all, you need to acknowledge that it is a Buyer’s market. In some segments of the market, the prices have moved downward significantly and in other segments the prices are holding steady or down slightly. So, it can be a little bit confusing. What really makes this a Buyer’s market is the financing situation. Lenders are under extreme scrutiny and only the most qualified prospects can even get a loan. Also, only the most properly priced properties will qualify for a loan – the appraisal will be put under the microscope (maybe more than once) before the lender will agree to release funds. Factor in a Buyer’s natural desire for a “deal” and a Seller’s natural desire for maximum cash out of her property and you have a formula for fireworks or frustration – maybe both! So here are some suggestions for your consideration.

Mr. Seller, if you don’t have to sell right now, don’t! One of the contributing factors to the Buyer’s market is an excess of inventory.

Ms. Seller, if you need to sell now, price it right from the get-go! Depending on what you own and when you bought it, this might entail a significant loss. However, you will only be asking for frustration if you try to “test” the market by pricing high and hoping to negotiate after you have an offer. You won’t get any offers. All you will get is ignored. As an example, at one of the resorts there is a 15 month supply of two bedroom condos listed for sale. At another resort, there is nearly a two and a half year supply of two bedroom condos listed. With this kind of excess inventory, the Buyer’s inclination will be to start looking at the bottom of the price range for his purchase. And, if you were buying instead of selling, you’d do the same thing! So, take your medicine and price it right!

Mr. Seller don’t think your exquisite furnishings make your property worth more than a similar one with less appealing furniture. In the best, hottest, most spectacular Seller’s market the lenders are not keen on doing a 30 year loan on furniture of any kind. In this market, if the lender suspects that furniture plays a role in the agreed sales price, it is likely to discount the requested loan amount or deny the loan entirely.

Ms. Seller, when picking an agent to represent you, if the agent is telling you things that you don’t want to hear, you probably should choose her. She’s being honest and, most likely knows what she is talking about. Only the most realistic Sellers are able to sell their properties in today’s market.

Mr. Buyer, if you think the market hasn’t “bottomed out” yet, don’t even begin looking for property. If you are right, you’ll have saved yourself and your prospective agent a lot of time. If you are wrong, you’ll know soon enough!

Ms. Buyer, please be realistic in your expectations. If the property you are interested in is priced at what a similar property sold for recently, it is unlikely that you will pay significantly less than the previous sales price. Bear in mind that you can pay full price and still get a great value in today’s market, if the property is priced right.

Mr. Buyer, trust your agent. He knows you are afraid of paying too much for your property. He knows the market and where to get the best value in your price range.

Ms. Buyer, if you’re not confident in your agent’s opinion, you can still relax. Your lender won’t let you pay to much for a property today! If you inadvertently offer more than a property is worth, there are exactly three chances of the appraisal coming in at the agreed price – they are slim chance, fat chance and no chance!

That’s all for today. As always, your comments/observations are welcome!

Robert D. “Bob” Hudspeth R(S)
Coldwell Banker Maryl Realty at The Shops at Mauna Lani
(808) 989-1958 Cellular

March 15, 2008

Fractional(e) Rationale

Filed under: Updates — hisadmin @ 12:02 pm

I want to thank Mike and Rick for giving me the rationale for writing this post. Their comments bring up some interesting points. Fractional ownership is a shared ownership situation that is delineated by a time period or season of the year. A typical fractional ownership would be for a two month block of time. The price is determined by the time of year. For instance, the Christmas season anywhere or ski season in Vail would command a premium price.

I’ll start by answering Mike’s question. No, at this time, there is nothing in the resort documents that prevents fractional ownership. Time-share – fractional’s kissin’ cousin – is, however, forbidden. Vacation clubs are also permitted in the resort but individual communities within the resort are free to permit or forbid their presence and they have. More on this later.

Rick is correct to bring up the Advantage Program because it is pertinent when discussing fractional ownership. First of all, Advantage Program participation is limited to owners that have at least a one third interest in a property. So, three equal owners of a property could all participate in the Advantage Program. You must produce a deed to prove your percentage of ownership and thus qualify for participation in the program. Now, here is where it gets tricky. Each of the three “owners” above could be a partnership – partnerships, businesses, trusts and individuals can all be owners – and each qualified ownership interest can have five individuals participating in the Advantage Program. It is therefore conceivable that as many as 15 people could qualify for participation in the program from ownership interest in one property. Please note that this precludes members in a vacation club because the ownership isn’t structured that way.

I’m pretty sure that Mauna Lani Resort does not limit the number of owners for a property. For instance, twelve entities could be on a deed with one entity having a one third interest and the other eleven having each having approximately a six percent interest. All would be owners but only one could participate (five individuals max) in the Advantage Program. This is probably a big deal to a fractional owner. As I understand it, unlike the usual multiple ownership where all parties and their percentages of interest appear on one deed, fractional ownership involves multiple deeds. Each of these deeds is transferrable so one fractional owner can sell his interest without consultation with or permission of the other owners. So let’s pretend that we have a situation where six families have each purchased a two month interest in a property. Each family would have a one sixth interest and none would qualify for the Advantage Program. Please note that, in this example, even if all of the owners were on one deed none of them would be able to participate because none would have the required one third interest. Now, suppose that two of the families, each with two children, decide to combine their ownership in a way that would give them a one third interest and thus qualify them for participation in the program, three of the family members would be left out because only five persons from each ownership entity can participate.

I have some other thoughts on fractional ownership but those will have to wait for another day. I’ll close by encouraging you to consult the Advantage Program administrators before structuring your ownership. Then, go out and enjoy this fabulous resort!

Robert D. “Bob” Hudspeth R(S)
Coldwell Banker Maryl Realty at The Shops at Mauna Lani
(808) 989-1958 Cell

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