Mikie Likes It!

Not to be confused with “If can, can. If no-can, no-can”, the laid-back pidgin saying which basically means if you can do it okay, and if not, well that’s okay too.

The ConCon is a constitutional convention and Hawaii hasn’t had one in 30 years, way overdue IMHO. The ConCon allows us to amend the State Constitution. Delegates are elected from all the islands to review and revisit the laws and make improvements and changes to our state government addressing things that never seem to get done by our legislature.

The short story is the that local and national teachers’ unions as well as the sitting majority in the State Legislature are all against a ConCon. Any time you have big money from outside paying for ads against something you probably want to look closer and see what they are fighting so hard to protect. I’ll tell you in 2 words:

“turf and power!”

Some of what proponents of a ConCon would like to do it is decentralize the Dept of Education. One DOE and BOE for the entire state located in Honolulu and totally Oahu-centric is simply out-dated. It’s inefficient and our schools and the kids pay the price.

And what about term limits for judges? HOW ABOUT TERM LIMITS FOR EVERYONE??? (would be my suggestion after watching our Congress perform so brilliantly of late), or balanced budget initiatives, there’s a concept, huh? And what about protecting our environment and agricultural lands? The point is, if we have a ConCon we get to decide what issues are important, if not, the legislators get to decide and we see where that’s taken us over the past 30 years!

And the ConCon vote which was mandated every decade to give the people a vote is rigged against us anyway. When it last came to a vote in 1996, it passed. There were more “yes” votes than “no” votes. So what did they do? They changed the rules. They got our corrupt State Supreme Court to strike down the people’s choice by declaring that any blank votes would be counted as “no” votes.  Well that sort of takes away any reason to vote doesn’t it? But it happens here in Hawaii and they get away with it.

Can you believe it? I couldn’t then and I’M STILL AMAZED THAT THE BLANK VOTE BULL-CRAP (sorry, there is no other way to say it) still stands. In fact that ruling carried over to all ballot initiatives since, and if you think it’s hard to inject change into this “old boy” system you are RIGHT!

 So I say, let’s have a ConCon and see what the people want for a change.

Aloha, “Mikie”

Mikie Likes It LLC
Realtor Referrals & Mortgage Freedom

Waikoloa, Hawaii
Phone: (808) 896-1943
eMail: Mike@MikeSells.com
website: MikeSells.com

Realtors love it -people who revolve through Hawaii. After all, this coming and going creates business - when they arrive and then if we’re lucky (and we’ve done a good job), when they vamoose. The business that keeps on giving!

When they’re gearing up for it, moving here is the biggest thing on their minds occupying every waking hour fantisizing, packing and celebrating. THEY CAN’T WAIT - THEY’RE MOVING TO HAWAII!

I don’t know what it is, but I have witnessed it enough over the years to know it’s a real phenom. When I was in college at UH Manoa I saw it all the time, though then it was more boyfriend-girlfriend stuff or not being able to get the right job, but I have seen it repeated over and over. The crux of it I think is poor planning. One lady I knew arrived a week before her job started without a place to even hang her hat, not to mention an entire house of furniture on the way -mainland style stuff at that, and over 500 books in cardboard boxes!

Unfortunately, this person ended up being a tenant of ours. On our very first meeting she begged me for a 3-year lease. Don’t worry, I didn’t just fall off the turnip truck.

“We may not even like each other after 6 months, so there’s no way we’re doing a 3-year lease!”

And now barely a year later, she’s gone -whoosh, like a cool breeze. Here today, gone to Maui. No actually it was back to Colorado. And people get a very different idea of the Big Island when they’re here on vacation. I used to say in response to their “Oh we’ve been coming every year for the last 15 years”.

“Yes, so you’ve bought the place by now, you just don’t own it!”.

Living here, dealing with getting your kids in school, coping with no car washes -OMG, no garbage pick-up or home mail delivery in many places, etc., etc., is quite a different animal and Hawaii is not for everyone!

So what’s a person to do? Well, especially now with the added expense of getting here, not to mention shipping your stuff, you’ve got to take it seriously, plan better and come with the idea that it’s an adventure. Look upon it as an opportunity to raise your kids in a safer, more wholesome environment where you have unspoiled beauty every place you look. Take advantage of our beautiful beaches, and jump right into our mix of different cultures, languages, people and food. Realize no place is perfect and if you think you’re able to run from your problems, think again. Do your home work and, yes even though I make my living selling houses, I say be willing to rent for a while first to get acqainted with the different areas, climates and weather conditions around the island-before you plunge right in. After all, we all want happy clients and neighbors!

That’s my Tip of the Day!

Aloha, “Mikie”

Mikie Likes It LLC
Realtor Referrals & Mortgage Freedom

Waikoloa, Hawaii
Phone: (808) 896-1943
eMail: Mike@MikeSells.com
website: MikeSells.com

FICO, ever wonder what that means? I know many of us have heard it bandied about; “fico score, this and fico score that” but what the heck is it?

Like many things, the abbreviation became the word. FICO stands for Fair Issac Corporation and a FICO score according to our friend Wikipedia, is a number that represents the credit worthiness of a borrower.

Engineer Bill Fair and mathematician Earl Isaac founded Fair Isaac Corporation in 1956— with an initial investment of $400 each — on the principle that data, used intelligently, can improve business decisions.  (I’ll bet a few sub-prime lenders of late wished they had adhered more stringently to the used intelligently part of that principle).

According to Dian Hymer, a Realtor in the San Francisco Bay Area, syndicated columnist and a fellow CRS (Certified Residential Specialist) the credit score from Fair Issac uses 5 types of information to calculate a credit score.

1. Payment History (that’s why you don’t want to be late!)
2. Amounts Owed (are you tapped out yet?)
3. Length of Credit History (at least a couple years shows stability)
4. New Credit (please don’t buy a car just before you want a mortgage!)
5. Types of Credit in Use (credit cards, other mortgages, personal loans)

Credit scores which were ignored or carried less weight in the past area more critical today in determining who will get a loan and who will be denied, so if your credit is a-hurtin’ you may want to seek advise from a mortgage broker, your local credit union or your banker and see what you can do to improve that ever-important FICO!

That’s my Tip of the Day!

Aloha, “Mikie”

Mikie Likes It LLC
Realtor Referrals & Mortgage Freedom

Waikoloa, Hawaii
Phone: (808) 896-1943
eMail: Mike@MikeSells.com
website: MikeSells.com

I was feeling a little bad when a friend asked me the other day one of those “If it were you” kind of questions. His house has been on the market for awhile (haven’t they all?) and he knows I’m in the business, but it’s not my listing so he figures he’ll get the straight scoop from me. Of course, if he were my client he’d especially get the real deal 411 from me. They don’t always like what I tell ‘em but I give it to ‘em anyway.

But what he wanted to know about was lease options as a vehicle to get his house sold, having tried everything else. By everything else I mean he’s taken it off the market for awhile, he has lowered the price some, he had his Realtor tweak the wording in MLS (hey, it’s 1.552 acres, not 1.5!), he even considered doing the Wall Street Journal bit -you know for those rich people wanting a 2nd home in Hawaii, etc. So he figures maybe a lease option would allow someone who is having trouble getting a mortgage, buy his house.

“DO YOU KNOW HOW A LEASE-OPTION WORKS?”

“Well no not really”, he says (that’s a future blog), so I give him the run-down. But in the end I tell him IT’S ALL ABOUT PRICE, and more than a little patience until buyers come back. And if you don’t believe it just go check out Ruth’s Chris Steak House.

We went to The Shops at Mauna Lani last night to our local RCSH with our friends Carmine & Judy for the 3-course ‘Prime Time Dinner Menu’ which includes salad, an entree choice, a side dish selection and dessert starting at $39.95! Oh yeah, I forgot to mention, THE PLACE WAS PACKED!

As anyone on the Big Island can tell you, if the restaurants aren’t offering some pretty sweet deals right now, customers are staying home or going where the deals are. Real Estate is no different.

That’s my Tip of the Day!

Aloha, “Mikie”

Mikie Likes It LLC
Realtor Referrals & Mortgage Freedom

Waikoloa, Hawaii
Phone: (808) 896-1943
eMail: Mike@MikeSells.com
website: MikeSells.com

I’ve had an over-dose of continuing education classes lately -like 3 in the last two weeks! The CE classes are required for our license renewals which otherwise expire every other year on Dec. 31st. You have two years to take the 10 hours of reqired courses -approved by the National Association of Realtors (NAR). In addition to the ten hours for license renewal every NAR member licensed before 2005 has to take a class on ethics and I admit going in there with a bad attitude;

“I had to drive all the way to Kona for a class in ethics! Why do I have to sit through this stuff? It’s so boring”, etc.

If you’ve been blessed with teenage children, you’ve no doubt heard this refrain, but down deep, I honestly felt put upon because I had the attitude that you can’t teach someone ethics -you either got ‘em or you don’t. I even took a magazine with me to better occupy myself should it get really dry, but I have to admit I was drawn in and then scared to death hearing all the ways I had probably inadvertantly breached our Realtor Code of Ethics without even knowing it!

Did you know that REALTORS are issued pocket IDs which are required to be kept in our possession at all times? It’s true. And yes, I may have been guilty there (gasp, gasp) a time or two, and while that resides on the silly end of the ethics spectrum, by and large these rules and guidelines are there to protect the public, so they are a good idea.

For example, speaking to a walk-in at an Open House, where you are the Seller’s agent and an unaccompanied buyer-prospect comes in the door. Almost as soon as that prospect begins to ask you questions about the house or more particularly about the Sellers, like Gee why are they selling? or Have they had any offers yet? or maybe even, How much will they take?, you are bound by the COE to immediately acertain if that prospect is working with an agent and to let them know you represent the Sellers exclusively. You have to be extremely careful of the Seller’s private information and you can never reveal even the most simple fact like, “they are getting a divorce and have to sell”.

NAR tries to make the public aware that they have a right to expect ethical behavior from its members. In fact, our Purchase Contract says right at the top:

“Buyer and Seller are aware that the National Association of REALTORS holds its members accountable for their actions through a strict Professional Code of Ethics which includes a grievance system to address complaints. Non-members are not held to the same standards, nor are they required to participate in the grievance system.”

So as card-carrying (I’ll try to do better, I promise) members of the NAR, we REALTORS need to always hold our clients best interests at heart and before our own, and as consumers you need to be sure you use REALTORS, not just real estate agents, in your real estate dealings and you need to HOLD OUR FEET TO THE FIRE!

That’s my Tip of the Day!

Aloha, “Mikie” Mikie Likes It LLC
Realtor Referrals & Mortgage Freedom  Waikoloa, Hawaii
Phone: (808) 896-1943
eMail: Mike@MikeSells.com
website: MikeSells.com

After attending the Mayoral forum Thursday night sponsored by the Waikoloa Lions Club, I have a prediction as to who our next Mayor is gonna be -Billy Kenoi. Note -he is not my choice, but he is who I believe it will be.

Why do I say that? He’s a glib, articulate, nice looking, local boy made good (went to college on the East Coast, then went on to graduate from the Richardson Law School at UH), and he moves quite easily between “SHAKA-KINE LOCAL BOY” and East Coast educated island kid returned home from Oahu after graduating from law school with a few years work under his belt.

Here’s a line he used to describe his law school aspirations which I liked:

“When I told people I wanted to become a lawyer, they told me, ‘hey you goin’ need one lawyer- not BE one!’ “

He is quick on his feet and I can see where he will appeal to a lot of people who may not look much further. The big thing I don’t like is his pledge to carry on where Harry Kim leaves off. Let me tell you after 8 years of Harry, who did nothing for the West side of the Island, that’s the last thing we need!

That’s my Tip of the Day and I’m sticking to it!

Aloha, “Mikie”

Mikie Likes It LLC
Realtor Referrals & Mortgage Freedom

Waikoloa, Hawaii
Phone: (808) 896-1943
eMail: Mike@MikeSells.com
website: MikeSells.com

Let’s start with the fact that Earl E. Bakken is known as a POWER PLAYER and the man who literally created the medical technology industry when he co-founded Medtronic, Inc., after developing the first wearable, external, battery-powered, transistorized pacemaker in 1957.

In my opinion, this new employee (as in the just appointed Ceo!) of North Hawaii Community Hospital has quite simply -stepped in it. AND NOW SOMEBODY NEEDS TO CLEAN IT UP!

He’s miffed a lot of people, cut positions and programs including Dr. Bakken’s pet project, the Hawaii Heart Brain Center and quite possibly worst of all, just plain alienated Dr. Earl Bakken, a longtime supporter of North Hawaii Community Hospital. According to this morning’s paper, Bakken has severed all ties with the Hospital as of yesterday. He has decided no longer to be involved with the hospital’s management or its board of directors. Ya think he’s just a little upset?

Waimea in particular, Where Dr. Bakken has chosen to retire and the Big Island in general is VERY, VERY, VERY lucky to have him in our midst. According to the Medical Institute for Biologic Engineering,

“In retirement, Bakken has headed the Board of Directors of the Five Mountain Medical Community (now known as Five Mountains—Hawaii) in the development of the North Hawaii Community Hospital; Tutu’s House, a Community Resource Center; Jobs and Careers; Education Incentives; Care Reimbursement; and Measurement of Health Outcomes, in order to improve the health of the people of Northwest Hawaii and to serve as a 21st-century healthcare model for the world.”

He’s a living legend in medical and humanitarian circles anywhere you go - in the world. One tiny example, I was visiting my mother in California last year and went with her on an appointment to have her pacemaker checked and recalibrated. The nurse or medical technologist (I plead ignorance in not knowing which) introduced herself as being “from Medtronic in Minnesota”. Well, being from Waimea and very familiar with some of Dr. Bakken’s numerous achievements I asked her if she knew Earl Bakken. Well, I’ll tell you, her eyes lit up and her face broke into the biggest display of admiration I have seen in a long, long time and she said, “No, but I’d sure love meet him. He does come back to Minnesota frequently and really special employees are sometimes rewarded with trips to Hawaii to see what he’s involved in on the Big Island.” She went on to say that she hoped to make that milestone someday in her career.

All I can say is,

“There’s gonna be “Trouble in River City”

Maybe Mr. Comer should have built a few bridges, made a few friends, learned a little local history before he did what he did. Stay tuned to see where these chips will fall, but I bet there are more than a few of the hoy paloy of the hospital ranks and the board who may be mending fences this holiday weekend!

That’s my Tip of the Day and I’m sticking to it!

Aloha, “Mikie”

Mikie Likes It LLC
Realtor Referrals & Mortgage Freedom

Waikoloa, Hawaii
Phone: (808) 896-1943
eMail: Mike@MikeSells.com
website: MikeSells.com

In their infinite wisdom, our legislature will consider on a final vote today, a new law that would make it illegal for a child to be left alone in a car for 5 minutes or more. Now don’t you feel better? They care.

How are you going to enforce that? Let’s see you could install secret cameras at shopping center parking lots, but what about the miscreants who have been known to pull up to their favorite watering hole and leave an infant in the car while they knock back a few? You didn’t forget about the law already in effect making it illegal for anyone under age 12 to ride in the back of a pick-up did you? As if a flying projectile (age 12 or older) eminating from pick-up truck in a highway mishap is somehow less precious than say a five-year old meeting the lava head on.

YOU JUST CANNOT LEGISLATE COMMON SENSE and the sooner our lawmakers realize that the better for all of us. They might actually be able to spend time on real issues like affordable housing, how to deal with the fallout of Aloha Airlines going under or how to support local farmers and producers of food on our islands as it gets more and more costly to import our daily necessities.

You know our local newspaper, West Hawaii Today just got reduced by an inch in width due to the rising cost of newsprint and the continually escalating cost of shipping it here. Now if the legislature would pick up on that mentality (less is better) they could shorten the session each year, thereby producing fewer stupid laws that they don’t enforce anyway and just possibly try to enforce a few of the good laws and regulations on the books. I know I’d feel better about paying my taxes, wouldn’t you?

That’s my Tip of the Day and I’m sticking to it!

Aloha, Mike
RE/MAX Pacific

My “Sell” Phone: 808-896-1943
MikeSells.com
WestHawaiiBlog.com
Mike@MikeSells.com

Call it what you like, but I wish it would stop! I don’t know anyone, other than tourists or those benefiting from the tourism generated by the volcanic activity on the Big Island, that isn’t more than ready to see it go away, as in cease and desist!

Don’t get me wrong, I don’t fault anyone for being attracted to the volcano. It’s an absolutely phenomenal opportunity to view a most exciting display of nature, as live and up close as you’ll ever be.

I once had the chance to see Mauna Loa and Kilauea erupting at the same time back in 1984. TWO HAWAII VOLCANOES ERUPTING SIMULTANEOUSLY! From the Volcano Observatory turning southeast you could see clouds lit up by the Kilauea eruption downslope. Turn west, and you could make out the curtain of 160-foot lava fountains upslope on Mauna Loa.

From Kamuela of course we could only see Mauna Loa, but we could see it right from our front yard! We were awakened by a vicious, incessant pounding on our door at 3 AM. It was our closest neighbor at the door, jumping out of her skin,

“Look over there, Mauna Loa is erupting!”

“Holy Cattle” (this is not what I actually said, but the censored version . . . ;o) . . . . and it was erupting just as big as you can imagine -no, BIGGER than you can imagine. We got in the car and drove up the saddle road to get as close as we could, but there had already been several fender-benders as a result of people watching Madame Pele instead of the road, so it was blocked off. Okay, onto plan B- up the Kohala Mountain Road we went. It wasn’t as close to the heat, no pun intended but we figured with the elevation we could get a good vantage point, and we did. It was pretty spactacular.

Anyway now some 24 years since the last activity at Halemaumau Crater we are experiencing huge, sulfurous plumes of smoke and ash. This eruption shown is from the 1924 eruption at Halemaumau Crater.

The ash output is measured in CUBIC FEET if that tells you anything. From the first of the most recent volcanic explosions that occured on March 19th, the scientists label it a tiny volume, less than 350,000 cubic feet of ash when compared to say, Mount St. Helens, but none the less, the sulfuric dioxide level is measured in TONS and has been high enough (2,000 tons) at some points since the March 19th explosion to warrant evacuations of the Hawaii Volcanoes National Park and nearby communities such as Hawaiian Ocean View Estates.

Is it likely to stop anytime soon? That’s the big question, but as the paper recently noted in the Volcano Watch, column,

“A human lifespan is but a blink of an eye compared to Kiluaea’s 300,000 to 600,000 years of existence”

so not very dang likely. So get upwind of it and pray for trade winds!

That’s my Tip of the Day and I’m sticking to it!

Aloha, Mike
RE/MAX Pacific

On Island: 885-5557
Toll Free: 800-500-4895
My “Sell” Phone: 808-896-1943
MikeSells.com
WestHawaiiBlog.com
Mike@MikeSells.com

The mantra ‘Grown here, not flown here’ could have easily been started on the Big Island by the late Tony Taniguchi, President of KTA Super Stores in the early ’80s. Tony and Derek Kirisu, then Executive Vice President of the local supermarket chain wanted to promote and market local farmers and their products to juice the economy in the post-sugar days when the Big Island took a severe hit.

THE MOUNTAIN APPLE BRAND WAS BORN and today boasts over 300 products all from island farmers, ranchers and entrepreneurs. Some of them (that’s a separate blog post by itself which I promise to do later) were featured recently in the Hawaii Island Journal and I was surprised and pleased to see so many I know and support!

And you know what? With all the food recalls happening I want to know where my food comes from, where it was grown or produced and who the farmers are. The great thing about the Big Island is you can do that. In fact, you probably brush shoulders with some of the local farmers and growers at the post office, Saturday morning soccer or at your kids’ school plays -you know right here in the community.

Here’s a little test for you. Try asking your children (young ones) and their friends what vegetable french fries come from. It’s shocking, and a lot of kids don’t know carrots are pulled from the ground. With the mass-produced agri-business conglomerates, there is a huge dis-connect between where our food comes from, what was sprayed on it or done to it and where it goes (or is stored) before it reaches our tables.

I was shocked to read that THERE WERE 21 BEEF RECALLS ALONE IN 2007 -that’s almost two a month! Our own State Dept. of Education in Honolulu recently had to deal with the disposal of 266,000 pounds of the recalled ground beef in the most recent fiasco. And it’s going to the landfill! P-U is all I can say. YOU LET YOUR KIDS BUY SCHOOL LUNCHES??

Just yesterday morning the West Hawaii Today reported food costs world-wide have jumped 17%. And it’s going to get worse before it gets better. There are many reasons: All time high oil prices, sky rocketing shipping and transportation costs due to high oil prices, electricity increases due to high oil prices, increased demand from the emerging economies of China and India in particular, and massive diversion of corn crops to produce Ethanol-just to name a few as shown in these huge Ethanol storage bins.

So what can you do? Well, being aware of the problem is a big start, and educate your kids. They seem a lot more open to new ideas (imagine that?) than many adults. You can also buy local (everything, not just food) whenever you can. Grow as much as you can. I live in a condo but I’ve got lettuce, arugula, chives and basil growing that I use every day. Patronize local farmers markets, encourage your grocery store’s produce manager to buy local. IF YOU REALLY WANT TO STEP BACK FROM BEING A HUGE CONSUMER OF OIL, STOP EATING MEAT! Production of meat takes grain crops from the human food supply, consumes more oil (and water) than you can imagine by the time you consider the energy it takes to plant, harvest, produce and then transport and refrigerate it. But of course we love our steaks, Moo. The point is there are ways to conserve and reduce our consumption and we just need to starting doing it!

That’s my Tip of the Day and I’m sticking to it!

Aloha, Mike
RE/MAX Pacific

On Island: 885-5557
Toll Free: 800-500-4895
My “Sell” Phone: 808-896-1943
MikeSells.com
WestHawaiiBlog.com
Mike@MikeSells.com

It’s hard to tell sometimes when you get a really stupid offer whether it’s the buyer’s agent putting them up to all this nonsense, or did the buyer come up with it on their own?

If it’s an inexperienced agent, I almost always assume it’s the agent, but as agents for our clients, we’re more or less bound to do what our clients want us to do. But this is where the experience should come into play. When a buyer wants us to do something really off the wall (I’m not talking just price; it’s price, it’s terms, it’s flaky financing not likely to pass muster with today’s lenders, it’s CRAZY CONTINGENCIES, it’s the furniture never intended to be included in the sale, it’s countless unreasonable demands on the seller), well then it is our job to yank the reins a bit.

HOLY CATTLE - IT’S NOT LIKE THE SELLERS AREN’T ALREADY GETTING BEAT UP.

Everyone has heard that if you low-ball an offer on a property you intend to buy, just testing the water, you are very likely to insult the sellers and often end up paying more for the property than you would have otherwise. Unfortunatley, I am witnessing too many irresponsible or inexperienced agents with more time than good sense on their hands, who are all too willing to write and present these STUPID offers.

That’s it. That’s all I wanted to say and I can just hear my mother saying,

“An intellegent person would be more creative with their vocabulary”

in describing these offers as STUPID, but to me that word perfectly describes what I have been witnessing too often lately. Just don’t be stupid, okay? Or at least call me before you write the offer. I may be able to save you some time!

That’s my Tip of the Day and I’m sticking to it!

Aloha, Mike
RE/MAX Pacific

On Island: 885-5557
Toll Free: 800-500-4895
My “Sell” Phone: 808-896-1943
MikeSells.com
WestHawaiiBlog.com
Mike@MikeSells.com

Okay, yes it is a buyers market, but it’s not just about price any more. I have clients who I believe are genuine buyers, but so far I am struggling to get them real on what an offer should look like to be acceptable. Most deals going into escrow today are a result of the seller finally getting the picture on price. To be in the enviable position of in escrow, sellers have undoubtedly gone through the process of adjusting the price, painfully and incrementally so, but never the less they somehow finally got the message that “right pricing” is the only way to attract an interested buyer in this market.

But to be fair to the beleaguered sellers many buyers today are just too cocky. With the reality in the ever morphing world of financing REALLY, ONLY A CASH BUYER HAS A RIGHT TO BE SO SURE OF HERSELF.

The mortgage rules of underwriting are quite literally changing daily. First to fall as they should have, were the no-doc, no-job, no-asset so called liar loans. But even for a good qualified borrower, in the old days of mortgage financing (as in less than a year ago) the underwriting process was realistically just a ceremonial last hurdle before funding. I mean they might come back and ask for one final pay stub, verify that you were still employed and do a final lien check just prior to unleashing the cash, but my oh my, that’s all history now. Underwriters today hold the trump card and the whole game is over at their whim.

I wrote an offer 2 days ago with the additional clause stating the buyer was “pre-approved” and I added boastfully, had already been cleared with a glowing credit check! But that didn’t impress the seller’s agent one bit and I knew why. Pre-approval is nice, but it doesn’t carry too much weight unless and until the buyer survives the underwriting gauntlet. I have had deals stopped in their tracts even after final written loan approval, the day before the buyers were supposed to sign closing documents, due to a new condition the underwriters came up with. And that condition was the ultimate show stopper. It killed the deal.

How can a seller possibly plan for that? They almost have to include a clause that possession will take place two weeks after closing -to cover themselves in the event that it doesn’t close. Otherwise they’ve arranged and/or paid for the final cleaning, transferred utilities, contracted movers, etc., etc., all for naught if they get snagged by changing rules based on which of the world’s biggest, strongest, widest reaching investment houses just missed going under, save for the largess of the federal government at the taxpayers expense, I might add.

Investor buyers like to put as little cash into a deal as possible, but in today’s world, don’t assume you’ll qualify for PMI or mortgage insurance - another over-night disappearance in the lending world. If you don’t have at least 20% down payment, mortgage insurance will be mandatory, but will be either prohibitively expensive or just impossible to get. So goodbye to deals where the buyer is low-balling the price and also has no real skin in the game. It just won’t fly anymore! Any offer where the Buyer will need PMI just will not be attractive to most savvy sellers whether they’ve settled on the price or not. Many sellers are coming around to a better understanding of price, but now the buyers need to learn what makes an offer palatable in the eyes of not only the seller, but the lenders too. I guess it’s all part of the process of getting the teeter-totter (and our market) back on even keel again.

Aloha, Mike
RE/MAX Pacific

On Island: 885-5557
Toll Free: 800-500-4895
My “Sell” Phone: 808-896-1943
MikeSells.com
WestHawaiiBlog.com
Mike@MikeSells.com

“Here today, gone to Maui” as they say. I’m referring to financing programs that seem to be hitting the wall with increasing regularity.

Heidi, my partner at RE/MAX Pacific was writing a back-up offer on one of our listings in Kamuela. Now that in itself is unusual. I mean in this market to have 2 parties interested in the same property at the same time -well almost the same time, says something about the quality (and great price) of this particular property. But back to the point, “Gone to Maui”. She called the lender to make sure the prospect was qualified for the loan program she wanted (95% financing) on Monday and learned,

“Yes, no problem, the buyer is very qualified, credit scores are terrific and this will work.”

The very next day however, the lender calls back to say effective immediately, there are no more loans available with only 5% down payment. That’s it, no explanation just “no more, gone, history” (though I think I can read the tea leaves here). First the no doc, stated income loans disappeared, then no more 100% financing -no matter how good someone’s FICOs are, and it’s pretty clear now the way things are headed. Lenders are retrenching, hedging their bets so to speak, and basically playing catch-up with a lot of bad decisions made earlier in the game. The unfortunate thing is more and more solid borrowers will be jepordized. But the pedulum always seems to swing to far in correction, and we’re certainly in need of some correction in the mortgage world.

My advise, is act swiftly if you’re on the prowl for financing of any kind. Watch the rates because I think they are headed down, but have your ducks in line and ready to move on it before it’s poof, gone to Maui!

That’s my Tip of the Day and I’m sticking to it!

Aloha, Mike
RE/MAX Pacific

On Island: 885-5557
Toll Free: 800-500-4895
My “Sell” Phone: 808-896-1943
MikeSells.com
WestHawaiiBlog.com
Mike@MikeSells.com

FACTOID, I love that word! It sounds sort of like an alien being from outer space, but the root of the word, fact gives it some presence or clout if you will. Okay, here I go again off track, like my favorite 5th grade teacher. She was supposed to teach us geography, but you could interest her in most anything if you were crafty enough, and then you could go sometimes a good 45 minutes off on a tangent until the bell rang!

But I just read an amazing article, by Steven Marshall of Strategic Equity LLC sent over from Laura Merrifield, Business Development Director at Old Republic Title full of these great little tidbits. The title of the article by the way, is

“HOW THE AFFLUENT MANAGE HOME EQUITY”

Now I know a lot of you think there’s no such thing as EQUITY any more, but it caught my attention because it’s times like these where there’s opportunity. Note these interesting factoids:

1. According to the Federal National Mortgage Association (Auntie Fannie Mae), the average American mortgage lasts 4.2 years.
2. You pay a premium for a 30-year fixed rate mortgage yet most don’t keep a mortgage even 5 years.
3. Making a huge down payment and or extra principal payments may not be the best thing to do when you could DIVERSIFY THAT HOME EQUITY INTO OTHER INVESTMENTS!
4. Every dollar you give the bank to pay down your mortgage is a dollar you did not invest-and, here’s the killer, you earn NO interst on it, and if you need it back you’ll pay high fees to get it, and you have to convince the bank you can qualify for it -YOUR OWN EQUITY!
5. With the market gone to hell in many areas all over the country when foreclosed on, the guy who took every dime of equity out and invested it elsewhere, loses a lot less than the guy who went in with a huge down payment and kept making principal payments with the hope of owning it free and clear some day.
6. If a bank holds 100 delinquent loans, which ones are they going to foreclose on first? Those with the most equity because the last thing they want to do is take back a house they will lose money reselling.
7. Bottom line is this: Home equity has NO rate of return. It sits idle.

So, if you are not one of the masses upside down and trying to sell before you get foreclosed on, watch interest rates which are likely to come down and consider separating the equity from your house. Put it into an investment that will pay interest or some other return -AND take advantage of the mortgage interest deduction while you’re at it.

Home equity is SERIOUS MONEY. Don’t gamble it. You want to CONSERVE it, not to CONSUME it. It should not be invested aggressively! You want to look at safe, conservative investment vehicles that will grow and compound over time.

That’s my Tip of the Day and I’m sticking to it!

Aloha, Mike
RE/MAX Pacific

On Island: 885-5557
Toll Free: 800-500-4895
My “Sell” Phone: 808-896-1943
MikeSells.com
WestHawaiiBlog.com
Mike@MikeSells.com

I just got off the phone with Deborah des Jardine of FOUR STAR MORTGAGE, a very seasoned lender who I’ve known for a long time. She’s weathered the ups and downs of many markets and she agrees with me.

Yeah, but too many of the agents only encourage them by taking over-priced listings. Well, Deborah has a cure for that too.

Now you do understand Realtors and appraisers all use the SAME data, from the same sources, Hawaii Information Services, the County Tax Office, numerous transactions or appraisals under our belt, and a compilation of conversations with a myriad of other professionals in the business, but somehow when you pay for the information and it comes from “neutral” source it has more impact. And I’ll bet you 99% of the time an honest Realtor (not the one flattering you to get the listing!), and the appraiser come up with the same figure as to value -or darn close. So if you don’t believe me, SPEND THE DOE-RAY-ME, AND GET IT STRAIGHT. I can bet my eye teeth that will be the best money you’ve ever spent and if you heed the advise on price, you’ll sell your house sooner and for money money than if you play it your way.

And the appraisers have no reason to pad the value. In fact according to Deborah, they’re under all new guidelines and regulations which took affect this year. For example, an appraisal that used to be good for 180 days is now no longer valid after 120 days because values are still going down. Every appraisal for a purchase or refi now requires an appraisal review (just to make sure the lender is protected). And there’s a few new little boxes on the appraisal forms that an appraiser is required to check if applicable, and if checked could be the Death Nell for the borrower and your transaction. Those boxes must be checked if the property has been on the market over 6 months and if the market is declining. WHOOPS, THERE GOES THE “WE’RE NOT IN A HURRY” LINE IN THE SELLER’S SCRIPT.

Everyone I meet wherever I go, asks me the same question: “How long do you think before the market improves?” And the answer is the same as Deborah’s comment - “WHEN THE SELLERS GET A CLUE!”.

Aloha, Mike
RE/MAX Pacific

On Island: 885-5557
Toll Free: 800-500-4895
My “Sell” Phone: 808-896-1943
MikeSells.com
WestHawaiiBlog.com
Mike@MikeSells.com